You’re free to come and go as you please, and there’s no hefty stack of legal paperwork to navigate. These contracts limit your freedom to run your business, and the details may be buried in fine print and pages of legalese.īobtail removes the issue by doing away with contracts altogether. While you’re under contract, you may not be able to factor with another provider, take payments directly from shippers, or even choose your clients without approval from the factoring company. Many factoring companies lock truckers into contracts, sometimes for as long as three years at a time. Here are the six major factoring risks to consider-and all the ways we help you manage that risk at Bobtail. 6 Invoice Factoring Risks To Watch Out For While you don’t have to worry about these invoice factoring risks with Bobtail, you should be aware of them as you compare providers. Of course, some companies make factoring tricky. That makes invoice factoring the best way to get funding for your trucking company, especially if you plan to take out loans to grow your business. Factoring companies aren’t lending you money they’re buying your invoices for the full amount (minus the factoring fee). If you have a lot of outstanding loans, banks won’t provide the funding you need for the new rig.īut factoring is not a loan, so it won’t impact your credit limits. Say it’s time to add a truck to the fleet. Factored funds stay off your balance sheet, so the cash you receive from factoring won’t show up on any credit reports or loan documentation. But there’s another reason invoice factoring is a great way to keep bank accounts flush. We’ve already described how factoring helps to ensure quick, reliable cash flow for trucking companies. But before we get to our main topic, let’s address a more fundamental question: Is invoice factoring a good idea for your business? Why use invoice factoring in the first place? We’ll cover the major invoice factoring risks and how to manage them below. Like any financial tool, however, things can go sideways with certain factoring deals. Questions about no-contract factoring with Bobtail? Call us at 41 to learn more. You’ll pay a low factoring fee between 1.99% and 2.99%, depending on the size of your business-and that’s all. Later, we’ll collect payment from the company that hired you. after that, the cash arrives the next day). When you factor an invoice with Bobtail, we put the money in your account the same day (for invoices submitted before 11 a.m. Invoice factoring fills this cash flow gap. That can be a challenge with brokers and shippers, who typically have between 30 and 60 days to pay. In short, you need dependable cash flow just to keep your fleet on the road. Repairs pop up unexpectedly and must be paid immediately, with highly variable price tags. Then, you have monthly payments for trucks and insurance, which can eat up another quarter of your income. Together, these can equal up to half your revenue. Every week, you have payroll and fuel costs. Trucking companies have a lot of immediate expenses.
0 kommentar(er)
