Working capital plays a large part in the success of any trucking company. Having capital on hand to cover expenses, meet payroll, get new equipment, and make plans for growth keeps fleets moving forward without internal disruptions. While loans used to be the “go-to” for working capital, trucking companies prefer a faster option that doesn’t place debt on the balance sheet.
Traditional Loans Can Limit Success
Single-use working capital loans can limit the success of trucking companies. Loans impacting business credit ratings require collateral and put debt on the books. The monthly payment schedule for loans can strain finances, especially when trucking companies are experiencing uneven revenue cycles due to outstanding receivables. Most trucking companies that rely on working capital loans end up placing plans on hold or scaling back growth because the payments cause downward pressure on cash flow. Additionally, once the funding from a working capital loan is spent, it is not replenished, so trucking companies need to take out additional loans if they need to get ahead.
Working Capital Without Debt
To build up working capital reserves quickly, trucking companies use invoice factoring. Invoice factoring provides a fast turnaround on receivables so business owners can access working capital within 24 hours. Not only does factoring improve cash flow, but it also allows trucking companies to build up capital reserves. This will enable them to meet payroll, cover other expenses, upgrade or acquire new equipment, hire drivers, expand into new markets, and more. In addition, since invoice factoring doesn’t place debt on the books, trucking companies can preserve their credit ratings and reduce the need for traditional loans.
Learn More about Freight Invoice Factoring
Whether you are trying to position your trucking company for growth or you need to boost your cash flow, contact the team at Single Point Capital. We offer same-day invoice factoring for trucking companies so they can thrive and grow in a competitive marketplace. We will work with you to create an invoice factoring solution tailored to meet our needs so you can experience long-term success.