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 a
