Your transportation business needs to have steady cash flow to grow and succeed. One great way to increase your company’s funding is to obtain invoice factoring. Essentially, factoring services involve selling your company’s accounts receivables for instant cash. If you are still unsure about factoring, here are a few facts that can help you make your decision.
Not a Loan
Factoring is not the same as taking out a loan. It is merely a way for your business to get money as soon as you make your delivery. Your invoices are converted into cash, which you can use on the very same day. No traditional lender can do that.
The costs of factoring are less than the price of an ordinary credit card transaction. A small fee is taken out for every transaction with factoring, giving you almost all of your money immediately. This is similar to listing a house for sale and receiving 98 percent of your asking price in cash the day you list it.
As mentioned before, you can get your own cash on the day that you need it. There is no need to wait weeks for customers to pay their invoices anymore. Instead, you can start a factoring transaction and get your money the very same day.
No Credit Impact
Unlike a loan, factoring will not affect your credit score. For small businesses, borrowing money is difficult. If you do borrow money or have any balances on your credit cards, it can negatively impact your credit score. There is no risk of factoring lowering your rating. In fact, trucking factoring companies in Columbus, GA, do not even consider your credit score when providing you with funding. They are more concerned about the payment history of your clients than your own.
No Long-Term Commitment
Freight factoring companies do not require your business to sign a contract or make a long-term commitment. There is no site visit, no loan committee to woo, and no long due-diligence process; all things you may experience with a loan. You can choose to use factoring once or use it time and time again, whatever works best for your business.
Increased Cash Flow
Trucking companies need steady cash flow to continue to grow and thrive. You can obtain an injection of cash for your business by using factoring. No longer do you need to wait weeks or months for customers to pay their invoices. Instead, you can acquire a quick cash advance of up to 97 percent of your invoice on the very same day.