People from across the United States rely on transportation services to deliver the goods they need for everyday life. Like all types of businesses, however, companies that provide transportation services often struggle with cash flow. Despite careful budgeting and outlining clear expectations for invoice payment to customers, situations arise outside of a business owner’s control that demand prompt access to funding.
Typical Expenses of Companies Providing Transportation Services
It is impossible to grow your trucking business when cash flow problems prevent you from meeting common expenses. Here are just some of the expenses you may have that you could pay with one or more financing options for the trucking industry:
- Purchase dump trucks, semi-trucks, or tow trucks
- Purchase tractor trailers
- Real estate transactions
- Storage space for fleet when not in use
- Upgrades and repairs to vehicles
- State and federal business taxes
- Accounts payable invoices
- Expand your trucking business to purchase another company
- Hire new employees
While these expenses can seem overwhelming, the good news is that you have several forms of financing available to you.
Financing Options for Trucking Companies
Here are just some of the types of financing you may wish to consider applying for on behalf of your transportation services company:
- Bank loan: Many business owners start here but find themselves frustrated by the low acceptance rate and extensive documentation requirements.
- Business line of credit: This is a good option when you need flexibility. You can borrow up to the credit line multiple times and have more credit available to you when you make payments.
- SBA-backed business loan: The Small Business Administration (SBA) works with lenders to encourage them to approve more loans for small business owners. They do this by offering guaranteed repayment of up to 85 percent of the loan.
- Invoice factoring: While you’re waiting on customers to pay outstanding invoices, consider selling some of your accounts receivable to a factoring company. Your customer then repays the factoring company while you receive a lump sum of cash within a few days.
To learn more about these and other financing options for the trucking industry, please contact POM Capital & Funding Services today.