If you’re like most companies in the transportation industry, you’re always on the lookout for ways to grow and move forward, including your financing options. In today’s continued tough economic environment, your financing options may be limited.
10-4 Financing LLC partnered up with the Leader in Truck Factoring and is now a great solution to free up cash flow, quickly. Trucking companies have been using factoring for decades to get access to the working capital they need without waiting for slow-paying customers. In fact, it’s a funding mechanism that dates back to Europe in the 1400s and traveled to America with the Pilgrims around 1620. Of course, it has evolved over the centuries!
Factoring is not a loan, and it’s simple and easy to use. Here’s how it works in a nutshell: you sell us your invoices and we advance you 85-97% or more of their value, often within 24 hours once the initial account setup is done. We then work with your customers to collect on the invoice and when they pay us, we send you the balance, minus our fee.
Since factoring is not a loan, the process predominately focuses on the financial strength and creditworthiness of your customer, the ultimate debtor. Our fee structure is determined on a case by case basis, with the strength of the debtor’s ability to pay and the overall business volume having the largest impact. And at 10-4 Financing LLC, we do not require long term contracts, we don’t charge set up fees and we don’t have minimum monthly requirements. Easy, right?
Benefits of factoring
Factoring frees up your cash flow, and in trucking, cash is king. You need a steady source of working capital to purchase fuel, insurance, and equipment, plus meet payroll and those surprise repair bills. Factoring enables you to take advantage of business opportunities without waiting for a bank loan decision. Having a factoring partner like us can make the difference between being able to accept that next job or not, or being able to pay for permits, tags, licenses and more.
An additional benefit to factoring includes our back-office support such as invoice and payment processing and collection efforts, thus freeing you up to do what you do best and potentially eliminating your need to hire additional office staff.
Who uses factoring? Any company that engages in B2B commerce, issues invoices and extends payment terms to customers is a candidate. But it’s an especially good solution for startup and early stage businesses, rapidly growing or undercapitalized companies, those that do not qualify for traditional bank loans or those with seasonal sales. Further, factoring can enhance your balance sheet by improving your debt-to-equity and debt-to-asset ratios.