Running a Profitable Freight Factoring Brokerage
Owning a freight brokerage business can be extremely profitable, if you can manage to run it successfully. How can you determine that you have a successful freight brokerage business? This is easy. You have a successful business, when you are able to pay your drivers on time; you do not lose business on account of cash flow problems, your balance sheet reflect a fattening bottom line and reputed names keep adding to your list of customers, making it grow bigger with passage of time. This means you have achieved success.
However, in the freight brokerage business things do not move so positively. What usually happens is that on account of poor cash flow, you are unable to pay your drivers on time, which severely hampers your business. The main reason for this situation is slow paying clients. Under norms prevalent in the transport business the practice for customers is to pay freight bills 30 to 60 days after delivery has been made. This puts you in dire straits as far as making payments are concerned, because meeting your liabilities cannot wait till you receive payment from your customers.
If you intend to keep running your freight brokerage business, you need to pay your drivers every week/payday. So, how do you tackle this problem effectively? You factor your freight bills for a small fraction of their value. Factoring gives you immediate access to cash for taking care of your business needs. Your drivers get paid on time, relieving you of the greatest problem affecting your business. As the cash flow problem gets resolved, you are able to concentrate on growing your business.
Once you factor the freight bills of your freight brokerage business, the factor credits your account with 90 to 97% value of your invoice. Factoring envisages purchase of your freight bill at a discount by the factor. This means recovery of payment from the client becomes the factor's responsibility. All administrative liabilities including costs are also borne by the factor, as the factored invoices reflect on the factor's book of accounts thereafter, and not yours. You are free to go about your business having converted your slow paying invoice(s) quickly into cash. It takes only 12 to 24 hours for the factor to credit your account, after he receives the invoices you send for factoring.
To many, bank finance would appear to be a viable option. But, for a freight brokerage business especially if new, this option is practically non-existent. The reason is that banks require proof of profitable business operation for at least a three years period prior to the date of application for the loan. When you have a new business, you will not furnish the required documentation and the bank will deny credit.
However, when you set up a freight bill factoring account, the factor does not look into your credit history. It is the quality of clients that you render service to, which forms the most important part of the criteria for qualification. If your clientele consists of credit worthy customers, who pay on time you have very high chances of qualifying because factoring companies look at your future potential instead of your past history.
The factoring fee is nominal against the tremendous benefits it offers in terms of ready cash, which help to avoid struggle to make essential payments for running your freight brokerage business. The factoring fee usually ranges between 1.5 to 3% of the value of the factored invoice.
Related Tags: factoring, factoring company, freight factoring, truck factoring, truck factoring service
Truckers, are you fed up with high fuel prices?, you can grow your business without a loan. Freight Bill Factoring gives you the cash needed to expand your trucking business. To learn more or get a quick factoring quote visit : http://www.phoenixcapitalgroup.com/quickQuote/index.asp
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are