Rick has been operating his small carrier business successfully for several years. His company features reefer (refrigerated) transports of reefer freight for produce distributors in his home state of Florida. He has a growing number of distributors under annual contracts. He is aware of the opportunity to grow his business as a number of his existing clients are expanding their operations and several new distributors have reached out to him with interest.
His company, though one of the smaller carriers in the Florida, transports reefer loads successfully along the I-95 corridor and the I-10 corridor to a variety of wholesalers and retailers. While his business is growing, Rick is experiencing some cash flow challenges, particularly when trucks needs fuel or repairs as well as during peak payroll periods. Rick needs a way to ensure his cash flow issues so he can continue to serve his existing clients well and add new clients along the way.
He currently invoices customers monthly, but finds only a limited number actually pay their invoices quickly with most paying after 40 to 45 days, which is creating the cash flow issues. After looking at all the options available to him, Rick decides to bypass the traditional loan route and try invoice factoring to meet his cash flow needs and cover his operating expenses and maintenance costs. . Invoice factoring allows businesses like Rick’s to essentially sell unpaid client invoices to access the cash needed for short-term finances with low fees and without the need for a traditional loan. Invoice factoring will help Rick keep his reefer freight fleet running by meeting his cash flow issues. It will also provide some breathing room for him to grow his clientele.
With ongoing invoice factoring, Rick has been able to meet payroll easily, cover fuel costs, and keep his fleet of trucks well-maintained. After a year, he has also been able to add 10 new annual contracts with more in the works. Rick is able to choose the level of invoice factoring needed at any given time to make ends meet when his slower paying clients create challenges for his company. Not only has invoice factoring kept Rick’s cash flow issues from effecting his company growth, but without the burden of a traditional loan, it has allowed Rick to add an additional driver to his fleet with the prospect of another driver to be added soon.
Stephanie has a bachelor's degree in psychology and has been a professional writer for over 15 years. Her client list includes New York Times bestselling authors, publishing houses, prominent public figures and successful business owners. She resides with her family in Florida.
