Transportation Funding Available Through Invoice Factoring
Industry: HVAC Manufacturing Company
Factoring Line: $5000 per month
Location: Riverside-San Bernardino area of California’s Inland Empire
The trucking and transportation industry is no stranger to factoring accounts receivables. This is because, in part, the industry has so many different parties and moving parts involved in one haul as well as slim margins for most truckers. Those in transportation know they often have to pay suppliers right away but must often wait several weeks to receive payment owed to them. This practice routinely leaves cash flow gaps that just can’t be made up with the passing of regular business cycles. Instead cash must be infused into the process to cover these gaps or the trucking company risks driving into the red.
Freight Factoring Is a Great Fit for Startups
Such a situation recently happened to a trucking client in the Riverside-San Bernardino area of California’s Inland Empire. The business owner, who had only recently launched his trucking business after driving trucks for someone else for five years, was having cash troubles. Needing regular cash infusions to keep his business going strong, he knew he had to partner with a freight factoring company like Business Factors. Due to his years in the business, he was familiar with freight bill factoring since a lot of trucking companies were already getting help with factoring receivables.
Non-Recourse Factoring Can Help Those in Trucking
When talking with representatives at various transportation factoring companies, he expressed his biggest concern was, what would happen if a customer or broker failed to pay on an invoice? He had seen this happen with his own eyes, and as a startup, didn’t want to run the risk of having to pay this money back to the freight factoring companies. When the Business Factors told him they offered non-recourse factoring, a type of invoice factoring where the freight factoring company bought the invoice outright with no risk to the client, he was convinced and signed up.
The client had been working happily with Business Factors as its transportation factoring company. During his third month, the client faced the situation he had originally feared: a broker absconded and failed to pay on an invoice. Sticking to its contract, the freight factoring company covered the $5000 loss and did not ask the client to pay this money back. The client remains partners with Business Factors to this day and is glad he selected this invoice factoring company to do business with.