Business Financing Options For Trucking Companies and Transportation Brokers

Trying to get business financing for a transportation company in the current economic environment has been nearly impossible. This applies to both trucking companies and freight brokers. Most institutions are imposing a number of restrictions on their financing activities to the point where getting a business loan is very difficult. It's not that institutions don't want to make business loans - but rather - they have to be extra careful. For example, many institutions now require company financial statements for multiple years that must show profits. They need substantial assets as collateral, and usually require the business owner to have substantial assets themselves.
But, what happens if you can't meet this criteria? Are you basically out of luck? Not really. You just need to look elsewhere.
Let's look at a common problem in the transportation industry - cash flow. This affects brokers and carriers alike. They have expenses that they must cover immediately, such as drivers and repairs. However, they must also wait up to 60 days to get paid by their clients. If they don't have a cushion of capital to bridge the gap - their businesses fail. There is an alternative though - it's called factoring.
Factoring your freight bills bridges this gap in a simple and elegant way. It provides you with an advance on your freight bills, which you can use to cover your expenses. The transaction is then settled when your client pays the freight bill.
Freight factoring has a number of advantages and is easy to qualify for. Most factoring companies look at the credit of your client as the most important requirement (though not the only one) to provide financing. Although your client's credit is important, your company should be free of liens, judgments and tax problems.
Freight bill factoring is an ideal source of financing for startup and growing transportation companies, it provides financing to cover operational expenses while you focus on growing your business. One if the biggest advantages of freight factoring is that is tied to your sales - your financing line grows as your business grows.