Why Do Transportation Companies Use a Factor?

Why does the trucking industry lend itself so well to factoring? Simply put, a trucking company must be able to put their hands on cash without much notice. The unforeseen, the unexpected, and the normal expenses such as fuel, insurance, payroll, and sub haulers require immediate payment of cash. These are common obstacles faced by truckers on a daily basis, making incoming cash receipts stretch to cover short-term obligations. Factoring has become a vital business tool in which to financially fuel your business.

As of today, we are still in a "trucker's market" regarding the advantageous position of supply and demand that is reflected by the shortage of truck and driver capacity in the full-truckload, long-haul arena. For those of you with short memories, this phenomenon occurred last in 1994 where for an entire year there was much more freight than there were trucks available to haul it. In 1995, however, everyone immediately added capacity and by midyear there was a glut of trucks and the "trucker's market" evaporated.

This time around, due to ever upward fuel prices and an increased difficulty in finding quality drivers, companies have resisted the urge to grow drastically and 2005 marks the second consecutive year where the industry can charge and collect fuel rebates, charge and collect detention fees, and charge and collect higher per mile and per trip rates for hauling freight.

The need and pressure to grow your respective companies by adding trucks is on the increase. As a result of this, more and more trucking companies are turning to FACTORING as a method to finance growth.

Our Clients Say It Best

"Factoring our receivables with OCC saved our company. A year and a half ago, we were ready to shut our doors until someone told us about Orange Commercial Credit. We had always known about factoring, but were very leery of it. Why give away our money when we don't seem to have enough money as it is? But our reservations were unfounded. With OCC's help, we were able to get the cash flow we needed to stay in business and the security of receiving our payments quickly. The small amount we put out in factoring fees doesn't compare to the headaches and hassles of not knowing when our next check will arrive in the mail. It is with great pleasure and success that we remain associated with Orange Commercial Credit"

Find out more about factoring with Orange Commercial Credit

Why Do Transportation Companies Use a Factor?

Points to consider while shopping for a Transportation Factor