Most Australian trucking companies are started by drivers who invest their own money to buy a truck and launch and operate the company.
While many drivers have a great deal of industry experience, they don’t necessarily have a lot of capital to support the business in the early days.
Often, this stops them from reaching their full potential and makes them susceptible to cash flow problems.
Slow payments and cash flow
Most freight carriers prefer to work with shippers and commercial clients that offer quick payment.
Receiving payment soon after delivering a load allows the carrier to recover its costs and pay expenses.
The problem is that many customers don’t offer quick pays and, instead, demand payment terms.
This requirement puts your trucking company in a precarious position because you must wait 30 to 60 days to get your invoice paid.
Not many growing companies can afford to wait that long for a payment since they have a number of expenses to pay.
At best, you risk cash flow problems.
At worst, you could run out of funds and be unable to pay for drivers, repairs, or fuel. And this is before you as the business owner draw any income.
The solution – finance freight bills
One way to improve your cash flow and to gain a more solid financial position is to use invoice financing – a business financing solution that has been gaining traction in the transport industry.
Financing your freight bills:
- Addresses the problem of slow-paying shippers by advancing funds for your invoices
- Gives your trucking company the money it needs to pay critical expenses and to grow
Invoice funding will allow you to access 80% of the invoice value once as soon as once the load is delivered and verified by the debtor.
The remaining 20%, less the fee, is rebated once the client pays in full.
Advantages of freight invoice financing
A key advantage of invoice finance is that it can be used on a revolving basis, providing a source of constant cash flow for your business.
This advantage provides an immediate improvement to your working capital, allowing you to operate your business without worrying about slow payments.
Also, the financing line can grow with your company.
Also, unlike most bank financing programs, freight financing does not have difficult collateral requirements such as putting your family home on the line.
Lastly, there is no requirement to be locked in to a contract requiring you to fund every invoice, every month to every debtor.
Compared to traditional finance options, qualifying for invoice finance is easy.
The most important requirement to qualify for The Invoice Market is to have reliable customers because The Invoice Market uses their creditworthiness as collateral.
Your trucking company should meet the following criteria:
- It must have its documentation up to date
- It must invoice only for delivered loads
- Its invoices/freight bills must be free of liens
- It must not have corporate legal or tax problems
Get a quote
The Invoice Market is a leading cash flow finance company and can provide you with high advances and low rates. Fill out our seller registration form for an instant quote.