Why to Use Trucking Factoring?

by Kevin Smith Author

When starting your own trucking business, there are so many things to think about. How many trucks will you need? What will you ship? How will you keep it all straight? When will we make money?

While the goal of a business is always to make money, sometimes collecting the funds owed can end up being the last thing on your mind as you go through the day to day of running the business. If you don't have someone who can work on collecting your receivables full time, money in your pocket could be left outstanding for days, weeks or months and that has a serious effect on your bottom line. With the help of trucking factoring companies is Alpharetta, you can take some of the guess work out of the process of collecting payment and get money in your pocket faster.

What Is Trucking Factoring?

Many people just starting out in the trucking business many not even be aware of what trucking receivables factoring is or how it helps you get your money faster. The process of receivables is simple and involves your selling your receivables to a third-party company. The company gives you cash payment for the receivables much quicker than you could otherwise collect on them. Once you sell the third party the receivables, the company collects on them itself as they now own them, which eliminates a step in the process for you. So you simplify the collection process and end up with cash in your hand in a much more timely fashion.

What Trucking Factoring Isn't

One of the big questions that surrounds trucking factoring is that people can often think it is a loan, that the company is paying you in the interim until they collect on the receivables. This couldn't be further from the truth. Trucking factoring isn't a loan, it's the sale of your receivables. What that means for you is that it doesn't affect your balance sheet so it's easy to manage. Another big advantage of it not being a loan is that it doesn't affect your credit rating. This means that if you wanted to apply for an actual loan, you could do so without having an added factor in the credit decision.

Trucking factoring companies in Alpharetta are a great way to increase your cash on hand which, in turn, helps your business thrive. Whether you need to make a repair on your fleet, hire more full-time help for the holiday season or get cash quickly for a previously unidentified issue keeping you trucks off the road, trucking factoring can help get you there.