![]() Trucking companies are responsible for payment if their clients do not pay. There are two types of fleet factoring, classified as recourse and non-recourse plans: Your business gets a percentage of the invoice within a few days and the factoring company takes ownership of the invoice and the payment process.” - The International Factoring Association (IFA) “Factoring allows you to use your own hard-earned assets to create cash for the growth needs of your company. Fleet factoring payments are not loans, rather, they provide regular cash flow and can be used to fund any aspect of business operations. The benefits of doing so include quicker payments and a reduced accounting burden, all of which combine to give trucking companies the increased efficiencies they need to continue growing. In such transactions, the trucking company assigns its invoices to the factoring company in exchange for a small percentage of the invoice. The only difference is that the trucking company now sells its accounts receivable (AR) to the factoring company. The trucking company continues to deliver cargo and transport goods across the nation as it normally would. Once a trucking company begins factoring, their business operations remain relatively the same. The good news is that fleet factoring solutions can provide valuable resources to guarantee quicker invoice payments. While the trend in real-time payment is influencing many industries, it is slow to become standard practice in the trucking industry. Quick invoice payments are necessary to keep fleet operations running and trucks on the road. As such, when invoice payments are delayed by an average of 40 days, having adequate cash flow can become critical. This is especially the case for small- to medium-sized fleets since they usually operate within slim profit margins. However, not all trucking companies have the short-term resources they need to stay afloat. ![]() Keeping up with this consumer demand would not be possible without trucking companies, as their services are necessary for maintaining the supply chain and keeping consumers satisfied. Over 50% of online shoppers aged 18-34 now expect merchants to provide same-day delivery, and over 60% of them are willing to pay extra money for the service. The global market for same-day delivery is expected to reach $20.36 billion by 2027, estimated to grow at a compound annual growth rate (CAGR) of 21.1% from 2020. ![]() For this reason, industries across the globe are making efforts to streamline their business operations. Mega companies like Amazon and Walmart have paved the way for one-click ordering and same-day delivery. When it comes to doing business these days, delivery speeds often matter the most.
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