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How To Convert Your Freight Bills Into Instant Cash

By: Kris Koonar

If you own a trucking business with lot of credit clients, then you would have realized that your precious money could be locked away for 30 to 60 days every time you draw up a credit invoice. You might be wishing for instant cash against your credit invoices, in order to meet your ever-rising expenses. Well, freight factoring is the best way to convert your freight bills into instant cash.

When you issue a credit invoice to your client, then according to your business terms, you might need to provide a credit period of 30 to 60 days or sometimes even 90 days to that client. But on the other hand, you would still need to pay your fuel bills, salaries to your drivers and other employees, service and repairs to your trucks on a daily or weekly basis and that too, in cash. This could result in a perpetual cash flow problem. This is where a good freight factoring company could step in to help. The company could purchase your credit invoice and provide you with instant cash within a day or two after deducting their 'factoring fees'.

This means that you could get instant cash, even though your client would pay the invoice amount only on the due date. The factoring fee that the factoring company might deduct could be in the range of 1.5% to 5% of the invoice amount. This fee would depend on a number of various factors, such as the credibility of your clients in the factoring company's eyes, the credit period provided by you to your clients and the total amount of invoices that you can factor with the factoring company. If your profit margin can accept these factoring fees, then the instant cash that is provided by the factoring company can be used to take care of all your expenses. You could even be brave enough to try for bigger hauls that would have been previously unthinkable.

Even though a bank loan could also provide you with instant cash, you would firstly not be eligible for a loan without sufficient collateral or without providing satisfactory financial documents for the previous 3 years of your business. While collateral could be difficult to arrange for, you would also need to provide financial documents, which would be impossible, if you had just started your trucking venture.

Bank loans also need to be repaid within the stipulated period, irrespective of whether your business flourishes or flounders. Whereas, since freight factoring only depends on the amount of invoices that you provide to your freight factoring company, you can easily remain in control of this flexible financial tool. Thus, freight factoring is much more in tune with your specific business needs and provides you with regular and enjoyable cash injections that could continuously help your business to grow and prosper.

You could avail the services of an efficient freight factoring company, in order to convert your credit invoices into liquid cash. This method of finance will propel your business on the fast track within a short time. Another advantage is that you can cancel the arrangement, whenever you do not feel comfortable. Thus this arrangement can be used to tide over a temporary financial crisis or even for a longer period of time. You can also use this service for specific clients, if you so desire.

Freight factoring is therefore an excellent tool, in order to lay your hands on instant cash, so that there are no monetary constraints on your road to success.

Article Source: http://www.articlekingpro.com

Freight Bill Factoring Company the Phoenix Capital Group offers custom fitted Factoring Programs. Factoring is an important part of the Trucking industry in general as seen by this IRS Report. To learn more phone 623-298-3450 or visit: www.phoenixcapitalgroup.com/index.asp

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