Late Payments Are A Death Knell For Small Businesses The Benefits Of Freight Capitol Factoring
A late invoice can create a snowball effect that’s hard to recover from.
When you don’t receive the money you’re owed you’re left scrambling around instead of moving forward. You’re left attempting to track down late payments, filling in the gap left by a lack of money, and keeping the rest of your business running smoothly. Freight capital factoring is a resource you, quite literally, can’t afford to overlook. Offering you the very best in fast delivery and reliable service, those late invoices will soon become a thing of the past.
If you’re new to the concept, never fear. Here’s what freight capital factoring can do to keep you moving steadily forward.
The American transportation network today is among the most complex in the world. Over 12 million trucks, rail cars, locomotives, and vessels move goods and services throughout the country on a daily basis. According to the Federal Motor Carrier Safety Administration there are nearly six million commercial motor vehicle drivers operating in the United States — with over 28 million small businesses operating and counting, the function of business factoring services will only become better known. The last thing you need while trying to balance both the needs of employees and customers is to worry about late payments.
Bankruptcies are lower than they were a century ago, but they’re still far higher than they need to be. According to recent studies bankruptcies in the United States increased to nearly 25,000 companies in 2016’s second quarter. While some of these are impossible to avoid, others were partially or entirely influenced by not receiving money on time. These small gaps in productivity eventually become too big to fill, leaving many with no choice but to start over new. Invoice factoring services are a necessary buffer to weather life’s unpredictability.
Did you know over 60% of invoices today are paid late? Recent estimates have even gone at length to determine the long-term effect of punctuality. If all invoices were paid on time small American businesses would be able to hire two million more employees. This would proceed to reduce unemployment rates by 30%, just one of the many benefits that would ripple through the country in just a few years. When you look into regular freight capital factoring you do the necessary work that goes into keeping your day-to-day process moving without a hitch.
Invoice factoring, simply put, is a form of accounts receivable financing that converts outstanding invoices within 90 days into immediate cash for a small business. Factoring companies are able to help small businesses bridge invoice payment gaps with more upfront payments, with some as high as 90% of the original invoice. They can also help small businesses avoid the astronomical waiting periods that just stretch the productivity gap wider and wider. These include the 60 day, 90 day, and 180 day waiting period.
Freight broker companies are well aware of the issues that plague small and medium-sized businesses. They know that too many businessowners are waiting for change instead of making change. According to the Wall Street Journal, the factor advances most of the invoice amount at 70% to 90%. This is done after checking out the credit-worthiness of the billed customer. Once the bill is paid the factor will remit the balance, not including the transaction fee.
Freight capital factoring is your quick solution for a rampant problem. See how small business invoice factoring can help you save money and time next year.