Invoice Factoring: Keeping Trucking Companies Alive During COVID-19
Due to the COVID-19 pandemic, the economy has been in a volatile and unpredictable state. Businesses within different sectors have undergone severe losses as consumers have largely been staying indoors. With the recent resurgence of COVID-19 cases in the US and impending shutdowns, economic recovery remains highly uncertain for the foreseeable future.
One industry that has undergone a considerable economic shift during this time is the trucking industry. Truckers handle a variety of cargo, but demand for some products have temporarily nosedived whereas others have witnessed a surge of orders. For example, businesses within the apparel industry have closed or experienced severe economic losses, no longer requiring the same rate of orders from trucking companies. Yet, other sectors that require transportation of essential goods such as groceries or toilet paper have not slowed down in their need for goods to be processed and delivered. Therefore, trucking companies have been experiencing fluctuations in demand depending on the sector they service and some companies are having trouble adjusting to the new rate of operations.
The COVID-19 pandemic has had a detrimental impact on payments for services such as trucking. Trucking companies and trucking owner-operators rely on shippers to pay their invoices. Without these invoice payments, trucking companies will be unable to maintain sufficient working capital. Normally, invoice payment terms are between 30-90 days, which can be constraining for the trucking company’s operations. Unfortunately, given the current economic climate, many customers of trucking companies are at risk of being shut down or are forced to delay payments. The current crisis has made it nearly impossible for trucking companies to expect or receive timely payments.
How Invoice Factoring Helps Trucking Companies
Through invoice factoring, factoring companies take on the responsibility for collecting outstanding invoices and provide trucking companies with immediate cash flow. Thus, trucking companies will no longer be encumbered by long waits on payments and by the stress associated with invoice collection. Given the current economic downturn, this type of immediate payment is a lifesaver for trucking companies. Now, trucking company owners can spend more time focusing on growing their business without having incurred any additional debt.
Invoice factoring is a very accessible source of funding, even if the trucking company owner has bad or no credit. Factoring companies are more concerned with the credit history of the trucking company’s customers. Even with poor or limited credit history, trucking company owners can still receive funding from invoice factoring.
In a time when companies find themselves with limited funding options to maintain their daily operations, invoice factoring is one of the best alternative funding options for trucking companies to remain economically viable. Accel Business Funding has extensive experience working with trucking companies and can provide invoice factoring services that will help keep your business running.