Carrier Fleets Use Factoring to Meet Increased Demands

Carrier fleets are in a very interesting position right now. Shippers and customers rely on carrier fleets to get materials and goods to their destinations. Simultaneously, carriers are positioning themselves for growth to recruit more drivers and put more capacity trucks on the highways to meet the demands of the current economic climate. However, carrier fleets need ample capital to jump on growth opportunities while still covering payroll and other regular expenses.

The Cash Flow Bottleneck

Hauling shipments all over the country generates a large number of receivables. The standard procedure is to issue invoices with staggered payment schedules of 30,60, and even 90 days. The delays in payments can place a severe strain on cash flow, which can force carrier fleets to put growth projects on hold, and sometimes leave them struggling to cover overhead costs. This cash flow bottleneck can have bigger repercussions outside of just the trucking industry, causing supply chains to slow down due to staggered revenue.

Factoring for Carrier Fleets

To speed up and strengthen cash flow, carrier fleets use factoring services. Factoring turns receivables into cash with 24 hours, which gives carriers faster access to capital than waiting 30 days or longer. By using accounts receivable factoring, carriers can quickly build up the cash reserves needed to cover payroll and other costs. Additionally, carrier fleets can move forward with their recruiting efforts so they can put more drivers and capacity trucks on the road to meet the demands of clients. Because invoice factoring is debt-free, trucking companies can preserve their credit ratings and reduce the need for loans. Besides, with the rising interest rates on bank loans, financing receivables through factoring presents less risk to the transportation industry.

Boost Your Cash Flow and Keep Operations Rolling

New Century Financial offers accounts receivable factoring to carriers of all sizes. Our team will work with you directly to create a factoring strategy to meet your needs and help you achieve your goals. Whether you need to unlock revenue tied up in receivables to cover overhead expenses or you are positioning your business for growth, contact the experts at New Century Financial today.