There’s more uncertainty in the US economy than some would have you believe, and for the freight and trucking industry, any decline in economic growth could be disastrous. With uncertainty over NAFTA, freight and trucking could suffer a great deal in the years ahead. The US trades $577 billion with Canada and $532 billion with Mexico in imports and exports – the lifeblood of freight and trucking.
The US economy may not be as strong as some analysts predict. Despite modest job growth, consumer spending  remains anemic. Some have called 2017 the “retail apocalypse.” In the month of August, consumer spending was only up 0.1%. With the US dollar down 8 percent in 2017, consumers are about to feel the pinch and that could jeopardize future growth. New US tax changes have also failed to inspire much growth and the future of NAFTA  is up in the air. As NAFTA renegotiations hit the rocks, fleet owners need a growth plan that can handle an unpredictable future.
Any company that finds itself a link in any part of a supply chain can find itself tight on money when they’re waiting to collect invoices worth thousands of dollars. Sometimes trucking companies wait up to 90 days to collect, but even waiting a month can put the brakes on your cash flow.
Freight bill factoring is a growing alternative to banks for fleets struggling with cash flow. If you want to learn about the benefits of invoice factoring for truckers  consider first and foremost that freight bill factoring is not a loan — trucking companies sell their invoices at a discount and factoring companies pay up front. Selling invoices is a quick and easy way to guarantee an influx of working capital. Instead of waiting two or three months to collect, factoring offers carriers immediate funding often on the same day they submit invoices.
By contrast, bank loans are difficult to secure. Banks have tough expectations  for credit and sustainability for companies that take on bank debt, and trucking is usually considered a high-risk industry. Trucking companies can easily find themselves frozen out of bank loans, especially if they don’t have an impeccable credit history or major collateral. Trucking companies of all sizes struggle to meet banks’ requirements for a business loan.
Freight bill factoring rates, on the other hand, are very affordable and designed to meet industry needs. This is what the freight bill factoring process looks like:
- Once the trucking company completes a delivery, it sends an invoice to the client and a copy to the factoring company, plus proof of delivery
- Factors such as Accutrac Capital send the trucking company a cash advance that’s as high as 97% of the invoice within 24 hours (minus a nominal factoring fee)
- When the customer pays its invoice, Accutrac Capital reimburses the balance of the cash advance (i.e., 3%)
Any trucking company struggling with cash flow can take advantage of a third-party factor. Factoring means you don’t have to wait 90 days for payment so that you have the liquidity you need to meet your expenses and grow your company. Stabilize your cash flow with a third-party factoring partner.