Get Much-Needed Trucking Funding to Meet High Operational Costs of Your Business

The trucking industry in America plays a massive role in driving the country’s economy. Over 70% of all kinds of freight movement across the United States take place through trucking and account for over $700 billion in revenue. The other notable thing is that over 91% of all the trucking operations are handled by small businesses with an average fleet strength of 6 trucks. Like all other small businesses, the truck operators also face impossible barriers in getting access to trucking funding from traditional lenders like banks and other financial institutions. That makes it quite challenging for the trucking businesses to meet high operational costs. If you have a small trucking business, don’t worry; there are alternative funding options for you.  

Trucking is a capital-intensive business 

Operating costs are very high in the trucking business and unless you keep a close eye on it, you could lose control of your expenses. When that happens, it is generally the beginning of the end of the business unless you find a quick remedy. One way is to find a reliable source of working capital funding. 

The vast majority of truck operators run fleets of 6 or less trucks that approximately haul a total of 200 tons of cargo if they average 30-35 tons. If there is a breakdown or two somewhere, that will jeopardize 60-70 tons of cargo haulage. If you don’t sort out such issues fast, it will impact your revenues. Alternative business funding solutions can help you handle such issues easily. 

Payment timelines in trucking are 30-45 days 

The main problem that truckers face is the payment timeline of 30-45 days, which can stretch operational costs to a maximum. You may be able to handle that kind of stress once in a while but enduring it day in and out can seriously harm your business. You will need unique funding solutions to tide over such situations. 

Your clients could be a wide range of businesses from food grains to milk and beverages and from garments, linen and drapery to home furnishings and an endless range of goods. They also have timelines to meet and if they miss it due to shipping issues, they will seek compensation that could result in delayed and reduced payments. You will therefore need easy funding from alternative sources to tide over such issues in the next shipment.  

Invoice factoring credit can meet trucking operational costs

Considering the delayed timeline of payments, one of the best ways to meet shortfalls in operational cost is quick funding by way of invoice factoring. In this kind of funding, the borrower leverages his/her pending invoices to access a line of credit at an agreed cost. 

As already explained, operating costs are very high with maintenance, tires, fuel and insurance among others. At the end of a shipment, you are left with no resources to fund your next shipment. That’s when you can utilize invoice factoring to access funds for your working capital. This mode of financing is very popular with small trucking businesses and others with delayed payment timelines.  

Ulani Uriah

Umar Nisar was born and raised in the busy city of Abbottabad. As a journalist, Umar Nisar has contributed to many online publications including PAK Today and the Huffing Post. In regards to academics, Umar Nisar earned a degree in business from the Abbottabad UST, Havelian. Umar Nisar follows the money and covers all aspects of emerging tech here at The Hear Up.

Thanks