Transportation Industry Impact and Statistics
With continued growth predicted for the Freight, Trucking and Transportation Industries, their combined impact is quite staggering.
U.S. trucking companies and warehouses in the private sector have an estimated 8.9 million people employed in trucking related jobs with nearly 3.5 million of those as truck drivers.
The American Trucking Association estimates there are 1.2 million trucking companies in the U.S. Of those: 90.2% operate 6 or fewer trucks and 97.2% operate fewer than 20 trucks.
According to those statistics, there stands a good chance that many of these smaller companies are not in a position to qualify for bank loans or carry their accounts receivable for an extended period of time.
How can Invoice Factoring serve as commercial financing for the Transportation Industry?
The options for bank financing based on a small business or owner operated business may be extremely restrictive in the current economic climate. Working capital financing is notoriously difficult to attract within the transportation industry.
Added to the restrictions for financing is the fact that the Transportation Industry depends on a number of “get paid when paid” steps throughout the shipping process. The chain of one person or company having to be paid before the next service provider or company can be paid can extend payment deadlines and negatively impact cash flow and working capital.
Factoring as commercial financing can be the difference between having liquid, available cash flow to sustain and grow business, or being restricted and choked by a slow return of profits.