During the first days of the lockdown in many parts of the country, the truck drivers in the nation had a challenging task. They were needed to deliver essential goods to every part of the country. And if the decreased amount of traffic on the nation’s highways and interstates were an advantage, it was important to note that there were also additional challenges. For instance, after a long day of driving and before an evening of getting rest, there are many truck drivers who rely on fast food restaurant chains and other traditional sit down restaurants to get the food they need. Unfortunately, when in person dining was eliminated there were many truck drivers who found themselves at a loss when the only options available was a drive through. Unable to take a big rig through these drive through, over the road drivers were faced with what would be only the first of many challenges of the pandemic.
Longer routes and greater demand, coupled with the fact that so many companies were being asked to shift their deliveries depending on product availability meant that drivers were often forced to work in challenging situations and environments. When you add in the fact that, like many businesses, all of the costs need to be covered up front while the delivery bills are often not paid for four to six weeks after the delivery of goods and you begin to see the need for special kinds of resources. Fortunately, freight bill factoring companies can help transportation businesses of all size fill the gap while eating for account receivable to start rolling in.
Transportation Factoring Companies Have Long Played an Important Role in the Economy of the Nation
Without the help of freight bill factoring and other kinds of important services, there are many smaller trucking companies that simply could not compete. On a more global scale, of course, international factoring associations offer their services to companies that often incur their expenses months before a final delivery and the eventual payment.
Freight bill factoring and invoice factoring are types of accounts receivable financing that converts outstanding invoices due within 90 days into immediate cash for a small business. And while small businesses may see the biggest benefit from these freight bill factoring services, there are also many times when larger companies can benefit from these services as well.
Comparing these professional factoring services to a small family budget is one way to understand the role that these resource funds can play. Even when you know that you will have enough money in your check at the end of the month to pay for all of the living expenses the you normally incur, it is often a balancing act to navigate the necessary timing of the payments. Now imagine the you are a business owner who is a part of the nearly 12 million trucks, rail cars, locomotives, and vessels move goods over the transportation network. Paying for salaries and fuel expenses alone requires a significant amount of capital. But when a truck breaks down or weather creates a delay, the amount of expenses can increase significantly. With the help of the top invoice factoring services, however, there is an opportunity to access the financial resources you need to meet your payment deadlines while you await for the eventual accounts receivable.
The latest research indicates that factoring companies can help small businesses bridge invoice payment gaps with upfront payments accounting for as much as 90% of the original invoice. In fact, consider this important quote. “The factor advances most of the invoice amount, usually 70% to 90%, after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction (or factoring) fee,” according to the Wall Street Journal.
As consumers we can be frustrated when the products that we most want are not available in the store, but not many of us realize the actual costs of this missing product on the overall economy. And with nearly 28 million small businesses in the U.S., it will be the role of factoring services that will be needed most.
