Money In, Money Out: How To Keep Your Money Fluid With Transportation Factoring And Funding
Keeping a trucking business afloat until you have lots of customers hiring you for shipping services takes some skill. If you can keep your business alive for the first five years, you have a better chance of keeping it going for as long as you want. During this period, you need money to stay as fluid as possible so that you can keep your trucks fueled and running, your drivers paid, and your offices and warehouse functioning. Here is how you can do that with funding and transportation factoring trucking services frequently use.
Receivables Funding
Receivables funding is business capital that equals the expected or average amount of money your company should make every month. It is matched, dollar for dollar, so that you can keep the business going. As your customers pay in, the money goes out to repay the funding source. As long as the funding company is willing to help and you are able to pay, you can continue this cycle. Once your business picks up and you have a sizable profit every month (above and beyond what you give back to the receivables funding source), you can wean yourself off of this fluid source of business operations capital.
Transportation Factoring
To get the receivables funding cash, you have to keep excellent record books. When accounting is not your strong suit, this can be a major roadblock to the cash you need. Companies that provide transportation factoring services can help you get your books in order and keep them in order. That, in turn, will help you access the fluid business capital offered by the receivables funding companies. Sometimes the receivables funding companies also provide transportation factoring services, making it twice the help for avoiding bankruptcy and foreclosure.
Weaning off of the Fluid Money from Receivables Funding
It should be stressed that receivables funding is a temporary source of liquid cash for business operations. You do not want it to become a revolving charge account or personal funding source for things not related to the business. To make sure that the money you have flowing in and out does not become a crutch, the businesses that provide these cash flows will remind you to begin weaning off of their money as soon as you see good profit margins, a reporting factor taken from the factoring side of this business. If you are concerned about personal restraint, hire a company like Factor Loads that offers both of the previously mentioned services so that you are kept in check by the third party.
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