Trucking Financing: Consider a Working Capital Advance
Is your trucking company ready to expand, if only you had the money to do so? As you probably know, just because a company is successful doesn’t mean you have thousands of dollars to put into improvements at one time. Luckily, you do have options. Consider a working capital advance as a means of improvement your trucking company sooner rather than later.
In simplest terms, a working capital advance allows you to borrow from a lender against money you know you will make in the future. Imagine you show a lender that you average about $50,000 per month in revenue. That lender could then give you $50,000 upfront and allow you to pay it back via small withdrawals each day over a specific period of time.
Payments are based on percentages and not a specific dollar amount, which means you will never give up all your daily profits to the lender. In addition, you can choose a short-term or medium-term repayment plan in many cases. If you decide to pay the loan back early, there usually isn’t a penalty for doing so.
Many companies prefer using working capital loans because they are easier to be approved for than a traditional loan. Lenders are less likely to factor in a business owner’s personal credit score or ability to provide collateral and instead focus on what the actual business can do. There is less paperwork, making it easier for busy people to apply for, and applicants typically receive a decision within a few days, whereas a traditional loan can take weeks or months be approved.
As the owner of a trucking company, you can use a working capital advance for many reasons. Perhaps you want to expand operations but need a new truck. An advance can help. You can also repair or upgrade your current trucks, purchase new loading and unloading equipment, pay for your drivers and employees to undergo special training or even hire new employees to further expand your company. The possibilities are virtually endless.
To apply for a working capital advance, you simply need to provide some basic information and a few months’ worth of income statement for your business. In most cases, you won’t even have to explain to the lender how you intend to use the money because the company is more interested in getting its money back than how you spent it. Regardless of how much money you hope to borrow, always work with a reputable lender. Doing so ensures you do not end up overpaying in interest or coming across other problems.