Philadelphia Truck Factoring: Powering Your Hauling Business’s Cash Flow
It’s like driving through a maze of financial obstacles to run a trucking company in Philadelphia. Cash flow can feel stuck, even though you’re constantly trying to keep things moving. Philadelphia truck factoring company is a great way to keep your business going forward.
Imagine this: you’ve just finished a long trip from Philly to Chicago. You’ve completed the job, but you have to wait 30, 60 or 90 days before receiving payment. Fuel costs, maintenance bills and driver salaries do not wait. Anyone would be tempted to pull out their hair.
Enter truck factoring. You can sell your invoices at a discounted rate to a factoring firm instead of waiting on clients to pay. You get immediate cash, no more waiting.
Let’s talk about turkey. Imagine that you are Joe the trucker, and you have $50,000 in outstanding invoices. A factoring firm buys the invoices, and advances you an amount – say 90% – so that $45,000 is in your pocket immediately. The factor will take a cut of the final payment (usually 2-5%), and then send you the balance.
What about my credit rating? You ask. I hear you ask. Factoring companies are more concerned with the creditworthiness of your clients than you. No worries if you have hit some financial bumps in the road. Your eligibility is still intact.
This might seem too good to true. There are costs, but nothing in life is free. Except maybe the advice of your mother-in law! Think about it. Would you rather pay for immediate cash, or risk missing out on opportunities because of a lack of funds?
Another nugget to remember: truck factoring isn’t just for large rigs or long hauls. It’s also ideal for smaller operations, and for local deliveries in Philly’s busy streets. This financial tool will help you smooth out cash flow bumps, whether you are hauling Liberty Bells and cheesesteaks.
Let’s now chew the fat about choosing the best factoring company. Some factoring companies offer higher rates, while others offer more flexible terms and additional services such as fuel advances or equipment financing.
Sam runs a small fleet in South Philly. He was drowning last winter in unpaid bills when his trucks required urgent repairs following a snowstorm. (Thanks Mother Nature!) The partnership with a factor that offered same-day financing plus repair loans, at competitive rates, was the key to success. Before he could even say “Rocky Balboa,” his trucks were back in action.
Do your own research! You can read reviews online, or talk to other truckers at coffee (or wherever you get your fuel). Many have seen their business turn around through savvy decisions made in factoring.
You have a lot of options! Factoring with recourse or without recourse? Spot or contract-based factoring? Like choosing the toppings for Pat’s King Steaks, each has its own pros and cons depending on your personal preference!
The road to success doesn’t need to be bumpy, if you have the right tools and partners on your side.
Next time you hear someone talking about truck factoring, you’ll understand why so many savvy operators swear it keeps engines running smoothly in the hustle and bustle of this thriving metropolis that we call “home sweet home” – Philadelphia.
All right then, buckle up and happy driving to you all!