Many trucking companies can still remember the 2008 economic crisis when banks pulled funding and left the trucking and transportation industry reeling to react to a sudden cash flow shortage. Though the economy continues its slow recovery, the stringent requirements for funding from banks still make it tough for many trucking and freight businesses to find the financing they need. Freight factoring from accounts receivable factoring companies is an ideal funding solution for trucking businesses in need of immediate cash.
Your financing options don't end when the bank says "no"
Typically, your trucking business's credit rating, financial history (or lack of), balance sheet and business assets will be key factors in whether a traditional lender, like a bank, will approve a business loan or line of credit.
When the bank says "no" you can still qualify for financing if you work with an invoice factoring company. Why would a factoring company approve financing when a bank won't? Factoring companies, like Accutrac Capital, are alternative financing companies who take a very different approach to determining your eligibility for funding.
Accutrac offers factoring (also known as accounts receivable factoring or freight factoring) and load advances which are two forms of alternative financing products designed specifically for the trucking, freight and transportation industry. Both of these alternative financing products from Accutrac have four main differences from obtaining financing through a bank.
Qualification is based on your customer's creditworthiness: One of the main differences between qualifying for freight factoring or load advances, and applying for bank financing is how the financial institution determines your creditworthiness. Banks will focus on your company's financial history and cash flow to determine if you qualify for financing. When qualifying for factoring and load advances, the decision is based on how creditworthy your customers are. That's especially helpful for a business that's already stretched its available credit, or to a newer trucking business that has yet to build its credit history.
No debt on your balance sheet: Unlike traditional financing, neither freight factoring nor a load advance is considered a loan. With factoring and load advances, there is no debt on your balance sheet.
Funding decisions are made quickly: Accutrac makes funding decisions quickly, where banks can take weeks or months to approve a loan.
No monthly payments: Most business financing requires regularly scheduled payments stretched over a specified period of time (for example: monthly). With factoring, and load advances you're advanced funds based on the value of the job. The factoring company then invoices your customer and waits for the customer to pay that invoice (usually between 30 and 90 days). You make no payments, because your customer pays the factoring company directly.