Hard to Believe...

Business is booming, but the company’s strapped for cash.

At one point or another every business is confronted with cash flow problems and it doesn’t just happen during difficult times! Businesses need cash for many reasons. A company may be experiencing sudden growth or there may be a need to expand a major transaction. All can create an immediate, sometimes urgent need for funding.

Current research shows that a good proportion of small and medium sized business fail because of difficulties in meeting short term financial obligations – not because business is bad. So it seems contradictory for a growing and profitable business to get into serious financial trouble, even go broke. But on closer examination, it’s not surprising.

“Even if one or two of your larger accounts fails to pay their invoices on time – even if they take an additional 30, 60 or even 90 days to pay – you’ve got a cash flow problem!" That straight forward explanation comes from Cristian Bodi, one of Capital Depot’s professionals.

Traditionally, business people have relied on corporate lines of credit that are derived from conventional lending sources. And at certain times, there’s even a need for short term bridge financing. But who of us hasn’t been in a position where business related expenses were paid with a personal credit card?

When the traditional means of funding seem to dry up, the process of acquiring extended financing can become a lengthy, arduous and sometimes impossible experience. But today there is a viable alternative to surviving those cash strapped cycles, especially during periods of business growth and expansion. This alternative form of financing is known as factoring and is sometimes referred to as accounts receivable financing or asset based lending.

More and more, factoring has become a realistic and workable solution, allowing business to prevail when cash flow uncertainties can threaten survival.

Quite simply, when a company has credit worthy accounts receivables it’s possible through factoring to get an instant cash injection on those receivables. So when the bank has to say no, professionals like Capital Depot can say yes and provide the much needed financing that a business requires.

Capital Depot can react very quickly to the financial needs of its trucking clients, providing them with the personalized professional hands on attention that they require. Freight bill factoring allows a business to satisfy its cash needs with cash flow. It’s a simple process. Your company with quality accounts receivables needs cash. Capital Depot purchases one or a group of those receivables and gives you up to 100% less fees of the face value immediately. The balance is forwarded once the customer invoice is paid in full. And while it’s true that factoring is more costly than other means of lending, borrowers find that the benefits make the transaction well worth it.

One of the biggest advantages of factoring is the short turnaround time, explains Mr. Bodi. “Unlike the banks, we do not have a lengthy loan approval process. So the trucking business owners with whom I deal can have money in hand within the same working day.”

However, in keeping with principled business practices, factoring approvals are quite automatic. A trucking business must be reputable and it must have credit worthy brokers
(customers). But once approved, funding is easily provided on the same day and ongoing financing is limited only by the amount of receivables involved.

Factoring has grown in the last decade and for many trucking companies it is a feasible alternative, often endorsed by their accounts of financial advisers. In many cases, freight bill factoring has made it possible for a trucking business to process orders and undertakes loads from brokers that would otherwise be impossible because of a lack of financing.

Clearly, freight bill factoring has a place in today’s business environment. It can give a trucking company the opportunity to expand a customer base, to increase loads and even to weather a seasonal slump. Fact is, freight bill factoring works.

 

Factoring FAQ:

How many bill of ladings do I have to factor each month?
No volume requirements for factoring, use us only when you need us.

More FAQs »