Loans You Should Consider for Your Trucking Company
You are growing your trucking company but need additional cash for an expansion or more drivers. It can be a challenge to finance the extra expense from your profits alone. Applying for lending from your bank or other institution can get you the money that you require and allow you to pay it back over some time. Here are a few options to consider that are available to the transportation industry.
Traditional Bank Financing
One option that you can think about when considering a loan is to work with your bank and apply for a traditional loan. You can stretch your payments over several years, making them manageable for your budget. However, there can be some hurdles to obtaining one. You must have a great credit rating to be considered. You also have to submit a financial statement along with your application. This document will state how long you have been in business, the cash flow you have coming in, what debt you are currently carrying, and your anticipated revenue within the transportation industry. The process can take weeks to complete and, if you forget any information when you send everything, it will be longer.
Using Your Freight Bill for Financing
At times, you need cash right away to handle an emergency happening in your business. Since a bank loan takes a great deal of time to complete, you must think of another solution. Factoring companies can be beneficial at this point. When you partner with one, you sell your freight invoices to them instead of billing your clients. The lending group, which works with the transportation industry, pays you for a portion of the amount on it with the agreement that they will send the rest minus their fee when the debt is settled. They then reach out to your customers with an invoice on your behalf. An advantage to this system is that you have your money immediately after the shipment.
Get a Loan for Your Equipment
Your fleet is considered the equipment in your business, along with the tools you must have to work on them. Some lenders specialize in providing financing for the items that you must have to keep operating. Once you give them an estimate of what you need, they will let you know what they can assist you with. This will require using the object as collateral. It allows you to keep up with the transportation industry by updating your trucks when they wear out.