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True Story Series: Oil & Gas/Transportation

Freight Bill Factoring Keeps Truckers Moving In Whitecourt, AB

Industry: Oil & Gas/Transportation
Factoring Line: $500,000
Location: Whitecourt, AB

Businesses going through rapid growth due to either seasonal cycles of growth or just general overall growth have a tendency to run into cash flow disparities. If you get a large number of business orders all at once, you probably cannot collect on those orders as fast as you get them. This leaves your business with a temporary shortage of cash, which means you’ll have a hard time paying your own bills on time.

Overcome Rapid Growth Issues with Transportation Factoring

In early winter of last year, a transportation and trucking company for the oil & gas sector, well-known for its peak-and-valley cycles, ran into this type of seasonal growth problem. It had received a record number of orders from an oil & gas client who needed several trucks to haul its heavy loads as soon as possible. Adding to the issue was the fact that it was the thick of winter in Whitecourt, Alberta. Sleek, icy roads paired with perilous driving conditions would likely slow the delivery time even among the most experienced drivers.

Running out of options, the trucking company decided to inquire with an invoice factoring company about getting a temporary “cash advance” of $500,000 so it could pay its bills on time and not risk damaging its credit and reputation. The option of calling clients and asking if they could collect their bills early crossed his mind; however, the business owner didn’t want to run the risk of damaging the relationship.

Freight Bill Factoring Solves Cash Flow Problems

So after talking with the professionals at the factoring company of Business Factors, he decided to proceed with factoring accounts receivables. He was able to fill out the invoice factoring application fairly quickly, including how much money he needed, which invoices he was going to factor, and other verifiable information.

The company owner was largely unfamiliar with accounts receivable factoring (though he knew that transportation factoring and freight bill factoring were fairly common in his industry). At the time the owner thought he’d give freight factoring a shot for this one-time cash flow shortfall but thought he wouldn’t need the factoring services afterwards.

Freight Factoring Isn’t Just for Urgent Situations

Once the factoring company verified and processed his application, the owner was able to get the cash he needed in a matter of days and the overall process was much smoother than he had anticipated. He used the money from the transportation funding to pay his bills, which were mostly made of vendors who maintained and repaired his fleet.

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About the Author:

Robert Bernfeld started in the commercial finance industry in 1974. His early years included positions with Aetna Business Credit and Foothill Group. During the next thirty five years. Mr. Bernfeld established both equipment leasing and accounts receivable factoring companies. He partnered in founding Business Facilitators, Inc. in 1999. Mr Bernfeld graduated from the University of California, Riverside in 1974 and received his Juris Doctorate from Loyola University School of Law in 1977.

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