Turn Your Freight Bills Into Cash in
Why Should You Choose Us.
of your unpredictable cash
flow cycle? Is the
uncomfortable ritual of
making incoming cash
receipts stretch to cover short-term
obligations leaving you drained at the
end of the day?
It's time to find a way to fill up the
empty cash flow tank. One way to
replenish and watch your gauges
change is to work with a factoring
With your cash flow gauge on full,
you can make payroll, keep your
trucks fueled, handle routine
maintenance and surprise repairs all
in the same cash flow tank.
In recent years, an increasing number
of businesses, especially trucking
companies, have discovered that
factoring accounts receivable can
combat the ups and downs of unpre-
dictable cash flow cycles. More
importantly, factoring companies are
providing the transportation industry
with a viable source of working
capital when conventional financing
is not an option.
Factoring is the purchase of
creditworthy accounts receivable in
exchange for immediate cash. Put
simply, you can sell a current freight
bill and Viola - instant cash flow.
Freight bills are great assets because
the driving is either already done or
the service has already been delivered,
and you are just waiting for the check
to come in the next 15-35 days.
Usually, businesses need the money
owed them well before their
customers pay - even if the customers
are paying in a timely manner.
Factoring companies can do the
waiting for you. Depending on the
agreement, businesses can pick and
choose which freight bills they wish
to sell to the factor, who advances 90
percent or more of the face value of
the invoice in the first 12-24 hours in
which it was generated. The balance
of the funds, less the discount fee, is
released once the invoice is collected
by the factor.
The cost of doing business with a
factoring company is the discount
taken on the freight bills submitted
for funding. Fees range from 1 to 3
percent, depending on volume,
creditworthiness of the customer
being invoiced and the overall risk.
' Although the fees sound steep,
factoring companies have found that
most of their clients increase their
revenues by much more than the cost
of the factoring services because they
have the cash they need for operating
costs and market growth.
Anticipated profits cannot be used to
pay for short-term obligations such as
taxes and general overhead costs.
Most factoring clients absorb the
costs into their pricing and take a tax
deduction for the business expense
incurred for the factor's services.
In addition to providing immediate
cash on freight bills, the factor
performs valuable credit analysis on
new and existing customers and
conducts professional, routine
follow-up on freight bills as they
become due. Business consultation
and monthly updates also help round
out the factoring package.
Factoring helps place the owner or
business manager, who spends a
good portion of the day collecting,
bookkeeping and searching for
capital, at peace. It also frees up
some of their time to devote to
other important aspects of business,
such as sales, dispatching and driving.
More trucking factoring information at USloadsource.com
The Motor Carrier Act of 1935 required new truckers to seek a "certificate of public convenience and necessity" from the ICC. Truckers already operating in 1935 could automatically get certificates, but only if they documented their prior service, and the ICC was quite restrictive in interpreting proof of service. New trucking companies, on the other hand, found it extremely difficult to get certificates.
The law required motor carriers to file all rates—also called tariffs—with the ICC thirty days before they became effective. Anyone, including a competitor, was allowed to inspect the filed tariffs. If the proposed tariffs were protested by another carrier (such as a trucker, a regulated water carrier, or a railroad), the ICC normally suspended the rates pending an investigation of their legality. In 1948 Congress authorized truckers to fix rates in concert with one another when it enacted, over President Truman's veto, the Reed-Bulwinkle Act, which exempted carriers from the antitrust laws.
From 1940 to 1980, new or expanded authority to transport goods was almost impossible to secure unless no one opposed an application. Even if the proposed service was not being offered by existing carriers, the ICC held that a certificated trucker who expressed a desire to carry the goods should be given the opportunity to do so; the new applicant was denied. The effect was to stifle competition from new carriers.
Purchasing the rights of an existing trucker became the only practical
approach to entering a particular market. By the seventies the authority to
carry certain goods on certain routes was selling for hundreds of thousands of
dollars. Because the commission disapproved of "trafficking" in rights, it was
hostile to mergers and purchases and attempted to restrict authority as much as
possible. The result was often bizarre. For example, a motor carrier with
authority to travel from Cleveland to Buffalo that purchased another carrier or
the carrier's rights to go from Buffalo to Pittsburgh was required to carry
goods destined for Pittsburgh through Buffalo, even though the direct route was
considerably shorter. In some cases carriers had to go hundreds of miles out of
their way, adding many hours or even days to the transport.