Factoring Blog Posts
It can be stressful and frustrating when your business experiences cash flow fluctuations. These fluctuations are often the result of payment gaps in your accounts receivable. Simply put: you’re not getting your funds fast enough after completing your service or projects.
This is where business factoring comes in. Factoring services help businesses like yours bridge those cash flow gaps with upfront cash advances — usually 90% or more of the original invoice amount.
Many businesses benefit from accounts receivable financing option. It provides business owners with flexibility, whether a short-term funding solution or a long-term financing option for managing cash flow.
If you’ve never heard of factoring before, we’ve compiled a list of industries that can benefit the most from invoice factoring.
The transportation industry
About 12 million trucks, vessels, rail cars, and trains move goods across the transportation network. Freight invoice factoring can help a wide variety of transportation businesses, including owner-operators, large fleets and freight brokers.
Freight invoice factoring is a simple solution for freight companies to increase their cash flow and better predict when payments will come in. Bank loans require good or established credit. They might be a non-starter for owner-operators or fleet owners just getting started, or others who might have hit a rough patch.
Freight invoice factoring gives you the ability to have your invoices advanced to you without putting your company in debt. You can use freight invoice factoring to help you pay your drivers, pay for gas and repairs and even buy new trucks.
Best of all, it’s your own money you’re using. It’s just been advanced to you. There’s no debt you need to worry about.
The apparel industry
The apparel industry is a tough nut to crack for a small business. Not only are you competing with other boutiques, but you’re also up against other e-commerce online stores that typically get paid at the time of purchase. In order to remain competitive, it’s crucial to maintain a steady cash flow to keep your company’s operations going.
Cash flow peaks and valleys happen throughout the season for every business. But if your apparel company business doesn’t maintain traction, it can lead you to wonder if you need to stop taking on more orders. Every business owner knows that you need money just to fulfill existing orders. You have to pay your staff, rent and other fixed costs.
With invoice factoring, you don’t have to stop taking orders. When you use apparel invoice factoring, you can get you paid on previous orders quickly, so you have the capital to update your equipment, make your payroll and stock up on inventory. A steady cash flow means steady business and means customers receive their orders on time.
The staffing industry
Staffing industries have slightly different challenges than other industries — promising to pay contract-based workers on behalf of your client. You don’t pay, the contractor doesn’t work and your client’s operations stall.
The good news is that staffing invoice factoring can solve the payroll issues, in addition to the costs of sourcing, recruitment and hiring. With a consistent funding source in place, you can more confidently bid on larger projects and advertise your services.
The manufacturing industry
Even the biggest manufacturing companies have issues with inconsistent cash flow. And when manufacturing businesses are low on cash because they’re waiting on money from their invoices it can make it impossible to accomplish even simple goals.
It’s all too easy to consider taking out a major bank loan to pay for these expenses instead of waiting for the money from your invoices to arrive. But this can drive your business into debt, which no company wants.
Manufacturing invoice factoring can help you avoid debt and gain the working capital you need to meet payroll on time, buy new equipment, repair equipment parts and more.
The technology industry
The technology industry is another highly competitive industry for small businesses. Technology companies face a saturated and competitive market for their services. The pace of business and the need for quick updates and upgrades to your company’s hardware and software requires access to capital.
More than that, technology companies are always trying to hold on to their best talent. Invoice factoring for technology companies can help mitigate potential payroll issues and keep your team intact.
Remember, with invoice factoring, you can fund your business through your own unpaid invoices instead of taking out a bank loan.
Bank loans often have high interest rates that can come back to bite you later. But with invoice factoring, you’re using your own capital. It’s just being advanced to you so you can use it when you need it.
We’ve discussed the benefits of invoice factoring in previous blog posts. From improving cash flow to providing stability, small businesses of all types and sizes — even trucking companies, — use and benefit from factoring companies to help their enterprises grow.
Factoring companies specialize in helping small businesses drastically cut down wait times on payment, meaning that you can avoid waiting for 60, 90, or even 180 days for customer payments. But which businesses can make the best use of these services? Here are just a few large volume industries that can benefit from the assistance of invoice factoring services.
Staffing Firms Industry
Staffing agencies frequently use invoice factoring services for one main reason: they need to pay their employees regularly. But if their clients aren’t paying quickly enough, invoice funding or factoring services can step in and make sure the company’s hard-working employees get their paycheck.
Access to immediate working capital is critical for a staffing company needing to make payroll on a weekly basis and still be able to take on new clients efficiently without worrying about being able to spend resources on finding and hiring new people.
In staffing, it’s pretty simple: no money for payroll, no people and ultimately loss of contract.
Many staffing companies can end up failing or having serious financial issues simply because of slow payments. Partnering with a factoring company and using strategic invoice funding ensures your people get paid, and you keep the contracts.
Professional Services Firms
Various professional firms also take advantage of invoice factoring options because of high-budget projects that take time to pay off. For example, law firms and architecture firms’ services usually range in the thousands of dollars, which may take months for businesses or corporations to pay off. These firms need capital to run efficiently and promote growth. Invoice funding can be an alternative to a traditional bank loan.
Finally, businesses focused on manufacturing can invoice factoring services for various reasons. Many times, the equipment they need for everyday operations becomes damaged, stalling production until it can be repaired. Repair costs can be expensive because of the highly-specialized equipment needed for production, and invoice funding can provide immediate capital to keep operations running. Without the funding required to stay on top of production costs, including unforeseen disruptions from breakdowns, the manufacturer risks missing deadlines and potentially losing out on anticipated money.
As we’ve discussed in previous blog posts, invoice factoring is a type of accounts receivable financing that converts outstanding invoices — due within 90 days — into immediate cash for your small business.
But before you sign any type of contract or agreement for an invoice advance loan, it’s essential to ask the right questions to understand what services you’re getting for your money. If you’ve signed any contract before, you know that it doesn’t matter what was discussed; what matters are the terms you agreed to when signing at the bottom.
As a business owner, you sign a lot of documents, and it’s common to breeze past the fine print and take the sales person’s word for it. With that in mind, we’ve collected a few important questions to ask your invoice factoring company before signing a contract.
How long has the invoice factoring company been in business?
If a company has been around for a while, you can typically trust that they’re not going to close shop and disappear with your money. And when you’re trusting your invoicing and collections to a third party, it’s important to partner with a company that has the necessary experience, structure and team to handle your business.
Remember: invoice factoring companies become an extension of your business and work on your behalf to invoice and collect from your clients. This relationship requires professionalism, respect and a high-level understanding of different industries. These skills are not learned in a day of training. They are part of a company culture that puts an emphasis on customer-first service.
It’s important to mention that years in business don’t always translate to success. But if a company has been around for a while, you know that it’s survived economic downturns in the past and can likely weather ones in the future as well.
How are the fees
Each and every funding company structures their fees and finances differently, so it’s absolutely vital to make sure you understand every word of the contract when it comes to the way your business will be charged and paid.
Invoice factoring companies offer different funding products based on industry, size and growth goals. Some things that might affect your factoring fees:
- Length of contract
- It shouldn’t be surprising to learn that the longer you sign up for a
service, the less your fees will be. Invoice factoring is no different. Most
companies offer month-to-month, 6-month and year-long contracts. If you’ve
never used an invoice factoring service before, it might make sense to start
with a month-to-month and then upgrade to a longer-term deal and save some
- It shouldn’t be surprising to learn that the longer you sign up for a service, the less your fees will be. Invoice factoring is no different. Most companies offer month-to-month, 6-month and year-long contracts. If you’ve never used an invoice factoring service before, it might make sense to start with a month-to-month and then upgrade to a longer-term deal and save some money.
- Type of product
- Invoice factoring has different options for different business types, but the two most common are recourse and non-recourse. Recourse factoring tends to be cheaper because the client assumes the risk of non-payment. For example, if your client fails to pay back the agreed upon amount because they went bankrupt, the factoring company will charge that back to you. Recourse is a great program if you have established clients who pay on time.
For startups and less established businesses, a non-recourse agreement might make more sense. In this arrangement, the factoring company takes on all the risk of non-payment if the business goes bankrupt. So even if your client doesn’t pay, the factoring company will not charge back the unpaid invoice. The fees associated with this product might be a little bit more, but it also provides you with more confidence and peace of mind.
Regardless of product or type, you need to know how the fees are structured. When you get your contract, read it again and again until you come away confident knowing what it says. Once you sign, you’re not likely to be able to make changes.
According to the Wall Street Journal, “The factor advances most of the invoice amount … after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction (or factoring) fee.”
Again, each company is different, so take all the time you need to ensure you understand your financial obligations.
Are they committed to excellence?
You work hard to make a name for yourself and to set your business apart from your competition. Wouldn’t you want to work with an invoice factoring company that has the same goals?
The fact is, industries change. Business models should be constantly reevaluated and tweaked to better serve the customer. In today’s world, you need a business partner that exercises a high degree of flexibility and is able and willing to adapt with the times. Look for a factor that’s a pioneer in their space and is constantly looking to add more value to your business.
Can the invoice factoring company help to grow your business?
The answer to this should almost always be ‘yes.’ At a minimum, an invoice factoring company should be providing your small business with the immediate cash flow it needs to grow and evolve to reach its full potential.
Many factoring companies have industry partnerships and referral partners that offer products and services that can you can take advantage of at a discount. Be sure to ask the factoring company if they have existing relationships with other businesses that you can leverage for your business.
All of this boils down to the factoring company taking an interest in your business’s long-term success.
Ask yourself, “Do they care about my business? Or, do they just want my money?” Every company has to make money. Otherwise, they cease to exist and can’t help anyone. But, if they’re committed to the success of your business, they’ll take the approach that if you don’t succeed, they won’t succeed either. Choose a factor that is knowledgeable and passionate about your industry and theirs. In return, they’ll be passionate about your business.
Get Started with Triumph Business Capital
Ultimately, keeping these questions in mind can help you scope out the best invoice factoring business and contract. For more information about invoice factoring or invoice funding, contact Triumph Business Capital.
Cash is essential to any business, and there’s a debt-free commercial finance option that ensures that you receive it quickly. It’s a dependable, low-risk alternative when compared to a line of credit or a loan, and you certainly won’t have to spend weeks applying for it. We’re talking about government invoice factoring.
We’ve created a comprehensive guide that illustrates the benefits of factoring government invoices, as well as a sample of the types of companies that should consider government contract factoring.
What Are the Benefits of Government Contracts?
Government contracts provide steady, profitable work to contractors. These contracts can also last for years. Once you’ve successfully navigated the procurement process, you have a better sense for how to seek out other government contracts in the future.
And as a contractor, when you have one government contract, you can easily acquire more, and having the government as your customer is potentially a huge opportunity for stable business growth. You shouldn’t have to turn down these opportunities because of financing challenges. Steady working capital ensures that you can bid on new projects confidently. You don’t want to have to go back to the government during the project and tell them that you have no funding to continue the contract.
Even as a government contractor, you may face similar issues that other business owners face — stagnant cash flow trapped in your accounts receivables. If you’re a contractor or subcontractor who doesn’t want to wait a long time for payment, you may want to consider government contract factoring before you experience any cash flow problems and avoid signaling any hiccups that could disrupt the contract.
What Exactly is Government Contract Factoring?
Government contract factoring can make it possible for small- and medium-sized companies to do business with the government. You’ll receive an advance depending on the value of your contract with a government agency, even if you’re completing projects upfront. This bridges any cash flow gaps between when you finish the work and when the government actually pays.
The government invoice factoring process works similarly to other industries served by invoice factoring. A factoring company like Triumph Business Capital will take a look at your unpaid invoices and buy invoices at a discounted rate, and we’ll offer you a cash advance. However, from industry to industry, there are differences. For instance, in government contract factoring, sold invoices need to be collected from the government instead of private or public companies. Of course, the U.S. federal government is the largest debtor in America, so it’s going to function differently than smaller entities.
What Are Some Advantages of Government Contract Factoring Agreements?
Whether you have a fixed price contract or labor-hour contract, you still have the opportunity to factor your invoices. It’s an extremely flexible solution that you can use as you need to. Plus, it doesn’t matter the type of contract you have. With factoring, you can have a consistent base of working capital.
Here’s what you can expect from government invoice factoring: a third-party factoring company provides you with the necessary working capital to make investments or pay employees and vendors. The remainder of the money is held in a reserve account until the government pays the invoice. Once the government agency pays, you’ll receive the rest of the cash (minus any agreed upon factoring fees). In fact, you’re paid up to 80% or 90% of the invoice quickly after you apply and submit your invoice and its approved.
Instead of waiting for a traditional loan, you can resolve cash flow issues with factoring now if you have outstanding invoices. What’s also important to remember is that if you’re a new business, or a business with a low credit score, you may not even be able to qualify for a bank loan or line of credit. Government contract factoring takes a broader picture view, one that takes into account your clients’ credit and likeliness to pay.
Some Issues Government Contractors Will Experience
One of the greatest disadvantages of government jobs is that they don’t guarantee payment when you need it most. While the government always pays their companies, they aren’t in any hurry to take care of your invoice. Many things can affect invoice payment: elections, government shutdowns, holidays, and other occasions can slow payment. Fortunately, you don’t have to wait one, two, or even three months for payment. Instead, the factoring company will pay you first, and then collect payment from the government. Should the government leave your contract unpaid, your business is protected by the Contract Disputes Act of 1978.
Government contracts are competitive and hard to obtain. They can take months to secure, and a larger company can afford to underbid the smaller, less established ones. Even if you’re awarded the contract, there’s no guarantee that you’ll have the initial or ongoing financing needed to start and maintain it.
With invoice factoring, your financing is tied to your invoices, not the terms of the government contract. That means if you have an invoice for completed work or services, you can factor that invoice and receive immediate payment to continue business operations or investments in equipment or personnel.
Which Businesses Should Consider Government Contract Factoring?
Factoring works for a variety of different projects and industries. Here’s a sample of the types of industries that use invoice factoring to help fund their businesses:
- Oil and Gas
- Cleaning & Janitorial
In considering invoice factoring as a government contract funding solution, you should make sure to satisfy the following:
- Unpaid invoices or anticipate longer than comfortable payment terms
- Municipal, local, state, or federal debtors that owe you money and have good credit
- Invoices that the debtor (in this case, the government) accepted for the completed products or services
Not all factoring companies will offer government invoice factoring, but you don’t have to worry when you work with a factor that specializes in handling government contracts. Triumph Business Capital works with businesses of all sizes and handles their government contracts. We follow the guidelines surrounding the Federal Assignment of Claims Act (FACA), ensuring that the entire invoice factoring follows all required laws and mandates.
Whether you’re just starting out with government contracts or you’re an established business working on fulfillment, you can benefit from invoice factoring to help bridge the gaps from completion to payment.
Our professionals have extensive knowledge of government contracts, and we look forward to providing our clients with the best solutions for their businesses. Contact us today to learn more about how we help government contractors get working capital.
Knowing more about your invoicing process is essential to helping your business thrive
What is invoice factoring?
Invoice factoring can be particularly useful for small businesses looking to keep their cash flow moving and their resources consistent. Invoice factoring helps B2B companies boost their cash flow based on their outstanding invoices. This means immediate access to your money without having to wait for payment from clients, which could leave you waiting for 90+ days.
How does invoice factoring work?
Invoice factoring is the process of providing you working capital through the selling of your accounts receivables. You get your money immediately — AND DEBT-FREE — at a discount. According to the Wall Street Journal: “The factor advances most of the invoice amount … after checking out the creditworthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction fee.” Invoice factoring provides immediate access to the majority of funds that your customer owes you, allowing you to keep your business operating as normal. This is especially helpful with businesses struggling with slow-paying clients.
What does “factor rate” or “factoring fee” mean?
When a factoring company advances you money based on your outstanding invoices, it will charge a small fee. The percentage of these funds that goes to the factoring company is what’s known as the factor rate or the factoring fee.
For example, if a factor rate on a $10,000 advance is 3%, the company would take $300 as a fee. Remember, this is debt-free capital that you can use to make investments, purchase equipment or pay your staff. Usually, the rates will range between 1% and 5% depending on various criteria. Invoice factoring can be a useful service for small and large businesses alike looking to keep their cash flow consistent.
Work with an established factoring company
Triumph Business capital is a recognized industry leader. For nearly 15 years, we’ve partnered with small to medium-sized businesses to simplify and strengthen their operations. Getting started with an invoice factoring company is easier than you might think. Our team of experts is here to walk you through the application process, contact Triumph Business Capital.
Working with commercial invoice factoring companies has numerous benefits and can provide near immediate cash flow for your business. In fact, factoring companies can help small businesses bridge invoice payment gaps with upfront payments, providing nearly all of the original invoice amount. That money is then immediately available for you to use to fund your business operations — make payroll, invest in new equipment, pay vendors, etc.
But as is the case with other types of commercial financial solutions, applying for invoice factoring services requires a certain level of thoroughness and attention to detail. The more you know before, the faster the process will be. Ultimately, that means quicker access to working capital for your business.
Here’s what businesses need to know about the invoice factoring application process.
Know Your Company’s Financial History & Business Setup
Before you meet with any specialists or submit any applications, it helps to have a solid understanding of your company’s financial history. Some questions you might be asked:
- What type of work do you do?
- How many current clients do you have?
- What is your monthly revenue average?
- How much do you have in outstanding invoices?
- Do you have any liens or judgments against your business?
Be prepared to answer these questions and provide documentation to support them.
Meet with an Invoice Funding Specialist
Before you submit your official application, you’ll likely be required to consult with an invoice factoring services specialist about the options that are best for you based on your business’ financial history and needs.
There are a few different types of factoring services available, and in addition to determining whether your business is eligible, a specialist can determine the best type based on business your needs.
Your rate is going to be based on the information that you provide during these conversations, so it’s critical that you’re upfront about any potential red flags like bankruptcies or tax liens. They’ll come up on a routine credit check anyways. Remember: when you’re applying for invoice factoring services, more goes into the approval process than your credit history. Past issues may not disqualify you from getting the funds you need.
Understand the Contract and Commitment
Finally, be aware of the specific terms of the factoring agreement that’s offered to you. Some factoring companies require you to submit a minimum amount in invoices each month. If you don’t meet that amount, you may be charged a fee.
Also, remember that you’re selling your invoices to a factoring company, which then collects that outstanding amount from your client based on the terms of your contract. If your client doesn’t pay that amount by the contract date, you may be charged back by the factoring company.
These and any other fees should be listed clearly in your contract. Read your contract to make sure that it matches everything discussed. Then, read your contract again. Once you sign your contract, you have little to no chance of making changes. Make sure you know what you’re signing.
Work with an established factoring company
Ultimately, getting started with a small business invoice factoring company is easier than you might think, but only if you have a good understanding of your company’s past and present financial situation.
For more information about commercial factoring companies, contact Triumph Business Capital.
Economies are unpredictable and demand for certain products or services ebbs and flows depending on any number of reasons.
Bankruptcies in the U.S. increased to 25,227 companies in the second quarter of 2016 alone. It’s important to stay on top of corporate finances, especially in the early stages of business development and avoid ‘bad debt.’ Bad debt is money that you can’t recover — a client doesn’t pay you for work you’ve done, for example.
Even a small amount of bad debt can build up and slowly chip away at your business’s financial security. With that in mind, here are just a few of the top signs indicating your business may have ‘bad debt.’
It’s one thing for you to get a client’s voicemail once in a while, but if they seem to be avoiding your calls left and right, consider it a red flag. If business owners had the funds or a plan to pay, they would speak to you directly to avoid misunderstandings and stop the phone calls.
We all know business owners get busy, and sometimes reaching out to them by email might be more helpful. If you still can’t get a response, it may be time to send the account to collections, or if the financial situation is urgent, consider working with an invoice factoring company, which specializes in advancing you the money and working with your client to collect payment.
Flexibility is a necessary trait for all business owners. If a client forgets to pay once, or is a day or two late, you can be a little bit more forgiving.
But if you notice that the same client is late or fails to pay, it could be a sign of something deeper. While you might think you’re being helpful by extending time for your clients to pay, but you could be jeopardizing your business if it drags on, and if it’s frequent.
Remember — you run a business. You need money for your business and to pay yourself. In order to maintain credibility and minimize time between invoicing and collection, you need to be firm on your payment terms. If a client consistently misses payment deadlines, it might be best to send that for collections and move on from that client.
Change of Company Ownership
This is a sign that only applies to corporate clients, but it’s worth mentioning. If a company undergoes a change in ownership or upper management, they may know nothing about the company’s past debt and therefore feel no obligation to honor it. In other cases, the company takes on the debt with the purchase. Either way, look out for this red flag when it comes to past debt.
While dealing with bad debt is never easy, you should know that you have options that can help. Invoice funding, or invoice factoring as it’s also known, is designed to provide fast cash flow to your business. For more information about hiring invoice funding companies for small business invoice factoring services, contact Triumph Business Capital.
It may sound shocking, but it’s true: Nearly 60 percent of invoices are paid late. Considering the fact that small businesses (defined as businesses with fewer than 500 employees) account for 99.7 percent of all business in the United States, late invoices are often a sign of a bigger financial issue. Invoice payment and collections are often the most challenging part of a small business owner’s day-to-day operations. You’ve done the job, and now you need to get paid. Some clients are slow to pay, and other larger companies have established payment terms of 30 days or more.
You can’t run a business on a promise to pay. You need capital just to keep your business going. How many times have you said, “If I could get paid for that job or service today, I could do X, Y or Z.”
Sometimes X is paying your team, and Y is buying a new piece of equipment that’s going to help your business become more efficient. You’re trapped and so is the money tied up in your unpaid invoices.
Late invoice payments can be problematic for small businesses in need of immediate financing. Often, small business owners sabotage their own success and growth by not having clear expectations about their payment terms. They are excited about having the business, but don’t hold their clients accountable for paying on time.
There is, however, a wide range of solutions available that can help your business collect the money it receives. Here are just a few proven strategies that can reduce late invoices for your business.
Set Rigid and Non-Negotiable Deadlines
While you don’t want your business to come off as overly demanding or money-hungry, your customers need to realize that you need cash flow to stay afloat. Ask yourself: “Would my client wait an indefinite amount of time for payment from its clients?”. Of course not and neither should you.
Start by being very clear about the way you communicate invoice policies to your clients. Use deliberate language that portrays to the customer that you’re a reputable business that relies on customers to pay their invoices on time. The policies and due dates should be non-negotiable, and instead of giving them a number of days to pay (30, 60, 90), give them one solid date to serve as a rigid deadline before they incur a penalty. All of this should be spelled out clearly in your terms.
Automate the invoice payment process
The best way to manage your invoices and enforce your invoice payment policies is to automate the process. As soon as you’ve completed the work, submit your invoice. Then, allow whatever app or service send regular reminders as the due date approaches. It’s also helpful to include gentle email reminders that they will incur a late fee penalty if they pay late. Again, allow the technology to handle that for you. Many services will automatically update the invoice to reflect the late payment into the total.
Using technology gives you a consistent paper trail to reference if you’re client is slow to pay, and it allows you to focus on other areas of business without having to waste time on a phone call or updating an invoice.
Consider Small Business Factoring Solutions
If your business has tried the method listed above and is still having some trouble getting customers to pay their invoices on time, consider small business invoice factoring as a solution to cash flow issues. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 30 to 90 days into immediate cash for your small business.
Knowing how to stay diligent in keeping up with invoice payments can help your business stay on top of finances. For more information about factoring company, freight or invoice funding companies, contact Triumph Business Capital to discuss how small business factoring can help with your invoice payments.
Small businesses (defined as businesses with fewer than 500 employees) account for 99.7 percent of all business in the United States, making them a fundamental part of the economy. But anyone who’s ever owned a small business can tell you that it’s not always easy to stay afloat when it comes to competition and cash flow. Bankruptcies in the U.S. increased from 24,000 to more than 25,000 between the first two quarters alone in 2016, so if your business is struggling to make financial ends meet, we have some suggestions for improving your small business cash flow.
There are several viable solutions that can help you stay afloat, even if you’ve hit some momentary bumps or you’re dealing with clients who are taking weeks and months to pay. Here are some of the most common cash flow problems small businesses face as well as how to best resolve them.
Lack of Funding
Many small businesses experience a lack of funding at some point or another, but it can stem from several causes — not enough business, clients not paying, spending more than you’re making.
One solution — if you have the credit — is to apply for a small business line of credit, which is similar to how a typical credit card works.
In a small business line of credit, you pay interest on your outstanding balance only, rather than the total line of credit. Your available credit increases and becomes available for borrowing once you pay down your balance, just like a credit card.
As mentioned, you typically need to have a high enough credit score to get approved for a business line of credit. For this reason, new businesses can struggle to gain momentum early on because they don’t have sufficient business and credit history.
Generating new business is difficult if you’re a startup or a young company with no industry reputation to leverage. You’re competing against other companies with years of experience on you, and you have no easy way to get your name in front of potential clients without having money to spend on advertising, which can be costly. And because you’re unestablished, you can’t turn to banks.
Most companies hit rough patches, and their credit can take a hit if they don’t have the funds to pay their bills because clients aren’t paying on time. This limits the amount of funding options available for small business owners.
Poor or no credit history is one reason why many small business owners are turning to small business invoice factoring to increase their cash flow. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 30, 60, or 90 days to improve your small business cash flow.
Unlike a bank loan, invoice factoring doesn’t hold your credit history against you. Instead, factoring companies look at the credit of your clients when determining whether you qualify. This could be a solution for small businesses looking for capital without using banks.
Nearly 60 percent of invoices are paid late, causing a potential chain reaction through your business and your personal lives. If clients pay late, you pay your bills late, your credit suffers, and the snowball continues.
Many small business owners do not have the savings necessary to float payroll, vendor payments and other business operations for weeks or even months. Your clients may have existing terms that make it difficult for you to predict when you can pay your people or your bills.
Small business invoice factoring can help here, too. If you have unpaid invoices in hand, the factoring company will fund you most of that total, minus a small fee, and then work with your client on payment. As a result, you get your money, and you get back the time you’re losing trying to collect from your client.
Ultimately, understanding these common small business cash flow problems and solutions can help you make the right decisions for your financial needs. For more information about hiring top factoring companies, contact Triumph Business Capital.
According to the Federal Motor Carrier Safety Administration, approximately 5.9 million commercial motor vehicle drivers operate in the United States, and many of them frequently take advantage of load boards as well as load factoring companies, also known as invoice factoring or freight bill factoring companies. Factoring companies can help you improve your cash flow by paying you when you deliver a load. Most load boards allow you to search for loads based on your specific truck information — type of trailer, starting point and destination, etc. If you’re looking for spot freight, you should be hitting the load boards and posting your truck daily.
Here are just a few top tips to help you choose the right load boards.
Browse a wide variety of load boards.
This should come as no surprise, but when browsing load boards, failing to browse a wide enough variety can cause you to miss out on some that may have been a perfect match. Load boards come in countless types, all with different features and offerings. Take the time to analyze your personal needs and explore a wide variety of load boards before choosing the ones that are best for you.
Some offer different levels of subscription and provide a lot of information about the broker or shipper posting the load as well, such as average days to pay, and what the average for that load and lane is.
Look for reviews online.
This may seem like common knowledge, but many people tend to overlook this crucial step. The fact is, looking for load board reviews online essentially means that others have done the legwork for you, and it drastically reduces the risk of choosing a load board you’ll be dissatisfied with.
Take the time to scour the internet to find the most accurate and up-to-date reviews. What are other people saying about how a particular load board helped them? And of course, try to avoid reviews that are on the load board’s website itself. These are more likely to be biased or filtered for positivity.
Are you a member of a trucking group online? Throw out your question there. You’ll get no shortage of reviews straight from people who use these load boards every day.
Know which information to give out (and which to protect).
It’s important to keep your own privacy protected during your search for the right load board. This means you shouldn’t give out too much information too soon. If a load board is asking for more information than is truly necessary to help you get started, it may be a red flag.
Look for load board integrations/partnerships that can help your business.
Many of the leading load boards have partnerships with other industry leaders that can help your business.
DAT, the largest load board in the country, has an exclusive integration with Triumph Business Capital. Right from the load board, you can see if a load is pre-approved for invoice or freight bill factoring if it has a green check mark next to it. That check mark provides you peace of mind that if you accept that load, and you factor with Triumph, you will get paid on that load guaranteed. Triumph will also run credit checks on brokers or shippers you’re thinking of taking a load for.
Your business credit score is something that can have a huge impact on how you’re perceived by your customers, competitors, and potential lenders and investors. The higher your score is, the more credible and trustworthy you’ll seem.
Invoice factoring is a form of business financing that can impact your credit score. At Triumph Business Capital, we get questions from business owners who are concerned that factoring their invoices will have a negative impact on their credit score – and yet the opposite is true. Here are three positive ways that invoice factoring can affect your credit score.
#1: Get Business Capital without Lowering Your Credit Score
If you apply for a business loan or line of credit, the inquiry itself – even if you aren’t approved – can have a negative impact on your credit score.
Factoring is different because it provides an ongoing source of capital by advancing money on your invoices. As soon as you complete work or ship an order to a client, you can factor the invoice and get your money immediately.
That cash flow doesn’t require a check of your business credit score. In other words, factoring your invoices can give you the money you need to grow your business without your credit score taking a hit.
In turn, invoice factoring can increase the chances that down the line, you’ll be able to qualify for additional financing.
#2: Pay Your Bills on Time – or Early
The single biggest factor in determining your business credit score is the timeliness of the payments you make to your creditors and vendors. It’s common for small and medium-sized businesses to wait until they get paid to make good on their bills. The problem with this approach is that it inevitably leads to delinquency – and ultimately, to a credit score hit.
Factoring your invoices provides you with the day-to-day cash flow you need to pay your bills on time. You may even be able to pay them early, increasing your credit score and making it easy for your business to qualify for credit terms with your suppliers – or even to raise your credit limits, so you can accept and fulfill large orders to grow your business.
#3: Increase Your Credibility with Customers and Lenders
A solid credit score increases your credibility. Anyone who’s considering doing business with you, whether it’s a supplier, a vendor, a customer, or a lender, will likely check your business credit score to see how you run your business. A high score, while not the only consideration, helps secure their trust.
Another way of looking at it is that a low credit score is very likely to have a negative impact on your business. Factoring your invoices provides the financial stability you need to increase your score and build financial credibility over time.
Get business credit help from Triumph Business Capital
You don’t need to worry that factoring invoices will hurt your company’s credit score and credibility. In fact, the regular cash flow and financial stability that invoice factoring provides can help you increase your score, attract new customers, build credibility, and grow your business.
To learn more about Triumph’s factoring services, contact a representative today. We help thousands of business owners from different industries get the working capital and business credit help they need to grow their businesses.
Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 30, 60, or 90 days into immediate cash for your small business. While invoice funding companies work with businesses in many industry sectors, staffing agencies are looking to invoice factoring services for help with payroll funding. According to a U.S. Bank study, 82 percent of businesses fail because of cash flow problems. Understanding the unique range of benefits that invoice factoring services can provide for your staffing agency can help you make the best financial decisions. Here are just a few ways small business factoring can help your staffing agency grow.
Staffing agencies have unique payroll funding challenges
Even though small businesses (defined as businesses with fewer than 500 employees) account for 99.7% of all business in the United States, staffing agencies have a business model that’s different than most.
Before placing a candidate with a client, the agency has to a) market its services effectively, b) pay for advertisements to find personnel and c) ensure it has enough money to make payroll. Your client is trusting that you will be able to both run your day-to-day operations and most importantly pay that person.
The client doesn’t receive the actual bill for the staffing agency’s services until the employee has worked and submitted a timecard. This process can take weeks and even months before a staffing agency will see its first payment. Established business or not, few companies can afford to wait weeks and months for payment, not when getting people paid is their primary priority.
Invoice factoring can help staffing agencies reduce turnover.
It’s been estimated that if all invoices were paid on time, U.S. small businesses could collectively hire 2.1 million more employees, which would reduce unemployment by 27 percent. This is particularly relevant for staffing companies. As businesses have the capacity to hire more staff, staffing agencies can provide the necessary contingent labor force to meet the swells in demand.
But it also means greater pressure on the staffing agency to find long-term payroll funding solutions. If you can’t pay your employees, they’ll move on to the next gig, and your client is left hanging, and you’re looking for another person AND trying to solve your payroll problems.
Remember: keep your employees, keep the contract.
If you’re looking to hear more about how invoice funding can help your business, contact Triumph Business Capital today. We work with thousands of business owners every day, providing them the working capital to make payroll and grow their business operations. We can help you, too.
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In an industry that is constantly changing, it’s essential for freight brokers to stay informed, connected and visible in the transportation community. We have gathered the best freight brokers events. These events give insight into market trends, access to demo the latest freight technology, education from freight industry leaders and network with logistic professionals.
FEBRUARY 25-26, 2019
FreightWaves F3 Future of Freight Festival
In its inaugural year, The F3: Future of Freight Festival, is an immersive, two-day innovation festival committed to bringing the best and brightest in the freight industry together for collaboration and entertainment in the Silicon Valley of Freight. Choose from a multitude of interactive tracks with experts in data technology, visibility, telematics, supply-chain, SaaS, software, autonomous vehicle systems, and driver engagement to shape and inform the future of freight—all while taking in some of the best music the region has to offer.
More info: freightwaves.com/f3-festival
MARCH 26-28, 2019
Descartes Evolution 2019
Evolution is the premier event that gathers together Descartes customers and business partners from around the world. Network with each other, meet the Descartes product management team, provide input and feedback on Descartes’ product direction, and to learn more about opportunities for improving operations through the growing portfolio of Descartes solutions.
More info: descartes.com/usergroup
APRIL 10-13, 2019
TIA 2019 Capital Ideas Conference & Exhibition
Universal Orlando, FL
TIA gathers over 1300 of the North America’s brokerage-based logistics professionals in one place. At TIA 2019, you will experience the latest industry technology, discuss best practices with your peers, and attend unbeatable 3PS educational sessions. With 10 unique networking activities, you are sure to forge new partnerships and renew old friendships.
MAY 5-7, 2019
Veloctiy 2019 MercuryGate User Conference
Las Vegas, NV
Discover what’s new and next for transportation management at The MercuryGate User Conference – Velocity 2019. MercuryGate will introduce product plans, listen to user feedback, share industry insight, and exchanging new ideas and best practices. Join hundreds of the world’s leading shippers, logistics providers, industry experts, and MercuryGate software experts as they discuss new innovations and take on challenges of today and prepare for tomorrow.
Early-bird pricing ends February 1
More info: velocity.mercurygate.com
MAY 6-8, 2019
Transparency19 is designed to keep you on the cusp of the latest innovations that are transforming freight today. Meet the decision-makers behind the biggest brands and startups who are trailblazing through high-impact technology and solution development across all industry segments, including shippers, carriers, 3PLs, supply chain management, manufacturing and investors. You’ll hear from expert speakers, watch live product demos from emerging and leading freight technology companies, and network with hundreds of your industry peers in a revolutionary format.
More info: freightwaves.com/transparency19
JUNE 10-12, 2019
3PL & Supply Chain Summit, Mastering the Digital Supply Chain
Supply Chain Summit: Atlanta 2019 will address the most important challenges to ensure that you are equipped to transform your supply chain today for tomorrow’s challenges. You will learn forward-thinking strategies to meet short, medium, and long-term goals and strategies for seamless operations, managing costs, and delivering to customer expectations.
More info: events.eft.com/3pl
McLeod Software User Conference
Learn best practices from McLeod customers who share their experience at the annual user conference. Enjoy over 14 hours of networking with 1,000+ attendees and over 300 members of the McLeod software team. Attendees will learn about the latest products and future technologies impacting the future of trucking.
More info: mcleodsoftware.com/user-conference
FTR Transportation Conference 2019
The FTR Transportation Conference is recognized for delivering the most complete and comprehensive outlook on freight transportation in North America. Attendees receive in-depth information from industry leaders on all the surface freight transport modes. FTR brings together all aspects of the freight transportation world into one educational event.
More info: ftrconference.com
In.sight User Conference + Expo 2019
In.sight, hosted by Trimble, offers service providers and fleet operations professionals more than three days of valuable content. Notable speakers and networking opportunities and hands-on experience with new technology solutions to help reach new levels of organizational performance and safety. More than 2,000 industry professionals will attend. This year’s event will feature hundreds of educational sessions, notable speakers, customer awards and extensive networking opportunities.
More info: insightuserconference.com
OCTOBER 5-9, 2019
MCE 2019, ATA Management Conference & Exhibition
San Diego, CA
The American Trucking Associations’ (ATA) Management Conference & Exhibition (MCE) brings together trucking executives from across the country. This is a can’t-miss event of the year that highlights economic, regulatory, and business trends focused on driving the success of fleets today and in the future. Every year, more than 2,500 of trucking’s top decision-makers come to MCE.
More info: mce.trucking.org
DAT User Conference
See the latest and greatest products from DAT, plus hands-on labs filled with tips and tricks that you can take home and put into action immediately. Industry insiders and thought leaders will share their expertise regarding the latest trends and the future of the freight industry, with eye-opening keynotes and sessions designed for anyone in the brokerage industry.
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Nearly 12 million trucks, rail cars, locomotives, and vessels move goods over the transportation network. Commercial transportation requires a great amount of attention to detail, which is just one reason so many professionals have been relying on services from transportation factoring companies and other types of small business factoring. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 30, 60 or 90 days into immediate cash for your small business, and if you feel as though it could be a good fit for your business needs, it’s important to find the right provider for you.
Remember that not all invoice factoring companies offer the same services or programs, so it’s important to find the right company that meets your current needs before signing the contract.
Ask: What’s included in the invoice factoring fee?
It’s easy to assume that the invoice factoring company with the lowest fees wins. But, as an owner-operator, you know that just because something is cheaper, it doesn’t mean it’s better. You have to consider and understand what’s the behind the cost.
Some invoice factoring companies offer promotional discounts or have minimum requirements you have to meet each month to qualify for the lower fee. It’s important that before signing an invoice factoring contract that you read and then re-read your agreement to understand how it’s structured. Like most business contracts, there’s not a lot you can do once you’ve signed it.
Also, ask your factoring company what other back office solutions they help you with. Most factoring companies include additional services included in their fees. So, unlike a bank loan, you’re getting more than just money. You’re getting a team of trained professionals who work with brokers and shippers every day and understand the transportation business. That means that instead of being tied up on calls with brokers asking about payment on a load from three weeks ago, you’ve already been paid on that load, and your factoring company works on your behalf with the broker to make sure it’s paid.
According to a U.S. Bank study, 82 percent of businesses fail because of cash flow problems. Trucking companies can’t afford to be waiting for their money. You can’t afford to wait on payments from multiple brokers who might take 30 to 60 days to pay. Invoice factoring companies make sure that you’re paid and provides additional support with your clients.
Look at the business invoice factoring company’s reviews and overall reputation.
In addition to comparing rates and services, it’s also essential to try to access some direct feedback from satisfied (or not so satisfied) clients. This can give you a more realistic idea of what it’s like to communicate with and conduct business with the provider. If possible, try to find reviews and feedback that’s not directly from the company website — these are more likely to be filtered for positivity.
CAUTION: Not all reviews are going to give you the complete picture. You know as a business owner that public reviews can be misleading or not give all the details of a problem. Also, look at the total amount of reviews. If a company only has a handful of reviews, it may not give you a good sense of the company’s service and professionalism.
Reviews can be helpful, but also ask other drivers in the industry. Those referrals will probably give you a fairer review of their company.
Don’t wait until it’s too late
How big of a deal are late payments? It’s been estimated that if all invoices were paid on time, U.S. small businesses could collectively hire 2.1 million more employees, which would reduce unemployment by 27 percent.
What could you invest in your trucking business if you knew you were going to get paid within one to days instead of waiting a month or more? The right business factoring services can help you with your cash flow that will help your present and future business plans.
If you’re looking for invoice factoring services for your trucking business, contact Triumph Business Capital today. We’ve helped thousands of owner-operators get the money they need for their business. We can help you, too.
If you’re looking for invoice factoring services for your trucking business, contact Triumph Business Capital today. We’ve helped thousands of owner-operators get the money they need for their business. We can help you, too.
Nearly 12 million trucks, rail cars, locomotives, and vessels move goods over the transportation network. Every load has a lot of paperwork – rate confirmations, BOLs, lumpers, detention. You get it. It’s a lot of paper for one load. So how can owner-operators manage all that paperwork, submit your invoices while calling to find the next load or driving to the next pickup?
The freight invoice process can be frustrating for any transportation company. But there’s a solution: freight bill factoring. Investing in invoice factoring services can help make your trucking business more efficient and improve operations for your entire business. Here are just a few ways transportation factoring companies can improve efficiency.
Quick funding and approval process
Invoice factoring is a type of accounts receivable financing that converts outstanding invoices due within 30 to 90 days into immediate cash for your small business. If your transportation company has a sudden change that could cause cash flow problems, freight bill factoring can provide income in as little as 24-48 hours. Getting approved for invoice factoring is a relatively fast process that can be completed in as little as 2 to 3 business days. If you just started your trucking company or you have bad credit or no credit history, invoice factoring for truckers might be the right solution for you.
Money to grow your trucking business
As mentioned, invoice factoring services are intended to provide immediate cash flow to your business. According to the Federal Motor Carrier Safety Administration, approximately 5.9 million commercial motor vehicle drivers operate in the United State. Depending on the size of your company, this cash flow can help you meet your daily expenses and expand your business: new truck, more drivers, etc. Keep in mind that nearly 60 percent of invoices are paid late. Without these types of services available, your business growth could be limited or even stay stagnant as a result of cash flow problems.
Invoice factoring is a service, not just money
It’s important to look at freight bill factoring as more than just immediate money. Most invoice factoring companies charge a small percentage of the total invoice as their fee. But when you sign up with a factoring company, they take over the invoicing and collections for you. Be sure and check to see which factoring companies do or do not charge a fee for invoicing. There are many reputable factoring companies who do not charge an invoicing fee.
As a business owner, you’re getting more than just your money. You’re getting a back-office team to support your business growth. Remember that when you’re considering factoring or securing a line of credit or other types of financing to grow your business.
Taking the time to understand how these services can optimize efficiency, revenue, and growth for your transportation company is the key to making the right financial decisions. For more information about freight bill factoring, contact Triumph Business Capital.
MARCH 5-8, 2019
The Work Truck Show, Green Truck Summit, and Fleet Technical Congress
The must-attend event for the work truck industry. North America’s largest work truck event is your once-a-year chance to see all of the newest industry products.
More info: worktruckshow.com
MARCH 10-13, 2019
TCA (Truckload Carriers Association) Annual Convention
Las Vegas, NV
The premier networking and education event in the truckload industry, TCA’s Annual Convention, will be held March 10-13, 2019 at the Wynn Las Vegas Resort in Las Vegas, NV.
More info: truckload.org/events/annual-convention
MARCH 18-21, 2019
American Trucking Association – TMC Annual Meeting & Transportation Technology Exhibition 2019
The Technology & Maintenance Council (TMC) Annual Meeting & Transportation Technology Exhibition is home to trucking’s leading fleet professionals, vehicle manufacturers, and component suppliers. TMC is North America’s premier technical conference for trucking, and it’s an event you simply must attend to stay current on industry practices.
Deadline to register: February 15, 2019.
More info: tmcannual.trucking.org
MARCH 28-30, 2019
Mid-America Trucking Show (MATS)
The Mid-America Trucking Show is the largest annual heavy-duty trucking event in the world. The industry comes together to see what’s happening in trucking. You will see what’s new in technology, learn from experts, connect with peers, and gain insight into current issues. The Mid-America Trucking Show hosts all major truck, diesel engine and trailer manufacturers and representatives from all facets of the trucking industry from all over the world.
Deadline to pre-register: Feb 28, 2019.
More info: truckingshow.com
APRIL 14-16, 2019
The National Private Truck Council – NPTC Annual Education Management Conference and Exhibition
NPTC’s Annual Conference and Exhibition is the marquee national private truck fleet event of the year! With over 1,250 attendees and 165 exhibitors.
Deadlines: Early bird from Jan 14-Feb 1.
More info: nptc.org
APRIL 15-17, 2019
National Association Fleet Administrators – NAFA 2019 Institute & Expo
I&E is the largest gathering of fleet professionals. Designed for both new and veteran fleet managers to get what they need to succeed. You will network with fleet professionals, experience the latest services and products, receive cutting-edge training that will improve your employer’s bottom line, and hear from prominent speakers.
Deadline: Early Bird by Jan 31, 2019 to save $200.
More info: nafainstitute.org
JULY 11-13, 2019
The Truckers Jamboree is hosted every year at the Iowa 80 Truckstop, I-80 Exit 284, Walcott, Iowa. Since its inception in 1979, the Truckers Jamboree has been celebrating America’s truckers. In 2018, over 42,000 people attended. This event is a great place to learn about trucking. The Truckers Jamboree features antique truck displays, over 175 exhibits, Iowa Pork Chop Cookout, live country music, fireworks and Trucker Olympics.
FREE Admission and FREE parking.
More info: iowa80truckstop.com/trucker-jamboree/
AUGUST 22-24, 2019
GATS – Great American Trucking Show
The Great American Trucking Show is an interactive and all-encompassing public convention of trucking professionals. More than 500 exhibitors meet at GATS, representing truck, trailer, engine, component and parts manufacturers, among many others. GATS exist to create an interactive, energizing environment entirely focused on trucking’s improvement.
FREE if you register online. $10 if you register onsite.
More info: truckshow.com
AUGUST 14-17, 2019
ATA National Truck Driving Championship
The National Truck Driving Championships is a competition of professional truck drivers hosted each year by American Trucking Associations.
The NTDC and affiliated state TDCs are considered the one of the industry’s largest and most effective safety programs. Known to many as the “Super Bowl of Safety,” these annual competitions inspire tens of thousands of drivers to operate accident-free for the right to compete.
More info: trucking.org/Driving_Championships.aspx
SEPTEMBER 15-18, 2019
PeopleNet and TMW – In.sight User Conference
Looking to get more out of your TMS? PeopleNet & TMW Systems bring you a user conference & transportation industry expo to give vision & clarity to drive performance throughout your operation.
Registration opens in the Spring
More info: insightuserconference.com
SEPTEMBER 22-26, 2019
Commercial Vehicle Safety Alliance Annual Conference and Exhibition
The Alliance’s premier meeting, the CVSA Annual Conference and Exhibition, provides the opportunity for government officials, enforcement and industry to gather together to affect meaningful changes to the overall culture of transportation safety throughout Canada, Mexico and the United States.
Registration opens June 2, 2019.
More info: cvsa.org/eventpage/events/cvsa-annual-conference-and-exhibition
SEPTEMBER 30-OCTOBER 2, 2019
Women in Trucking
Join transportation, logistics, and supply chain peers at the Accelerate! Conference & Expo. Discover how gender diversity can have a positive impact on your career and your company’s success. Learn from 60+ Educational Sessions on critical transportation issues and trends, along with perspectives of women in the industry. Network with your peers, providers, and other key transportation stakeholders.
More info: womenintrucking.org/accelerate-conference
OCTOBER 5-9, 2019
MCE 2019, ATA Management Conference & Exhibition
San Diego, CA
The American Trucking Associations’ (ATA) Management Conference & Exhibition (MCE) brings together trucking executives from across the country for the one can’t-miss event of the year that highlights economic, regulatory, and business trends focused on driving the success of fleets today and in the future. Every year, more than 2,500 of trucking’s top decision-makers come to MCE.
More info: mce.trucking.org
OCTOBER 31-NOVEMBER 1, 2019
National Association of Small Trucking Companies Annual Conference
The NASTC’s Annual Conference is dedicated to helping small trucking companies control their costs through managed purchasing, analysis, consultation, and advocacy. The conference levels the competitive playing field, allowing member companies to grow, prosper, and remain a significant force in the transportation industry.
Registration begins February 1, 2019.
More info: nastc.com/nastc-the-national-association-of-small-trucking-companies/annual-conference-2019
As a trucking owner-operator, you know that running a successful business requires you to wear many hats. You’ve got to be thinking about everything from gas mileage to depreciation to cash flow.
The new year is here, and that means this is a good time to look to the year ahead and think about what you can do to make it your most successful year yet. We’ve put together a list of seven tips that can help you thrive as an owner-operator in 2019.
#1: Manage Your Fuel Costs
Regardless of what your truck is carrying, one of your biggest expenses is fuel. The mistake that many owner-operators make is confusing the lowest pump price with the lowest fuel cost. They’re not the same thing.
The reason, as you know, is that you must pay state taxes on the fuel you use as you drive through the state. When you buy gas, the pump price includes the base price per gallon plus that state’s taxes.
To save money on fuel, look for the lowest base prices and plan your fuel purchases to take advantage of them.
#2: Support Your Rates
Creating a budget as an owner-operator means estimating both your fixed and variable costs. You may need to justify your rates to potential clients. For that reason, it’s important to understand the trends both in the trucking industry in general and in your niche in particular.
One thing that can help is getting a handle on fuel prices. The US Department of Energy has a fuel price tracker that you can find here. You can also back up your prices by knowing the going rates for specific lanes and any other influencers that may impact your pricing.
You may even be using tools that already give you this information. DAT, for example, provides for its subscribers the 90-day average on loads, so you have a baseline to go off of when negotiating.
#3: Focus on Fuel-Efficient Driving
There’s a lot of debate among owner-operators about the most efficient way to run a business. One frequent topic of discussion is speed. Is it more efficient to drive fewer hours at a higher speed, or are you better off with a lower speed?
When it comes to fuel efficiency, you’ll get more miles per gallon of fuel if you drive steadily at 60 mph than you would if you took more breaks and drove at 70 mph. For example, if you paid $3.00 per gallon for gas:
- Driving 10,000 miles at 70 mph would yield an mpg of 5 miles and you’d pay $72,000 for fuel; and
- Driving 10,000 miles at 60 mph would yield an mpg of 5.5 miles and you’d pay only $65,000 for fuel.
In other words, you’d keep $7,000 in your pocket that you would have spent on fuel just by driving at a slightly slower speed.
#4: Use the Right Strategy for Buying Trucks
Buying a truck requires understanding the vehicle’s performance, mileage, and other factors. While you can certainly buy a new truck, there are some things that you should keep in mind if you do – and some compelling reasons to consider a used truck instead.
Let’s start with mileage. If you’re talking to a salesperson, remember that it’s in their best interest to paint a rosy picture of the truck’s MPG. It’s your job to have a realistic view of MPG based on:
- The load you’re carrying
- Road conditions
- Engine power
You should be buying a truck based on its efficiency, power and reliability. Don’t allow yourself to get distracted by bells and whistles that add to the price of the truck and take money out of your pocket.
Keep in mind, too, that there are some real benefits to buying used trucks instead of new ones. You already know that buying a new vehicle means taking a big depreciation hit. When you buy used, the previous owner absorbs most of the depreciation.
Matt Douthit, the founder of truck driver career site CDL 101, recommends looking for a truck with about 200,000 miles on it. You should pull the Electronic Control Module (ECM) report to see how the truck has performed in the past.
Whether you buy used or new, it’s essential to do research. Ask other owner-operators about the truck you’re considering and learn as much as you can about its likely performance before you buy it. That way you’ll have the best possible chance of ending up with a truck that’s efficient, reliable – and most importantly – profitable.
#5: Take Advantage of Downtime to Service Your Truck
Trucks require routine maintenance, and one of the biggest mistakes that owner-operators make is waiting until something is wrong before taking their rig into the shop. It’s inevitable that you’ll have some downtime in 2019. Those quiet periods are the ideal time to have your truck checked out and take care of needed repairs and maintenance.
You can also use your downtime to take care of other routine duties like creating and mailing invoices, calling on past due accounts, and tracking your company’s financial progress.
#6: Work Directly with Shippers When Possible
You probably have a list of brokers you work with, but if you’re not working with shippers directly, then you’re missing out on a money-making opportunity. If you can land a few direct clients, you can charge them a price that’s similar to what a broker would charge but keep the entire fee for yourself instead of paying a commission.
It will require a bit of strategic marketing to connect with direct shipping clients, but it can make a big difference in your net profit. It can be especially beneficial to connect with direct shippers if you specialize in a particular niche or type of load, since you’ll have less competition than you would otherwise.
#7: Set Yourself Apart from Other Owner-Operators
Our final piece of advice is to find a way to differentiate yourself from other owner-operators. For example, you might:
- Own a specialty trailer that’s only used for specific types of loads
- Have experience with handling hazardous or niche loads
- Hold special permits that allow you to do work that other owner-operators can’t
If any of these things apply to you, then you can use them to your advantage by seeking jobs that other owner-operators can’t accept. And, if they don’t apply to you, there’s an opportunity to spend part of 2019 doing what you can to buy new equipment, get some continuing education or acquire a specialty permit.
2019 Can Be Your Best Year Yet as a Trucking Owner-Operator
The seven tips we’ve outlined here can help make 2019 your most profitable and successful year to date as an owner-operator.
At Triumph Business Capital, we help thousands of owner-operators with their cash flow every single day. Our team of back office professionals helps support your trucking business by creating and mailing invoices, calling and collection on past due invoices, and giving you the tools to better track your company’s financial progress.
If you’re stuck waiting 30-plus days to get paid and looking for a team to support your business growth, contact Triumph Business Capital today.
Is cash flow an issue for your trucking business? If so, you should consider freight bill factoring. You need funds to pay expenses and grow your business, and you can’t always afford to wait 30, 60, or even 90 days for customers to pay. Fortunately, invoice factoring can help bridge the gap between when you dropped off a load, and when you get paid for it.
To give you a better understanding of freight bill factoring, we’re breaking down everything you need to know, from the application process to the benefits and more.
What is freight bill factoring?
Freight bill factoring (also known as trucking factoring) is an accounts receivable financing solution that helps trucking company owners improve their cash flow. Essentially, you sell your invoices to a third-party factoring company and quickly receive your funds back (minus a small factoring fee) for your load, so you’re able to use it for day-to-day operations. With freight bill factoring, trucking companies can immediately access funds from slow-paying freight bills.
Freight bill factoring is not a business loan. Instead, it’s a form of invoice factoring. Invoice factoring is both a short-term and long-term solution, and it’s a popular option for cash flow management. It’s an advance based on your invoices. With this advance, you’re able to pay your bills and expand your operations without borrowing funds or taking on new debt.
How does freight bill factoring work?
While trucking factoring involves a particular process, it’s actually very quick and simple. First, you’ll deliver your load as usual. After that, you’ll send a copy of your invoice to a factoring service after you confirm that you’ve delivered the load. If the invoice is approved, the factoring company will deposit money directly into your bank account in as little as 24 hours. After you receive payment, the factoring company will work with your client for payment.
Before deciding on an agreement, it’s important to remember that there are different types of factoring programs with different terms and expectations. Make sure you ask about some of the benefits of each program, and how it might affect your business before signing.
Non-recourse factoring ensures that even if your customers are slow to pay, you’ll be able to fill any cash flow gaps. This is because the factoring company assumes responsibility and protects your business from customer insolvency. That means if your customer goes bankrupt, the factoring company will not attempt to collect those unpaid invoices from you.
While non-recourse factoring is a great option for small, independent owner-operators, larger companies will typically use recourse factoring because of their potential reserves to get them through any delays in payment. In a recourse agreement, the factoring company does not offer the same protection in the event your customer goes bankrupt. For that reason, recourse agreements tend to be less expensive, in terms of rate, because the trucking company is assuming the risk of nonpayment from insolvency.
Recourse factoring is a great option if you know your customers will pay in a timely manner.
Recourse and non-recourse factoring have their similarities and differences, so carefully decide which type of factoring will benefit your company.
Invoice factoring helps with fuel advances and fuel cards
While you’re on the road, you may need additional cash to cover costs. This is why, when business owners look for factoring companies, they often search for those that offer fuel advances and discount fuel cards. Once you pick up a load, you can receive money to pay for fuel and other expenses. If you want a fuel advance, all you need to do is send a request that includes rate confirmation and a bill of lading. Once the request is approved, you’ll receive the advance in as fast as one hour.
When a factoring company provides you with a fuel advance, you won’t have to worry about negotiating an advance from a broker or shipper. This way, you can keep your trucks on the road and take on more loads with a predictable amount of money, even if you’re low on funds at first. When you begin to work with a factoring company, you’ll also be eligible for the fuel card program. A card gives drivers fuel rebates at major truck stop pumps across the country.
Some invoice factoring will even let you split your payment across different payment methods. Say you were paid $1,000 for a load. You can choose to get paid $500 to your fuel card and have the other $500 go to your bank account. A fuel card also gives you the flexibility of transferring to a single or multiple bank accounts.
Who can benefit from freight bill factoring?
At times, companies must wait a while for brokers and shippers to pay. Meanwhile, those companies also need to pay for drivers, fuel, repairs, and other expenses as they wait. Freight factoring services are an ideal solution. It’s a convenient, flexible option for trucking companies of all sizes. However, factoring is especially beneficial for startup companies that lack large cash reserves.
Whether you need to cover payroll, hire new drivers, or expand your fleet of trucks, payments from freight bill factoring are ideal. Also, if you need to improve your business credit, factoring is a great way to do so. You can quickly get paid for jobs, allowing you to pay off loans and pay your bills on time.
In addition, if you want to focus on your business and take on additional projects, you should consider factoring. Triumph offers free back office support and collections, so you can turn your attention to booking loads and hauling freight.
What are some of the benefits of factoring?
- The invoice factoring process may be cheaper than traditional loan interest rates. Furthermore, while a cash advance loan may be convenient for your business in the short term, it may not solve your working capital needs over time or grow with you as your business grows.
- There are options for every company’s requirements. There are invoice factoring agreements that have no-minimums, which means you can factor as little or as much as you want.
- You qualify for factoring based on your customers’ credit, not your own. This means that even if you don’t qualify for a loan, you may still qualify for invoice factoring.
- Some companies (like Triumph Business Capital) don’t require long-term contracts; you can factor on a month-to-month basis. But if factoring works for your business, you’re able to continue with it.
- You get a team of back office professionals who will support your trucking company with its invoices, help run credit checks on brokers and collect payments.
How do I qualify for freight bill factoring?
Whether you own a small or large fleet, your trucking business can qualify for invoice factoring. The qualification process is mostly about your customers; if their credit is strong, you’ll likely qualify.
For more information regarding freight factoring services, contact Triumph’s experienced team of professionals. We’re a preferred partner, and a proud member of the International Factoring Association. We always make sure carriers receive payment on time, and we’ll positively maintain your relationships with your customers. Give us a call today!
Owning and managing a freight company isn’t easy. In the course of the day, you may wear many different hats: owner, manager, accountant, marketer, and human resources manager, to name a few. And when you’re juggling so many things, it’s easy to let something important slip through the cracks.
That’s where freight factoring comes in. It’s a financial service that helps streamline cash flow, leaving you free to handle other aspects of your business. But how does freight factoring work? Is it right for your company? Here’s what you need to know.
How Freight Factoring Works
Freight factoring, which is also sometimes called transportation factoring or trucking factoring, may be able to help you get a handle on your business finances and credit. Here’s a quick overview of how freight factoring works.
- You submit a factoring application. Once approved, we will issue a factoring agreement that lays out the specifics of your factoring contract, including your fees.
- We determine the creditworthiness of your customers and approve those that we will factor.
- You send us invoices to be factored. We advance you a percentage of the invoice’s value and work with your client to collect the amount owed.
- Your dedicated account executive will make collection calls as needed to collect your outstanding invoices.
- When the invoice is paid, we deduct our factoring fee, and return any reserves back to you.
The trucking factoring process is very simple. It’s designed to streamline cash flow for transportation companies, allowing them to pay their expenses and grow their businesses.
Are Back Office Solutions Part of Transportation Factoring?
One of the things that you may not know about freight factoring is that factoring companies offer additional back office services. It’s not just a cash advance product. For example, at Triumph Business Capital, we offer:
- Credit checks (including online credit checks)
- Invoicing and collections services
- Online reporting
- Data storage
- Fuel discounts
- Fuel advances
- Free trial to DAT load boards
We have worked with over 20,000 carriers, freight brokers and shippers. We understand the specific challenges associated with operating a trucking company, and we’re here to help.
Is Freight Factoring Right for Your Company?
We work with potential clients to see if freight factoring is right for them. When deciding if freight factoring is right for your business, you should start by asking yourself these questions:
- Do my customers take a long time to pay me?
- Is a lack of cash flow negatively impacting my ability to grow my business?
- Are slow paying customers impacting my ability to pay my vendors on time?
- Do I have issues related to my customers’ creditworthiness?
- Do I know the broker/shipper will pay me before I take a load?
- Am I spending valuable time making collection calls?
If you answered ‘yes’ to any of these questions, then there’s a good chance that factoring some or all of your invoices can help. Your time is valuable. By taking advantage of what factoring can offer in terms of cash flow and back office services, you can spend more time servicing your customers and expanding your business.
Factoring for the transportation industry is a specialized service that is designed to help owner-operators like you maximize their cash flow, reduce delinquencies and grow their businesses. To learn about our factoring services for transportation companies, contact us today for a free assessment.
The holiday season is here, bringing days of celebration and fun. But, for many small business owners in the United States, it also brings some anxiety. How will they keep up with increased holiday orders, pay for inventory, and keep their businesses afloat?
According to the Small Business Administration, there are more than 30 million small businesses in the US as of 2018. As a small business owner, you may struggle with a range of issues at the holidays. Here are three ways that invoice factoring can help you have the holiday season you deserve.
#1: Providing Cash Flow
At Triumph Business Capital, one of our top concerns at the holidays is giving our clients access to the cash flow they need. Your sales may double or even triple at this time of year. To meet the increased demand for your products, you need cash on hand to pay for raw materials, inventory and maybe even employee overtime.
Because we can advance money against your unpaid invoices, invoice factoring can keep the money flowing so you can keep up with those holiday orders. You won’t need to wait weeks (or even longer) to be paid. Each sale you make becomes part of a steady stream of cash that you can use.
#2: Checking Customer Credit
For some small business owners, any order is a good order. But, at the holidays, it’s not uncommon for a big invoice to turn into a huge headache when it proves to be uncollectable when the season ends. And, in some cases, the headache of a collection problem can be warded off by simply checking the customer’s credit before you process their order.
At Triumph Business Capital, our experienced account executives can review a potential customer’s credit for you. Or, you can use our online credit check to check it yourself. If a company has a history of serious delinquency, you can decide not to sell to them – or to sell only on a cash basis to avoid collection issues down the line.
#3: Speeding up Collection of Invoices
Collecting invoices can be a time-consuming and frustrating process for business owners. At the holidays, it can be doubly difficult. It’s hard not to feel like a Grinch when you’re calling to collect money in the middle of the holiday season.
Factoring your invoices gives you access to back office solutions that include professional collection services. At Triumph Business Capital, our professional account executives and their teams will make courteous and timely collection calls on your past due accounts. That way, you can focus on making holiday sales while we handle the rest.
The holiday season should be a time when you can focus on making sales and reaping the rewards of the hard work you’ve done all year. Factoring your invoices allows you to do that with the cash flow and additional services you need.
Ready to find out how Triumph Business Capital can help your small business during the holiday season? Click here to learn more!
It’s been estimated that if all invoices were paid on time, U.S. small businesses could collectively hire 2.1 million more employees, which would reduce unemployment by 27 percent. That’s just one reason why more and more businesses are working with invoice and freight bill factoring services. But before you decide whether this service is right for your financial needs, it’s important to understand the process to avoid making some common mistakes.
Not reading over your invoice factoring services contract thoroughly.
This is a mistake that can lead to discrepancies and overall dissatisfaction. But as is the case with any number of financial services, everything you need to know is clearly laid out in the contract — you just need to take the time to read every word. Otherwise, don’t be surprised if you incur additional fees or other consequences you weren’t aware of. Read every word and have a clear understanding of your contract before making it official with your signature.
Not being upfront with your clients about working with a factoring company
Most clients will have no problem working with a business that uses invoice and freight bill factoring services. After all, it shouldn’t affect any part of the quality of service they receive. You don’t want to keep them in the dark, especially because a factoring company representative will be contacting them about invoices and collections. Simply let them know that a third party will be handling your invoices and collections processes moving forward. You may even be able to provide better and faster service to your clients because you’ve outsourced these time-consuming tasks to another company.
Not considering invoice factoring as a solution to your cash flow problems
Small businesses (defined as businesses with fewer than 500 employees) account for 99.7% of all business in the United States. If your business is one of them, and you frequently have trouble getting your clients to pay their invoices on time, invoice factoring should be among the services you consider.
According to a U.S. Bank study, 82% of businesses that fail do so because of cash flow problems, and invoice factoring is one of the most efficient ways to get immediate and ongoing cash flow for your business without incurring debt.
Ultimately, avoiding these mistakes is the best way to optimize your business’s finances and cash flow. For more information about business invoice factoring, contact Triumph Business Capital.
Invoice factoring is a type of accounts receivable financing that converts outstanding invoices into immediate cash for your small business. There are many different types of invoice factoring, from small business factoring to trucking factoring services. Before you determine whether or not your business could benefit from factoring, it’s important to know the potential benefits to your business. Here are just a few pros and cons to consider when determining whether invoice factoring is right for your business.
1. Immediate cash flow to your business
The main goal of invoice factoring services is to provide immediate cash and income for your business. Nearly 60 percent of invoices are paid late, and without the proper cash flow, your business can seriously suffer to the point of closure. In fact, according to a U.S. Bank study, 82 percent of businesses that fail do so because of cash flow problems. Invoice funding companies can help you avoid falling behind on your expenses by paying you for the work you’ve already completed.
2. More than just a financial solution
Unlike other financing options, invoice factoring provides more than just financial relief. When you work with a factoring company, you also get a team of professionals that provide additional services that support your business. Some of these include: invoicing and collections services, free credit checks, reporting tools and online customer portals with 24/7 access.
So when considering a working capital solution, remember to look at more than just the fees. You need to weigh the potential savings of time and money that working with an invoice factoring company can provide you with their suite of back office services.
3. Flexible cash flow solution
For many businesses, cash flow problems can be a short-term issue. Invoice factoring can help bridge the gaps caused by seasonal lulls or other unforeseen changes in your income.
Most invoice factoring companies offer different programs with different terms and contract lengths depending on your business’ needs. You can go month-to-month or sign up for a full year; some programs even let you pick which invoices you want to factor.
And because invoice factoring is not a loan, you’re not saddled with debt like you would incur with a line of credit.
Consider invoice factoring for your working capital needs
There are no shortage of small business funding options available to companies looking to boost their cash flow. Triumph Business Capital works with thousands of businesses every day by providing the funding and back office support they need to maintain and grow their businesses.
Ultimately, considering these pros and cons is the best way to determine whether or not invoice factoring is right for your business. For more information about invoice factoring services, contact Triumph Business Capital.
We’ve discussed in recent posts how invoice factoring works: it’s a type of accounts receivable financing solution that converts outstanding invoices due within 90 days into immediate cash for your small business. And while many business owners assume that they need good credit to qualify for funding for their business, invoice factoring services can provide a unique and simple cash flow solution, even if you don’t have perfect credit. Here’s what you need to know about getting funding for your small business, even with a not-so-great credit history:
Have Bad Credit?
It can be incredibly tough for business owners with bad credit — or lack of credit — to gain traction, especially as they’re trying to get their businesses off the ground. Keep in mind that small businesses (defined as businesses with fewer than 500 employees) account for almost all business in the United States. Invoice factoring, for many types of small businesses, can help ensure adequate funding while they continue to grow their businesses.
Can Invoice Factoring Services Help Build Credit?
In short, yes. The Wall Street Journal reports that, “The factor advances most of the invoice amount — usually 70% to 90% — after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance.”
To be clear, building credit and establishing a higher score certainly takes time, but invoice factoring services can help build your credit. For example, by partnering with an invoice factoring company, you can pay down existing debts with the immediate cash flow, and you can also pay vendors and other expenses on time.
Plus, many invoice funding companies offer additional financial services, such as free credit checks, free background checks, online reporting with 24-hour access, invoice management and collections and more. Together, these comprehensive solutions can help you get your small business up and running regardless of your credit score.
As a business owner, you need to be proactive in improving your credit score. Working with an invoice factoring company can prevent you from falling behind by giving you immediate cash for work you’ve completed. That means on-time payments, which can, over time, lead to better credit.
Understanding how to establish credit for your business is the key to maximizing potential and growth. For more information about business factoring companies, contact Triumph Business Capital.
Invoice factoring is a type of accounts receivable financing that can help small businesses avoid wait times of up to 90-plus days for customer payments. And while it’s ideal for countless types of small businesses across many industry sectors, it’s particularly popular for freight and trucking companies. Nearly 12 million trucks, rail cars, locomotives, and vessels move goods over the transportation network, and freight factoring services can help an owner-operator or freight broker’s day-to-day business operations in more ways than one. But before you choose a freight factoring company, it’s important to be aware of some common mistakes. Don’t let these mistakes affect your freight factoring decisions.
Not choosing the right type of factoring.
You may not be aware that there are two main different types of factoring: recourse and non-recourse factoring. The key difference between recourse and non-recourse is the amount of risk you’re willing to take on and how likely your clients are to pay.
In a non-recourse agreement, the factoring company takes on the risk and offers credit protection to you when your client fails to pay because they filed for bankruptcy. If you select non-recourse, you’ll have that added peace of mind if one of your clients goes out of business.
Recourse factoring, on the other hand, still provides the same factoring services but does not provide the protection to you in the event that a client goes bankrupt. That means, you’d still be financially and legally responsible for paying the amount back to the factoring company that was advanced to you. For this reason, recourse factoring fees tend to be less than in a non-recourse contract.
The decision between recourse and non-recourse comes down to your personal level of risk and trust that you have that your clients are going to pay on time.
Not choosing the right factoring company.
Choosing the wrong freight factoring services could cause more problems than it solves. According to the Federal Motor Carrier Safety Administration, approximately 5.9 million commercial motor vehicle drivers operate in the United States, and if the company you choose is inefficient or charges too much, you could just be digging yourself into a deeper hole. Make sure to consider all invoice funding companies, and ensure reputability in as many ways as possible. Getting a referral from another company or owner operator is another good way to find the right factoring company.
Some questions to ask:
- How long has the company been in business?
- Do they offer recourse and non-recourse contracts?
- Do I need to factor all of my invoices or can I select which ones I submit?
- Are there monthly minimums?
- Can I go month-to-month or do I have to sign up for long-term agreements right away?
If invoice factoring sounds like the right solution for your business, contact Triumph Business Capital today to speak to one of our representatives about our freight invoice factoring services.
Invoice factoring can go by many names: invoice financing, invoice funding and accounts receivable financing. Different names, but they all help small businesses receive the funds they need without waiting 30, 60 or 90 days to get paid from their customer.
In many cases, invoice factoring services can provide funding in as little as 24-48 hours. Thousands of businesses turn to invoice factoring companies, in large part, because of how easy it is to apply and get approved. But that doesn’t mean that a small business owner should just choose the first factoring company that pops up on a Google search. While most factoring companies offer the same basic service, there can be significant differences in the terms and cost. It’s important to avoid pitfalls that can leave you in a long-term, expensive contract.
Here are the most common mistakes your business should avoid when selecting and working with an invoice factoring company.
1. Not staying organized from the start
It’s important to submit error-free, easy-to-read paperwork. To do that, you have to stay organized. Include every expense as well as an explanation of each charge in your invoices, and proofread everything before sending the documents off. Sending duplicate invoices, sending them to the wrong place or department, or not sending them at all can quickly lead to larger problems down the road, such as becoming unqualified in the application process.
Businesses become, well, busy, so you don’t want to trust yourself to send an invoice later. All too often, waiting leads to forgetting. Keeping track of which documents you need to send and where they should go will save you a headache. Plus, it saves time for both you and the invoice factoring company. Don’t waste time by neglecting applications or filling them out haphazardly. Simply be sure you submit clear paperwork to avoid extra work or additional charges. Here’s a good rule of thumb: send invoices the moment you complete or deliver a project.
Your invoice factoring company will also work with you and provide you resources to help you submit clear and easy-to-read documentation. Remember — if your invoice factoring company can’t read your invoice, it can’t be processed, and you won’t get paid until the paperwork issue is resolved.
2. Failing to familiarize yourself with the factoring company
Borrowers should understand exactly what they’ve agreed to with their factors. What’s the contract length? What does the fine print say? Are there any additional fees your business should know about?
Beware of glossing over any of this information. You should thoroughly read your contract. It might look confusing if you’re not familiar with formal industry terms, but you need to make sure the proposal and the agreement match. You’re still going to be held responsible for everything in the agreement, whether you understand its terms or not. While a commercial factoring company should generally avoid ambiguous language, they should also be happy to explain their policies if you have any questions.
3. Withholding important information
Invoice factoring is a popular choice for businesses because of how quickly you can get signed up and approved. But the best way to guarantee a fast response is to be thorough and honest on your application. If you’re in a hurry, it’s easy to leave sections of your application blank or, worse, submit misinformation.
From the start, factoring companies need to assess your business. In order for them to provide you with the best possible quote, you need to provide them with a complete, detailed application. Failing to include information on your application can delay approval or it can be denied all together.
Be upfront about any previous bankruptcies or tax liens. They won’t automatically disqualify you, but they will come up on a routine credit check, so save time by letting the factoring company know what to expect.
4. Not using technology to speed up the process
Most factoring companies don’t require the original documents to issue payment. That means that your mobile device is probably one of the most important tools you have in getting funded quickly. If you’re away from your desk or on the road, you can easily snap photos of your documents and email them or load them to your factoring company’s client portal. This can help cut down on the delay between submission and funding.
Be sure to ask your factoring company what other technological resources they have to help you better manage your fundings and overall finances. Many provide reporting tools and other alerts and notifications that provide real-time status updates on your paperwork and payments.
5. Limiting your earning potential
Like most businesses, invoice factoring companies benefit from client referrals, and many will even compensate you for them. So just by submitting client referrals, you can gain some extra cash when a new client is funded.
The payment structure and schedule depend on the volume of business you’re referring, so ask your factoring company what type of programs they have for client referrals. With client referrals, you can boost your bottom line, while using invoice factoring to meet your monthly expenses.
Invoice factoring helps you build financial health
While invoice financing can help boost your cash flow, it’s important to remember that it’s one part of a coordinated strategy to maintain your business operations.
Working with an experienced company ensures that the invoice factoring process goes smoothly. Founded in 2004, Triumph Business Capital can help your business manage its capital. Over the years, our invoice funding company has helped over 7,000 small and mid-size businesses with their financial needs.
Freight, trucking, oil and gas, and business factoring services are simply a few of our offerings. If you need to remedy your business’ cash flow issues, we make the process easy. Our team can help you get the cash advances you need on your invoices. Choose us as your commercial factoring company—call today at 866-368-2482, and let us be your partner.
Making it as a small business isn’t easy, no matter your industry. Rarely, can small businesses survive waiting 30+ days for payment, especially when their vendors are calling for their payment.
If you find yourself struggling to manage payroll, rent and other overhead costs while waiting for payment, you have options. Read on to learn about the advantages of small business factoring and find out what it can do for your company.
Get the funds you need immediately
Corporations enjoy constant streams of revenue and vast reserves of capital, so they can generally afford to wait 60 or 90 days for customer payments. That’s a luxury small business owners often can’t afford. An unexpected expense or a poor sales month can make covering your immediate costs difficult or even impossible. Your invoices might have the necessary funds to maintain positive cash flow, but what good is that if you won’t see the money for three months?
That’s where working with a factoring company can provide relief. When you send an invoice to a business factoring company, they’ll provide you with those funds trapped in your invoices, minus the discount of the factoring service . You’ll typically receive your funds within 24 to 48 hours. From there, you can make whatever payments are necessary to keep your small business on the right track. Plus, the invoice factoring company will handle all the paperwork and collections necessary, which means you’ve got one less headache to deal with.
A great option for startups
If your company just got off the ground, you may need cash a little sooner than your customers will be paying up. Without funds from past work, it can feel like you just have to constantly scrape by.
Unanticipated costs might threaten to destabilize your operation before it’s truly begun. Alternatively, you may encounter chances to expand your business and bring in new customers, only to realize you can’t take advantage of these opportunities because your bank account is empty.
Fortunately, a business factoring service can get the cash from your invoices immediately, giving you the funds you need to cover your initial expenses or expand your services. This allows you to get your company on its feet sooner—and you won’t have to saddle yourself with an early loan.
Smarter than a loan
If you’re new to factoring, you may be thinking to yourself, “Why shouldn’t I just get a loan instead?” That’s a good question. In fact, there are two reasons to choose small business factoring over a loan.
The first of these is your credit worthiness. If you don’t have a strong credit history, you may not be able to secure a loan. Even if you do obtain it, the high interest rate will cost you a great deal over time. Should your company go under, your obligation to repay the loan won’t disappear, and you could find yourself in a truly disastrous financial situation.
Second, you don’t pay business factoring companies directly. They instead examine your customers’ credit history to assess the risk of taking on your invoices. Generally, you won’t be turned away because of your past, and you won’t have to take on loans with large interest rates to keep your operations stable.
Even if you do have sufficient credit for a loan, you’ll have to deal with the associated debt and interest rates potentially for years to come. This can be a stressful experience, as well as an expensive one. Plus, taking a loan to stay afloat is a risky venture. If you’re already in a tight situation and trying to address an immediate need, tying yourself to potentially years of repayments may not be the best idea for your business.
Invoice factoring, meanwhile, provides flexibility for small businesses. Depending on your agreement, you can sign up for as little as one month, six months or a year. Because factoring companies offer funding based on your invoices, your risk of owing a large balance at the end of your contract decreases dramatically.
Reduce your risks with factoring
Regardless of what solution you ultimately choose for your business, it’s important to understand the differences, and the overall costs and benefits of each. If a customer doesn’t pay, you may have to repay the business factoring company the amount they advanced you for that invoice. However, there are a few elements that can lessen the potential risk.
First, as mentioned above, the factoring company will investigate your customers’ credit history before agreeing to do business with you. This means that, if you decide to factor your invoices, you can be confident that the factoring company has evaluated the likelihood of getting paid on time. If your regular customers are large, reputable corporations or federal or state governments, you probably don’t have much to worry about.
In other situations, it may be best to invest in non-recourse factoring. When you choose this option, the factoring company takes on more risk on your behalf. The actual terms of the agreement vary. Some companies will only let you off the hook if your customer declares bankruptcy. It’s always important to ask these questions when choosing the right factoring company for your business.
Factoring companies help thousands of businesses get the immediate funding they need. Before choosing a traditional bank loan or working with an invoice factoring company, you should do your research on what makes the most sense for your unique business situation.
Triumph Business Capital specializes in factoring, and we offer business factoring services tailored specifically to small businesses. We’ll work with you to find the best solutions that put cash in your hands, and we take on all the risk when you choose our non-recourse factoring option. With over a hundred experts on staff, we’ve got the knowledge and experience it takes to help small businesses optimize their cash flows. Give us a call today, and let us work with you to set your enterprise up for financial success.
There are nearly 28 million small businesses in the U.S., and in today’s uncertain economic climate, many small businesses struggle to stay afloat as a result of insufficient funds. In fact, according to a U.S. Bank study, 82 percent of businesses that fail do so because of cash flow problems.
For many small businesses, however, invoice factoring can be a viable solution to their cash flow issues. Invoice factoring is a type of accounts receivable financing that converts outstanding invoices into immediate cash for your small business. Before choosing the right invoice factoring service for your business, it’s important to understand the facts. It’s also important to clear up the potential misconceptions about invoice factoring. Here are just a few invoice factoring myths you shouldn’t believe.
Myth 1: Business factoring services are expensive.
The most common misconception about invoice factoring services is – no surprise – related to the cost. Most charge a small percentage of the invoice total to provide your business with the immediate cash flow it needs to help meet your day-to-day expenses.
The reality is that no business can survive for long without a consistent stream of income.
Recent research suggests that nearly 60 percent of all invoices are paid late. Invoice factoring ensures that you’re not waiting for your money or wasting your time chasing down slow-paying clients.
Invoice factoring companies also provide additional services as part of your fee. These services – invoice creation and submission, collections, credit checks on your future clients — can be invaluable resources to busy small business owners who are wearing too many hats. Invoice factoring companies provide a team of back office professionals that keep your paperwork in check and make sure that you’re getting funded on the work you’ve completed.
When considering working capital solutions for your business’s cash flow issues, it’s important to keep in mind the additional benefits included in the factoring services and calculate the overall benefit to your business. Outsourcing your invoicing and collections processes can lead to savings in time and money, allowing you to dedicate more resources to growing your business.
Of course, the exact fee and costs associated with factoring depends on your specific business situation.
Myth 2: My customers will look negatively upon invoice factoring.
Some people think that businesses using invoice factoring might be having financial issues or may not be seen as dependable vendors. More than that, some business owners worry that a third party provider contacting your clients to follow up on payment may be seen as more of a collections service rather than an extension of your accounts receivable department.
But the reality is that thousands and thousands of businesses use this form of accounts receivable financing for their small business funding. Increasingly, invoice factoring is becoming more common across industries, as companies look to streamline their account receivables process.
Some providers can even provide a white label service in order to make it appear as though invoices are sent to and from your business instead of a third party.
Myth 3: Invoice factoring companies won’t work with businesses that aren’t ‘established.’
Whether you just started a company, or you’ve been in business for a long time, if you have an invoice, you can take advantage of business factoring services.
The reality is that most startups don’t have enough credit to qualify for traditional loans and financing. Conversely, invoice factoring looks at the credit history of your clients when deciding to purchase your outstanding invoices.
Finally, it’s important to note that all types of small- and medium-sized businesses can take advantage of invoice factoring services. Also, invoice factoring companies consider a wide range of criteria when reviewing your application and accounts receivables.
The best way to know if factoring is a great short- or long-term fit for your business is to be as straightforward and direct about your financial history and situation as possible.
Myth 4: All invoice factoring companies are the same.
It’s easy to assume that all invoice factoring companies offer the same services, charge the same rates and have the same contract terms. But in selecting a factoring company, it’s important to remember that there can be significant differences among providers.
For instance, depending on your agreement, many factoring companies require you to submit all of your invoices for funding and maintain monthly minimums (or be charged a fee). Not all factoring companies have these policies, so it’s important to ask and to read and then reread your contract to understand what you’re agreeing to and for how long.
Ultimately, it’s important to understand the facts about the services provided by an invoice factoring provider and the services that they provide before you decide on a working capital solution. If you’re ready to move forward or have questions about invoice factoring, contact Triumph Business Capital today for a free rate quote.
When you’re on the road, you need to make sure you can afford to maintain your truck as well as your business. Cash flow is critical to truckers and trucking companies, which is why we have a solution —freight factoring services.
What exactly is freight factoring?
Freight invoice factoring allows trucking companies of all sizes to immediately receive cash from unpaid invoices. With money in hand, companies can pay for materials, employees and overhead costs. While invoice factoring used to be uncommon, it’s quickly become one of the most popular funding methods for trucking companies.
Trucking companies can choose from two types of factoring services —recourse and non-recourse factoring. While many companies offer both, there’s a significant difference between them.
- Non-recourse factoring— Non-recourse factoring contracts protect you in the event that your clients don’t pay the factoring company. If your customers fail to pay their bills, you won’t be held financially responsible. In a non-recourse agreement, the invoice factoring company assumes the risk. The fees will generally be higher for non-recourse factoring, but it’s the better choice for trucking companies that cannot afford to take the risk if a debtor goes out of business.
- Recourse factoring— In a recourse factoring arrangement, your company is ultimately responsible if the debtor does not pay the invoice. The fees associated with a recourse factoring contract are often less because you are sharing in the risk if the debtor fails to pay. To minimize the risk of non-payment from your customers, the invoice factoring company provides credit checks on your debtors (clients), allowing you to make better informed decisions prior to taking the load.
The process of freight factoring
The first step is easy, and you’re already doing it: deliver your load as you normally would. Then, you need to submit a copy of your freight bill, frequently referred to as a BOL (bill of lading), to an invoice factoring company. Most invoice factoring companies accept paperwork by email or FAX.
The best invoice factoring companies also offer the ability to upload paperwork through a web portal. Once received, the factoring company verifies the invoices and works with your customers to collect payment. You receive your money — typically same day — once the factoring company verifies that the load was delivered and to check to see if any fuel advances were taken. If you are on a recourse program, you will receive the agreed upon advance rate within 24 hours from the day the BOL was submitted. Finally, once the invoice is paid by your client, the reserve is released minus your factoring fee.
The benefits of freight factoring
What makes freight invoice factoring appealing is its many advantages over other financial solutions. Factoring is a great financing option because:
- It’s easy to receive financing—Traditional loans and other long-term financing solutions are often harder to get. If you don’t have the best credit, invoice factoring might be the most viable option for you. Your customers are paying the invoice factoring company, so your customer’s credit is typically more relevant than yours.
- Speeds up your operating cash flow—It’s no secret that carriers need to be paid, and they need to be paid what customers owe them. Unfortunately, this can take anywhere between 30 and 90 days. Invoice factoring allows freight brokers to provide advances to trucking companies on the same day. With all the work you’re doing, there’s no reason why there should be a waiting period standing between you and your hard-earned money. In addition to freight factoring services, you may even receive complimentary offerings, such as tire discounts or a fuel discount card from the factoring company with negotiated discounts at many participating retailers.
- You’ll have money to spend on growing your business— Usually, it’s more difficult to take on more jobs if cash flow is tight, but freight invoice factoring alleviates this issue. It’ll be much easier to meet growing demand because you’ll be able to use the cash to hire more drivers or for other day-to-day expenses.
- There’s no debt to repay— Invoice factoring helps you avoid taking on new debt. It isn’t a loan, so there’s no expectation to pay anything back. There are no interest rates or hidden fees—just a small, one-time payment taken from your load.
It’s essential to familiarize yourself with the invoice factoring process and its benefits, but there’s another piece of information you should keep in mind as you decide whether freight invoice factoring is right for you.
The application process for freight factoring services is pretty simple. Most freight factoring services require you to complete an application providing basic information that pertains to your business entity. Invoice factoring companies primarily are looking at the debtor’s credit (not your credit) since it is the debtor who will be paying the invoice.
The application paperwork is fairly straightforward, and factoring companies can approve your application for funding quickly. In fact, it generally takes only two to three days to receive approval.
Why you should use a freight factoring company
Provides you with immediate cash flow.
- We already mentioned the amount of time it may take to process payments, and emergencies can’t wait. This is why you should start out with an invoice factoring company as soon as possible.
Get access to funding even if you have bad or no credit.
- When you’re operating a newer business, you probably haven’t established a line of credit. Invoice factoring provides your business cash flow even if you have limited or poor credit history.
Saves you time and money on collections.
- For one thing, using an invoice factoring company can also help alleviate the stress associated with invoicing and collections. The invoice factoring company handles the general accounting responsibilities, such as collections and accounts receivable paperwork. By handing off your invoices and letting invoice factoring companies manage the back-office work, you can have peace of mind and the time to focus on other tasks.
Provides flexible contract terms.
- Invoice factoring companies offer flexibility. There are no long-term contracts, and you can submit as many unpaid invoices as you’d like. Once you’re approved, you can decide how often you’d like to use invoice factoring services to fund your business. Many invoice factoring providers do not have minimum requirements, meaning you can pick and choose which loads you’d like to factor.
Every business owner knows that there are going to be fluctuations in your business, so it’s important to prepare with the right financing option. You can use a factoring service when you need to, so you won’t be stuck on the road when you need the cash most.
Don’t miss out on opportunities to make money, and don’t let your invoices affect your company’s growth. Work with a partner who will give you a fair, honest and stress-free experience.
When it comes to invoice factoring companies, we stand out from the rest. Triumph Business Capital is dedicated to your unique needs. With over 100 knowledgeable team members, we can help you manage your business, get you the funding for your business and save you time and money.
Triumph Business Capital truly is a preferred source for freight factoring services. We’re able to pay carriers within 24 hours after a load has been delivered. If you want a steady flow of capital to help your business continue to grow, call us today and convert your accounts receivable into cash.
The start of a new year is a great time to take stock of what you want to achieve and what it will take to reach your goals. We wish you great success as an owner-operator in 2018, and offer some practical do’s and don’ts as you rev up for the road ahead.
DON’T: Blame shippers or brokers for your rate, lane or anything else that isn’t working in your world. Rates and loads are driven by fuel costs, supply and demand, among other factors in the trucking industry. Too many drivers and owner-operators mistakenly believe that simply having a number of years of experience in trucking will be enough to be a highly profitable business owner. It takes good business skills, understanding of the trucking industry and logistics, keeping an eye on trends, and smart choices of brokers. If you find a broker or who is honest and certified by the TIA (important!), you have probably found a good broker.
DO: Familiarize yourself with how the industry works and what is currently happening. Use that knowledge to your advantage, and to set realistic expectations. Keep tabs on fuel pricing, supply and demand trends, and other influencers so you are well-informed in discussions with your broker and/or shippers about why you deserve the rate you do, going rates for specific lanes, etc. Be able look at your business and see what causes downturns and what helps conditions improve. You can further enhance key relationships in 2016 through your professionalism: treat everyone well and communicate effectively.
DON’T: Rely on salespeople for an accurate assessment of a truck’s fuel mileage. Their agenda is selling you the truck, and they will say or do what it takes. It’s in their best interests to convince you that a given truck delivers the best fuel mileage so they get the sale and their commission. The truck may get that MPG some of the time, but don’t count on it to be what you get all of the time. Also, don’t buy into the idea that you’ll get better mileage hauling light weights with a high-horsepower engine than with a smaller one. Fuel efficiency will vary based on the engine, load and conditions throughout the year.
DO: Become a fuel-efficient truck driver. Fuel economy plays a huge role in your success as an owner-operator. A single mile to the gallon in fuel economy can make or tank your bottom line. You may have heard other drivers say that you can’t make money if you’re driving just 60 mph, because you’re driving fewer miles each day. But driving 55-60 versus having idle time and driving 70 mph will make a dramatic difference, saving you thousands of dollars in fuel efficiency. At a fuel cost of $3.00 per gallon, let’s assume Driver 1 averages 70 mph for 10,000 miles, and gets 5.0 mpg. Driver 2 averages 60 mph for 10,000 miles, and gets 5.5 mph. At the end of the year, Driver 1 has shelled out $72,000 for fuel while Driver 2 has spent just $65,000, leaving $7,000 more in his pocket.
DON’T: Mistake your gross revenue for profits you can pocket. As an owner-operator, you have a number of expenses that come out of that revenue – fuel, permits, vehicle maintenance, truck payments, insurance, health care and insurance, other operating costs, taxes … Also, don’t assume that your truck warranty will cover all of your maintenance expenses or neglect repairs. It will cost you far less in time, money and headaches to get your rig into the shop when you have downtime than having it towed and out of commission because you got complacent or sidetracked. If you don’t sufficiently plan for the costs of operating your truck and business, you’re going to have a rough ride.
DO: Make sure you understand the costs of operating a truck and trailer and stay prepared financially. Basically, revenue per mile minus cost per mile equals gross revenue. Subtract taxes from that figure and you have your net profit. The Owner-Operator Independent Drivers Association (OOIDA) has a great article to help you calculate your fixed and variable costs per mile, which will help you determine how much money in profit you can make. Basic business accounting and book keeping skills are also very important to see success as an owner-operator. You can even take some online classes from the road to get the fundamentals. Of course, the other way to keep more money in your pocket is to control spending. If you need something, research and buy wisely. For “wants,” think long and hard about whether the immediate gratification will interfere in reaching your longer-term goals.
DON’T: Buy a slick, tricked-out, chromed-to-the-gills truck that will ultimately cost you more money in the long run. Focus on what’s best for your business instead of getting distracted by something shiny on the lot or at truck shows. It’s all about getting from point A to point B and having the most appropriate tool for making money in your business. Don’t treat it like a toy or feel compelled to buy more engine than you really need, because it’s just going to suck down more fuel.
DO: Buy a truck that is reliable. Matt Douthit, the voice of experience behind truck driver career site CDL 101, suggests purchasing a lightly used truck – target about 200,000 miles on the odometer. That way, someone else has taken the big depreciation hit, and all the little kinks are already worked out. You can also pull the Electronic Control Module (ECM) report to see how it’s performed, operating issues and actual fuel efficiency. If you go the used route, check out the warranty carefully. You can’t afford to get stuck with a lemon. Whether buying new or used, absolutely do your homework. If you’re purchasing a new one, see what the various diesel engine manufacturers say about fuel mileage, and ask owner-operators with similar trucks and engines about their experiences. Bottom line, you need a truck you can trust for reliability and longevity with good fuel efficiency and few repairs.
DON’T: Believe that work will always be there, and live and budget as if your costs and revenues will never change. Just because we will always need trucks to haul our goods across the country doesn’t mean we will always have work. You can’t view the road through rose-colored glasses and budget solely based on the best of times. The economy ebbs and flows, and so do our businesses. That’s why it’s important to look at yearlong averages and stand out from the pack.
DO: Work hard, do your job well, make smart decisions and build solid relationships with others who can help you in your career. Networking can connect you to the inside track on the best loads offered by multiple brokers and shippers. It’s also important to find and work your niche – a distinct segment of a market what makes you different from the big guys, gives you a profitable edge and keeps you busy.
For example, if you have a trailer used for hauling something unusual, or requiring special handling or specific permits, you improve your opportunity to make more money. Consider doing something that most people can’t; a business model based on lower freight volumes than will sustain a large company; and odd or niche freight, which pay much more than general freight. What can you focus on that most trucking companies do not do? This will help you better brand and market yourself because you will stand out in a small market, then you can build the business by building your reputation for honesty and reliability.
Let’s Talk About How to Get You Paid.
Take five minutes to learn more about how we help owner/operators increasing their cash flow.
Invoice factoring has been around for thousands of years and can be traced to the 18th century B.C. Babylonian king, Hammurabi. Over the past 10 years, transportation intermediaries are directing more and more of their carrier payments to factoring companies ‐ anecdotally, we hear as much as 80%. At Triumph Business Capital, we’ve processed carrier payments for over 500 freight brokers, and our experience is consistent with those reports.
It starts with economics. Lots of new capital has flooded the commercial finance sector, and many new factoring companies have entered the transportation space. And, why not? The collectability of a freight bill is terrific. As a result of increasing competition, carriers are solicited daily with factoring offers of high advance rates (the percentage of the freight bill advanced at time the invoice is sold or “factored”) coupled with factoring fees that are a fraction of what they were 10 years ago. In fact, factoring fees are typically at or below the same pricing which many brokers charge for quick pay.
The quality of factoring services has improved as well. Many of the top factoring companies offer online credit services, fuel purchase programs, equipment and insurance financing and mobile technology applications. The factoring industry has come a long way, too.
Frequently Asked Questions
Q. What is the difference between recourse and non‐recourse factoring? And, how does it affect me?
A. Recourse means the factoring client is ultimately responsibility for the payment of the invoice. Non‐recourse factoring allows companies to sell their invoices in a style in which the factoring company assumes the credit risks. Often misunderstood, non‐payment for legitimate disputes (such as shortages, claims, late delivery, etc.) remain the responsibility of the client regardless of contract form. The style of a carrier’s factoring contract should have no impact on the freight broker.
Q. What is a Notice of Assignment and do Freight Brokers need to acknowledge them?
A. The Uniform Commercial Code (§ 9‐406) outlines the business and law underlying the invoice factoring industry. The ability to assign payment obligations (accounts) from the
broker (account debtor) to a factor (assignee) was a purposeful and intentional provision that the UCC drafters identified to provide businesses with opportunity to raise working
capital. Remember, the assignment of pay proceeds is separate and distinct from the assignment of services or other responsibilities in a legal contract (i.e., Broker‐Carrier
agreements). Payors cannot restrict the assignment of proceeds and are subject to double‐payment liability if they choose to ignore proper notification. Notice of
Assignments (NOA’s) can be presented by an invoice “stamp”, separate communication (letter) or both. Once you have been “effectively noticed” all payments must go to the
factoring company, whether the invoice has a stamp or not, and regardless of any claims by the carrier whether or not a particular invoice was factored. Never stop sending
payments to the factor until you receive a release letter, which the factoring company should be willing to provide
Q. What makes a Notice of Assignment binding? Is a signature required?
A. The effectiveness of an NOA is a question answered by case law, but the practical guidelines are simply and widely accepted. The account debtor is not required to
acknowledge the NOA with a signature and, even if there was a signature, it might not be clear as to whether the person signing the NOA had the proper authority to do so.
So, you don’t have to sign them – but that doesn’t really matter. Once an account debtor sends payment to the factoring company, it’s broadly understood that they did so based
upon receiving notice. (Why else would you send money to someone other than the carrier who hauled the freight?) If you pay a factoring company one time, then the NOA
is probably effective and you’re most likely bound by its terms. Now, you can refuse to use carriers that work with factoring companies, or even certain factoring companies,
but you can’t ignore a valid NOA once received.
Q. Am I obligated to pay a carrier’s factoring company if we haven’t received a Notice of Assignment.
A. Short answer is No. With more and more “online” or “cash advance” lenders entering the space, this question is more likely to come up than you may realize. A business may
grant a factor or lender a security interest in its accounts receivable, and perfect that security interest by filing a UCC financing statement. Security interests establish priority
among secured creditors, but do not impact payment remittance. It’s all about assignment and your receipt of effective notification of that assignment.
Q. Does the presence of a factoring company restrict our ability to offset future payments for claims?
A. Frankly, there’s a lot of “urban myth” surrounding this subject, but it ultimately depends on the broker‐carrier agreement. UCC § 9‐404 provides the factor (assignee) with certain
protections against claims and defenses – but only to the extent that the contract was silent on those provisions. Generally speaking, the broker’s obligation to the pay the
factor are identical to the contractual obligations for paying the carrier. As a practical (and ethical) matter, the factor is entitled to the same level of communication regarding
claims and setoffs that you would reasonably provide the carrier.
Q. What can be done about factoring companies which report slow payments and delinquencies to credit reporting agencies, regardless of how timely those payments are sent?
A. There are two primary reasons for unfair credit reporting: the U.S. Postal Service and bad factoring companies. Mail times are continuing to deteriorate, and payors using mail
service providers are likely experiencing additional delays. If you’re committed to mailing your payments, utilizing the “Intelligent Bar Code” will reduce USPS time and
processing errors. Alternatively, most reputable factoring companies will accept payment by ACH or wire, particularly if your TMS or accounting system can provide
reasonable instructions for correctly applying those payments.
Q. What about the “bad actors” in the factoring community, who are unreasonable, annoying and difficult to deal with?
A. The International Factoring Association (IFA) is an engaged trade organization which is elevating its constituency through education, best practices and advocacy. Over 450 IFA
members ascribe to a Code of Ethics and the organization actively responds to inquiries and disputes. You can contact the IFA at (800) 563‐1895 or email@example.com.
Let’s talk about how we help
Whether you’re a broker needing to make payments or a carrier looking to get paid, Triumph Business Capital can help you.
Freight brokers pay carriers – that’s what you do. You do it for fuel advances and again when the load’s settled and billed. You pay when it’s due and sometimes you pay quick. You pay by fuel card, by express check, by bank draft, by paper check. And mostly you pay factoring companies – after they call to verify the load, again to check for advances and yet again to collect. You’re ready to pay the trucks who’ve been with you forever, the one that showed last week and the one which may still call back. You pay carriers – but is that what you do best?
New Technology, More Options
Large industrial firms have been outsourcing vendor payments for decades. It’s become a standard practice in medical, hospitality and government contracting. The consistent premise is to operate your business within your business systems, and to have your systems feed payment instructions to payment processors – seamlessly, safely and cost effectively. That’s the goal.
The evolution of technology integrations has also resulted in a proliferation of financial solutions. Some of these solution structures make particular sense in certain industries, not so much in others. Some providers offer credit capacity, others focus only on technology solutions. Just to make things more confusing, the terminology isn’t consistent. But overlooking the labels just a bit, we can identify three general categories of payment processing solutions. For purposes of this road map, let’s call them Dynamic Discounting, Supply Chain Finance and Virtual Card Payments. And, of course, there are combinations of the three, but let’s get started anyway – paying particular attention to what makes sense in for-hire transportation.
The simplest form of payment processing involves an arrangement between a buyer (such as a freight broker) and vendor (carrier) whereby payment for goods or services is made early in return for a reduced price or discount. Dynamic Discounting has been primarily a technology service offer with the following characteristics:
- Transaction unchanged between buyer and vendor
- Servicer may or may not provide credit or liquidity
- When credit is provided, it’s most typically in the form of a loan structure (to buyer)
- Often combined with other tech-based services, such as freight bill auditing
We haven’t seen huge impact of Dynamic Discounting in the trucking space, largely because of the complexity. Most truckers are happy with two payment terms: standard and quick. The market saturation of factoring companies has probably simplified quick pay requirements as well.
Supply Chain Finance
Often called “Reverse Factoring”, the basic premise is that buyers (freight brokers) can become more attractive to their vendors (carriers) by incorporating working capital options from the onset. Unlike traditional factoring, where carriers sell their accounts receivable, reverse factoring is a financing solution initiated by the broker to help its carriers to finance their open accounts more easily and at a lower cost than what would normally or otherwise be available. In Europe, where factoring is more prominent than in the U.S., Supply Chain Finance has become more prevalently adopted than traditional factoring. Characteristics include:
- Cost benefits to both buyer and vendor
- Proactive alternative to “Factor Fatigue”
- Optimal in markets where buyers deal with a large number of small vendors and can rely upon the payment processor to minimize onboarding costs
Our company’s payment processing platform, which we call TriumphPay, is a form of Reverse Factoring or Supply Chain Finance. There are a few other very good products coming to the transportation intermediary market in this style as well. From a broker’s perspective, the quality of the carrier experience, and consequently their rate of adoption, will largely drive the cost saving benefits to be realized.
Virtual Card Payments
Despite several transaction models, this is a style of B2B payment processing that uses a single-use credit card number. Virtual card payments have become extremely popular in certain industries and offer distinctive advantages to buyer, including fraud deterrence and revenue opportunities. However, processing costs are transferred to vendors which has resulted in limited adoption in other industries.
- Highly controlled, buyer-centric process
- High adoption rates in stable and/or contractual vendor communities (i.e., hospitals/medical providers)
- Low adoption rates in markets with high factoring penetration
To be fair, Virtual Cards are a valuable tool to have in your payment processing toolbox. You’ll need to determine whether it’s a platform you lead with or use to supplement other transaction models.
Payment processing options are coming. If the U.S. trucking industry is similar to other markets around the world, it will be coming quickly. But please understand, these are customized solutions that can be tailored to fit your business like a glove. The more time you invest in learning about the various structures, including their relative strengths and weaknesses, the better equipped you’ll be to make these financial products works for you.
Cash is king. You know this as well as anyone else. Without cash, you can find yourself in some pretty uncomfortable situations, like not having enough money for payroll, or making late payments to vendors and bill collectors.
So what can you do to manage your cash flow effectively? Let’s take a look at three quick and easy ways to increase your cash flow—and help you sleep at night.
1. Sell or lease unused assets
You paid good money for your assets and, even if you’re no longer using some of them, it’s time to put that investment to work again. Take an inventory of the assets you’re not currently using and consider selling or leasing them.
How do you shed the assets? Use your industry contacts, such as suppliers, to find buyers or lessees. Also search for websites that specialize in auctions for your industry. For assets with significant value, contact a business broker.
2. Deposit additional cash into interest-earning accounts
This one’s a bit of a no-brainer. Let the banks work for you for a change. Deposit any cash you won’t need for a while into an interest-bearing account so it can grow. Look for an insured account with the highest interest your financial institution offers and let your money sit there.
Here’s a tip: If you’re concerned about locking your funds away in a long-term account like a certificate of deposit, consider a money market account instead. Money market accounts offer greater interest than regular savings accounts, while still giving you access to your funds. After all, cash flow is what you’re after—not more restrictions.
3. Factor your receivables
Invoice factoring is perhaps one of the smartest cash flow solutions out there. In fact, this is how many other small to mid-size businesses manage cash flow effectively.
You may be asking yourself: How does invoice factoring work? Here’s how. Simply send your invoices to a factoring company like Triumph Business Capital and we’ll fund the money straight to your bank account—usually within 24 hours.
Keep in mind that we verify the creditworthiness of your customer. If the customer has a history of missed or late payments, the invoice may not be approved for the financing.
Get paid today
We believe that getting paid shouldn’t be the hardest part of your job.
When you factor your invoices with Triumph, you’ll also gain access to a host of back office solutions. Solutions like free credit checks to make sure your clients have the ability to pay; and collection services to get your money from those who won’t pay.
Ready to get started? Factor your invoices with Triumph Business Capital and get paid today.
It’s not only been days, but weeks—or even months—since you performed work for your client, and you still haven’t received payment. Sound familiar?
As a professional, you need to be paid on time. You’ve got people to support and bills to pay. You may be considering using a debt collector to secure payment from your customer. Or, you may have considered proactively factoring your invoices with a trusted, credible factor. But which one is the smarter option. Are there any hidden implications you should be considering before making your decision?
The answer is yes. There’s actually a huge gap between debt collection and invoice factoring. Think through these three key differences before reaching out to either one.
The primary purpose behind using a debt collector is very different from the reason you’d use invoice factoring. While invoice factoring involves current unpaid invoices—no more than 30 days old—debt collection deals with invoices that are at least 60 days past due.
If you’re still trying to get paid months after you’ve completed the work, it might be time to check in with a debt collection agency.
If you prefer timely payment for your work instead of relegating your receivables to the bad debt file, you’ll want to connect with a reputable invoice factoring company like Triumph Business Capital.
One of the benefits of working with an established and reputable factor like Triumph is that we’ll not only factor your invoices; we’ll also provide a host of back office solutions—including payment services—to ensure that you get paid on time for the work you perform. Welcome to the best of both worlds.
2. Funding timeline
How much longer are you willing to wait to be paid? The difference between how long it takes a debt collector to get funds to you and how quickly an invoice factoring company sends you funds can be a game changer.
You’ll be paid, but only after the collection agency receives payment from your customer. That can take time—if it happens at all. Add an aggressive process that can alienate customers, and you may decide that engaging a debt collection agency just isn’t worth it.
With factoring, you simply sell your invoices at a small discount and get immediate cash for your business. How fast? You get paid before the factoring company receives any money from your customer—usually within 24 hours.
How much are you willing to pay to be paid? In an ideal world, the payment conflict wouldn’t exist. But in today’s environment, unfortunately, you often end up either arm wrestling your customers or throwing up your hands.
When you hire a debt collector, you’ll likely pay a hefty 25% to 30% collection fee—which still beats giving up 100% of an unpaid invoice! But there’s an even better option.
Getting paid shouldn’t be the hardest part of your job. Invoice factoring isn’t free, but weigh its small price against its great advantages: you’ll receive an immediate payment from the factor—usually 70% to 100% of the invoice—followed by any remaining balance (minus a fee) as soon as the factor collects full payment from your customer.
Get paid today
Factor your invoices with Triumph Business Capital to get paid today.
When you factor your invoices with our team, you’ll also get access to a host of back office services like credit checks to make sure your clients can pay, and collection services to get your money from those who won’t.
Ready to get started? Factor your invoices with Triumph Business Capital today.
Let’s face it, money can get in the way of any relationship, whether business or personal. And small or mid-size business owners like you never want to compromise relationships with customers or vendors.
But without the funds to pay your bills on time, how can you avoid damaging your relationship with your vendors? And how can you demand timely payment of your invoices without jeopardizing your relationship with your customers? What’s a small to mid-size business owner to do?
Managing cash flow takes diplomacy—and these three industry secrets.
1. Set up mutually beneficial payment terms
If, for example, a customer refuses to pay an initial deposit, but wants you to work on a large project that won’t be completed for months, you can negotiate progress payments. As you reach the agreed-upon benchmarks, you’ll receive partial payments, at least enough to cover your overhead and project costs. This will keep your contractors and vendors happy.
Your customer will benefit, too, by making smaller periodic payments instead of paying a huge lump sum upon completion, or even a hefty deposit with a large final payment.
2. Pay your bills on time
Another key point is to pay your bills on time—always. Set up automatic payments so you never miss a bill payment. Timely payments go a long way toward improving your credit and your credibility. Vendors and contractors appreciate on-time payments and may even give your account preference over other businesses.
On the other hand, late payments can be a black mark against your business—vendors may not be as willing to work with you, and may stop extending credit or services.
3. Offer discounts for quick payment
Everyone likes to save money! Offer a discount off the top of your invoices if your customers pay within a specified period instead of waiting 30, 60, or 90 days to submit payment. Many will jump at this chance, and your offer will generate good will with them. It’s a win-win for everyone.
Get paid, today
Still struggling to get paid by your customers so you can pay your vendors? Invoice factoring can be an easy and effective way to manage cash flow while maintaining—and even improving—business relationships.
Simply send your invoices to a reputable factor like Triumph Business Capital so you can get paid today. When you factor your invoices with Triumph, you’ll get 70% to 100% of your funds upfront. And as we collect full payment from your customers, we’ll then pay you the remaining balance on your invoices, minus a small fee. In the end, you’ll get the cash you need to pay vendors and creditors quickly.
Since 2004, Triumph Business Capital has helped thousands of small and mid-size businesses manage their cash flow effectively. When you factor your invoices with our team, you’ll also get access to a host of back office services like credit checks and collections: We’ll make sure your customers can pay you, and we’ll get your money from those who won’t.
Ready to get started? Factor your invoices with Triumph Business Capital today.
You’re running a small or mid-size business and that takes money—lots of it. But coming up with the capital you need, when you need it, can often pose significant challenges—like how to meet payroll, pay vendors, upgrade equipment . . . the list goes on and on.
So how do you manage cash flow effectively? Let’s explore some common business cash flow problems and what you can do to turn those problems into productivity and profit.
4 common small business cash flow problems
1. Meeting payroll demands
As a small business owner, you know that payroll can take a large chunk of your budget each and every month, if not every week. At best, many small business owners lose sleep over payroll; at worst, some lose their business entirely.
Bankruptcies in the U.S. increased to 25,227 companies in the second quarter of 2016, from 24,797 companies in the first quarter of 2016. That’s a staggering number of businesses that closed shop in just this year alone.
Perhaps you can still keep your doors open, but just by a crack. You’re struggling every payday to meet the financial demand. You’re bound by the Fair Labor Standards Act (FLSA)—laws that set the minimum wage and establish guidelines regarding overtime—as well as state payday laws outlining when employees must be paid. No matter how much you want to treat your employees fairly, if you can’t meet those requirements, you could be in for it.
An employee who has a payroll grievance, whether about regular pay, overtime, or vacation pay, can submit a complaint against your company to the appropriate state or federal agency.
The result? An investigation by the agency, which may, in turn, lead to financial penalties, the loss of your business license, or a lawsuit against your company. Your business could be liable for back pay, fines, or other financial judgments—not to mention the collateral costs and work disruption associated with such investigations.
2. Maintaining a flawless credit score
Since your credit score plays a key role in the viability of your business, it’s important to keep a watchful eye on this number. At the very least, get a free credit report each year and make sure the information is both correct and current. You can request removal of any negative information after seven years, but don’t forget that you’ll have to wait up to 10 years for a bankruptcy to drop off your report.
If your credit score is less than a perfect, get back on track with these simple steps.
- Pay your bills on time—always. Arrange automatic payments on every debt so you never miss a payment. Timely payments determine up to 35% of your score.
- Keep open all accounts that are in good standing. These older accounts positively influence your length of credit history—about 15% of your score.
- Apply for a credit card—but read the fine print for interest and fee information. Most importantly, only use the card for small charges you can afford to pay back every month.
- Keep a low debt load—carrying more than 25% of your limit will increase your debt-to-income ratio and damage your score. Pay the bill on time and in full each month.
- Don’t apply for more credit accounts than you need. If you must open new lines of credit, don’t try to open them all at once. Prospective lenders will check your credit, which lowers your score, and these pings stay on your record for two years, accounting for 10% of your score.
- If you have a dispute about a debt, be proactive to communicate with the lender. If all else fails, take the issue to small claims court before the debt gets into collections. Avoid lawsuits and judgments, too.
- Review your credit report often, disputing incorrect information. You can get one free report each year, but monitoring its accuracy more often may be worth the cost as you’re rebuilding your credit.
3. Surviving slow-paying customers
You know the drill—you deliver your end of the bargain; you invoice; and then you wait . . . and wait . . . and wait to be paid. All the while, you have overhead costs to cover, vendors clamoring for their money, and employees who need to be paid on time.
Maybe your payment terms are net 15, but your customers insist on their terms—net 30, 60, or even 120. You don’t want to lose their business so you reluctantly agree. Fair? Not at all. And, as you well know, waiting to get paid can have serious financial consequences, like not having enough money to run your day-to-day operations, much less expand your business.
You could, of course, apply for a line of credit or get a loan to help carry you through the month, but will you get approved? And with the piles of paperwork and myriad backup documents required—not to mention the back and forth with the bank—you could be practically out of business before the bank makes a decision, much less actually gives you the funds your business needs. And let’s face it: you simply cannot afford to wait all that time only to be turned down.
4. Avoiding unnecessary debt
“Debt” is a nasty four-letter word to a small or mid-size business. According to the U.S. Small Business Administration (SBA), roughly 50 percent of small businesses fail within their first five years, mostly because of insufficient capital, poor credit arrangements, and—you guessed it—too much debt.
Unfortunately, debt can be accumulated rather quickly when trying to boost cash flow or finance growth. Perhaps a business loan could help, but loans must be repaid—and with interest, which can add up significantly.
Fact is, unnecessary or additional debt can be the first step on the slippery slope toward Chapter 11 bankruptcy or even “Closed!”
Fortunately, you can utilize financing solutions other than bank loans—options such as invoice factoring—that won’t incur that four-letter “D” word or burden your business with additional cash flow hardship.
How to overcome cash flow gaps
With potential hazards lurking around every financial corner, how can a small or mid-sized business overcome cash flow gaps and boost its bottom line in this economy—or any economy?
You could opt for cash flow solutions like alternative lending, but that can prove costly. If your loan is a payday loan, your payment will be withdrawn from your checking account every single day. If the money isn’t in your checking account, you’ll accrue additional fees, increasing the payoff amount and delaying the payoff date—damaging your bottom line by keeping your business in debt and paying exorbitant interest longer than expected.
Merchant cash advance
You could also consider a Merchant Cash Advance, which charges you based on your projected sales. But this, too, can be costly—and risky. If your future sales don’t meet your projections, you could end up repaying more than you actually sell, and at a high interest rate. While invoice factoring offers a genuine cash flow solution by purchasing your existing invoices, a merchant cash advance can actually add to your stress.
Invoice factoring answers each of these financial challenges. Here’s how it works.
You simply sell your invoices, minus a small discount, to a factoring company like Triumph Business Capital. After checking out the creditworthiness of your invoiced customer, the factor advances 70% to 100% of the invoice amount to you as immediate cash for your business.
In a recourse factoring agreement, you’re likely to see 100% advanced, while a transportation company with a non-recourse factoring agreement would likely see a 90% to 97% advanced, and a small business with a general factoring agreement would likely see 70% to 95% advanced. And when you customer pays the invoice, the factor remits the balance, minus a fee, to your business.
So instead of waiting 30 to 120 days—or even longer—to receive your customer’s payment, you get cash in hand within 24 to 48 hours.
Triumph offers both recourse and non-recourse invoice factoring for approved clients. With non-recourse factoring, you’re not liable if your customer doesn’t pay your invoice for credit reasons. Since the factor assumes all risk with non-recourse invoice factoring, your business reduces bad debt while increasing cash flow, even if your customer never pays the invoice.
Here’s why invoice factoring might be right for your business.
Get more cash for immediate needs
Invoice factoring helps relieve payroll pain, giving you ready cash to meet weekly, bi-weekly, or monthly payroll. Need to stock up on supplies? No more waiting for your customers’ payments so you can purchase supplies or pay vendors. How about the rent or mortgage payment? Invoice factoring can take the stress out of meeting all your first-of-the-month commitments.
Get more cash for growth opportunities
With invoice factoring, you can expand operations, hire more staff, or develop a new product line. Your customers’ unpaid invoices no longer hold your business hostage, stifling your progress. And unlike a conventional loan, there’s no limit to the amount of financing with Triumph. The cash you receive for your invoices is unrestricted—you don’t need Triumph’s approval to use it for whatever your business needs.
Get more cash without more debt
Sure, bank loans or lines of credit could shore up your finances. But would your business be approved? How long would that take? And at what cost? Invoice factoring gives your business the cash you need quickly and easily. It doesn’t show up on your balance sheet as debt and your business won’t have to make onerous interest payments. Invoice factoring doesn’t negatively impact your credit score either.
Let Triumph help you boost your bottom line today
We believe that getting paid shouldn’t be the hardest part about your job. Since 2004, Triumph Business Capital has helped over 7,000 small and mid-size businesses in the U.S. manage their cash flow.
As your partner, we’ll factor your invoices so you can get paid today—and make your financial challenges a thing of the past. And in addition to helping you manage cash flow through invoice factoring, we offer a host of other business services through our parent company Triumph Bancorp to help you do what you do best.
Does your business need $1 million or more? Triumph Commercial Finance Business Capital offers asset-based lending (ABL) solutions for small and mid-size businesses. As your company steps up to this next level, Triumph Commercial Finance may be your best option for continued growth.
Defined as a loan or line of credit secured by balance-sheet assets (“collateral”) such as accounts receivable, inventory, etc., ABL typically costs less than invoice factoring. However, its loan underwriting process also has more requirements, including CPA-reviewed or -audited financial statements that reflect favorable earnings and tangible net worth. Additionally, ABL can be more restrictive than invoice factoring.
Triumph Commercial Finance also specializes in equipment financing for the construction, refuse, and transportation industries—so you can upgrade your operations to grow your business or expand your footprint. Loans for purchasing new or used equipment range from $250,000 to $6 million, and loan terms are typically two to five years.
Back office solutions
Invoice factoring at Triumph Business Capital includes a slew of helpful back office solutions like free credit checks, collection services, data storage, and more. It’s our goal to help you reduce overhead costs and simplify your operations.
Take the guesswork out of taking on new clients. Triumph Business Capital offers free credit checks to help you make informed decisions before signing a new contract. And our online portal gives our trucking clients access to freight broker credits that we monitor daily.
After you’ve provided the contracted goods or services, our Account Resolution team will ensure that you receive timely payment. What’s more, Triumph Business Capital provides account management reports online—conveniently available to review at any time—so you can make smart business decisions based on your actual data (ageing reports, collection reports, etc.).
Need insurance at competitive rates? Triumph Insurance Group Business Capital offers a wide range of insurance options for the transportation industry, as well as damage protection for new and used equipment. Get the property and casualty insurance coverage that’s right for you—and at the best price, with affordable payment options.
Let’s get you paid today
Triumph Business Capital is committed to helping small and mid-size businesses manage cash flow and so much more. End late payment worries and slow cash flow problems. Factor your invoices and get paid today with Triumph Business Capital.
Don’t you love that feeling—you know, the one you get when an invoice pays? With invoice factoring, you don’t even have to think about processing invoices, and you can forget about having to wait 30, 60, or 90 days to receive your client’s payment. You can actually get paid today. When calculating the cost of invoice factoring, it’s important to remember the benefits it can provide to small businesses and to always consider your own business situation and goals.
The many benefits of invoice factoring
No more invoices to process, no waiting for clients to pay, and immediate cash in hand—invoice factoring services simplifies your bookkeeping experience and helps you get paid on time every time.
According to the Wall Street Journal, “The factor advances most of the invoice amount—usually 70% to 90%—after checking out the credit-worthiness of the billed customer. When the bill is paid, the factor remits the balance, minus a transaction (or factoring) fee.”
The benefits of invoice factoring are many, but how much does it actually cost? In this article, we’ll explain everything you always wanted to know about invoice factoring.
Non-recourse factoring vs. recourse factoring
With non-recourse factoring, the factor assumes the risk of collecting the debt. That’s a lower-risk option for small companies that can’t absorb the cost of unpaid invoices, but it does cost slightly more than recourse factoring.
Larger corporations often favor recourse factoring because, if a customer fails to pay, they can afford to return the funds they received from selling the uncollectible invoice to the factoring company.
Aside from the cost differential between the two, there are times when the cost differential is not justified by the credit risk being taken.
For example, if you’re selling to WalMart or the Federal Government, the chances of either one not paying because of credit reasons are quite small. Thus, paying a premium for non-recourse starts to look a little less attractive. If you do elect for non-recourse factoring, pay special attention to the Security Agreement that you’ll be required to sign and make sure you ask the factor to specifically go over when you will be covered and when you will not be covered from credit risk.
So how much does invoice factoring cost?
Fees vary from factor to factor, so check with your factor before getting started.
Application/Due Diligence Fee
Some factors charge this fee some do not. Those that do not may recover this upfront expense by increasing the initial financing fees. This fee varies highly from factor to factor and can cost anywhere from zero to thousands of dollars.
The factor retains a percentage of each invoice, typically 1–3%.
Monthly and Termination Fees
Some factors may require that you sell a certain amount of your invoice each month and sign a long-term contract. If the monthly target isn’t met, a minimum monthly fee will be charged. Terminating the contract early can trigger a cancellation fee.
The cost of paying for your invoices in advance can vary anywhere from 1.5–5% of the invoice value each month. This wide disparity is yet another reason to check with your factor before jumping into a relationship.
If your invoices go beyond the 30–45 days covered by the advance discount fee, you can expect an additional charge of 2–3% or more for every 30 days that the receivable is outstanding beyond the original 30 days. Some factors may prorate the fee daily, while others may charge on a 10-day basis.
Triumph’s factoring fee depends on your unique factoring agreement. Our factoring experts considering whether you’ve chosen recourse or non-recourse factoring, the credit quality of your customers, and more. But in general, let’s say you decided to factor $3,000 with a 95% advance rate over a 90-day repurchase period. Meaning, you’d get paid $2,850 within 24 hours of submitting a load, and the final 5%—minus standard factoring fees—after 90 days.
While the scenario we just presented is common, it’s important to remember that your factoring fee will vary depending on the terms of your factoring agreement.
How does Triumph Business Capital compare to other factoring companies?
Now that we’ve broken down the fees, let’s get into specifics. While not all factors are entirely transparent with their pricing, we’re an open book. The last thing we want to do is surprise you with a fee. Here’s how our pricing structure compares to other popular factors you may have heard of.
Other companies charge flat advance rates of 10–15% and $15 per wire, but offers free ACH transactions. Some don’t include a setup fee, but they charge a fee based on the advanced amount.
Triumph Business Capital, on the other hand, works with your business to fit your budget and requirements. Triumph takes into consideration the credit risk associated with your customers, the time it takes them to pay their invoices, and the monthly funding volume we forecast for your business.
Can invoice factoring save you money?
Consider this simple illustration. You decide that invoice factoring is the best option for your business, so you convert your invoices into cash instead of waiting a month or more to get paid.
With immediate cash in hand, you can stop worrying about how you’re going to pay your bills and get on with the growing your business. And when you pay vendors more quickly, you can take advantage of their discount offers, which saves you money. You’ve not only gotten invoice collection off your plate, you’ve paid your bills and saved money in the process—and that’s good business.
Calculate The Cost To You...
Let's take a look. Pricing for both options will vary considerably based on business size and other criteria - so feel free to enter the information most appropriate to you.
Your Effective Annual Interest Rate
Cash Advance Loans109%
Cash Available For Operations
The above calculations incorporate estimated values and are intended for comparative illustration purposes only. Terms and conditions of specific cash advance loan and/or factoring agreements may result in additional margin of error. If, for any reason, you suspect the results are not representative - please contact us directly so that we may address those concerns. Alternatively, the most accurate way to calculate the Annual Percentage Rate for a loan or competitive factoring facility may be to contact the financial service provider directly and request that they perform or confirm the calculations. Thank you.
Get paid today
The hardest part about your job shouldn’t be getting paid. Let Triumph Business Capital help you factor your invoices and get paid today.
Invoice factoring and a bank loan have very little in common—other than the fact that both provide cash to small businesses. Here’s a simple factoring vs. bank loan comparison to help you decide which can work for your business.
With invoice factoring, you simply convert your invoices into immediate cash to cover operating costs without taking on debt. You sell your invoices at a small discount to a factoring company like Triumph Business Capital and get immediate cash for your business.
Worried about your credit? No problem! Invoice factoring is primarily based on the quality of your customers’ credit, not your own credit or business history. While most banking institutions look at the same documentation we do, our focus primarily on the quality of your customers. Don’t let the successes and failures of your business journey stop you from getting paid.
Plus, invoice factoring works fast. You’ll typically receive approval in a few business days. Better yet, there’s no debt to repay, and you have unlimited funding potential.
As long as you have invoices, you have the opportunity to convert them into cash. Even startups are eligible for factoring.
Traditional bank loan
Compare that to a bank loan. You pay principal and interest over time, and the funding potential is capped by the bank. After completing all necessary paperwork, the approval process can take months—and it’s based on your company’s operational and credit history. If you’re a startup, chances are you won’t be approved for bank funding.
Additionally, bank loans and lines of credit often carry what’s called a loan covenant. Essentially they’re conditions in a commercial loan that require you to fulfill certain financial performance requirements. If you don’t meet the covenant requirements, you can default on your loan or line of credit. If your bank representative is nice, they may waive the default and charge an additional waiver fee. In the end, it’ll likely cost you more than you bargained for.
Bank loans or lines of credit also come with restrictions that forbid you from taking certain actions like purchasing or selling assets for your business, incurring additional debt for any reason, and more. Because of restrictions, you’ll often find yourself with the financial resources you need without the freedom to use them to solve your biggest business problems.
While a “line of credit” implies that you’ll be financed for whatever you need up to a certain amount, more often than not, that’s not actually what happens. Your credit line often comes with so many restrictions that it’s often easier to look for the next best option.
Which is best for your business?
If you own a business that has a long history of favorable cash flow and profits, or is well-capitalized, then a bank line of credit might be the right choice. But if you’re a new business—or one that may have had a significant hiccup somewhere along the road—then you should consider invoice factoring.
Invoice factoring gives you immediate cash flow without creating debt on your balance sheet, and it’s virtually an unlimited source of working capital.
While banks require a wide range of collateral and financial statements, often refusing businesses that need additional funding but can’t meet the stringent borrowing requirements to qualify for a new bank loan.
Why Triumph Business Capital?
When considering factoring, it’s important to work with a reputable factor with a strong track record. Triumph Business Capital has provided factoring for over 7,000 small to mid-sized businesses since 2004. We have a long history with the transportation industry—and staffing agencies, government contractors, and small businesses are increasingly seeking us out to help solve their cash flow challenges. Triumph also offers smart Asset Based Lending and Equipment Financing options as well as a discount fuel card program.
Triumph is a proud member of the International Factoring Association (IFA) and strictly adheres to the IFA’s code of ethics. Originally called Advance Business Capital, the company joined Triumph Bancorp Group in 2012. As a financial holding company, Triumph Bancorp, Inc. maintains a diversified line of community banking, commercial finance, and asset management activities. Since day one, our vision has been centered on four core business priorities—delivering value, developing people, demonstrating expertise, and displaying a commitment to enterprise success.
Factor your invoices today
Ready to get started? Let Triumph Business Capital help you factor your invoices—and get you the cash you need when you need it.
What are some of the popular types of short-term funding available to small businesses? How can you fund your business? You’ve got questions; we’ve got answers!
Bootstrapping is a funny word for a smart financial concept. The term comes from the phrase “pulling oneself up by one’s bootstraps.” An individual is said to be bootstrapping when he attempts to found and build a company from personal finances or from the operating revenues of the new company. According to Investopedia, more than 80% of new startup operations receive their funding from the founder’s personal finances.
So where exactly does the bootstrapper get startup funds? A bootstrapper may pull from a savings account, use zero interest credit cards, or leverage personal assets like selling a house or car and cashing in on a 401(k). With bootstrapping, the business is your own—no answering to investors like venture capitalists.
What are the benefits and drawbacks of bootstrapping?
Business owners who utilize bootstrap funding don’t have to worry about diluting ownership between investors. They don’t need to issue equity, and they can focus debt on personal sources. The downside? Unnecessary financial risk is all on the entrepreneur. And bootstrapping may not provide enough investment for the company to become successful at a reasonable rate.
What other companies have used bootstrapping?
If you decide to bootstrap, however, you’ll be in good company. Dell Computers, FaceBook, Apple, The Clorox Company, and The Coca-Cola Company each catapulted to greatness from humble beginnings as a bootstrapped enterprise. To learn more about bootstrapping, Fast Company offers 10 tips for bootstrapping your startup.
2. Friends and family
Of course, you can always tap into friends and family. With business plan in hand, pitch your idea to those closest to you, explaining what you’re selling, what you plan to charge, and how they’ll make money by backing your business.
What are the benefits and drawbacks of tapping into this method?
Be upfront about the risks and put the rules behind the investment in writing. Whether you’re asking for a loan, an investment, or even a gift, remember that each one comes with strings attached. In the case of loans and investments, you will have to pay the money back: you cannot file bankruptcy if the business fails.
Entrepreneur.com offers tips and tactics in Five Tips for Asking Friends and Family for Funding.
3. Loan or Line of Credit
You can also apply for a loan or line of credit. What’s the difference? A loan is a specific amount disbursed to you at once in a lump sum. It has a fixed or variable interest rate, and a fixed repayment term. On the other hand, a line of credit functions much like a credit card. You’re given a maximum amount that you can use over a period of time, and you can borrow against that amount as you need money.
What are the benefits and drawbacks?
Once you’re approved for a line of credit, you can tap into it at any time to access the amount your business needs. You can also use a line of credit as an alternate overdraft protection option on a checking account. Keep in mind, though, that excessive borrowing against a line of credit could get you into financial trouble as surely as continuing to rack up credit card debt.
Want to know more about the benefits and drawbacks of traditional bank loans? We just wrote an article to compare and contrast traditional bank loans and invoice factoring. Read the full article here.
4. Invoice Factoring
Invoice factoring can be a small business owner’s best friend. It’s been around for over 4,000 years, dating back to the time of King Hammurabi of Mesopotamia. In the 1900s, the most popular industries for invoice factoring were the garment and textile industries. Today, the transportation industry, staffing agencies, government contractors, and small businesses are taking full advantage of invoice factoring. The reason? It helps relieve the stress of cash flow and slow-paying clients without adding debt.
How does invoice factoring work?
Here’s how: you sell your invoices at a small discount to a factoring company like Triumph Business Capital and get immediate cash for your business. Since 2004, Triumph Business Capital has provided factoring services for 7,000 small to mid-sized businesses throughout the U.S.—so you can be sure you’re working with a reputable company that has your best interests in mind.
Are there any drawbacks?
Invoice factoring can have higher fees than traditional financing, with fees based on sales volume and factoring agreement. But it’s a small price to pay for welcome relief and cash in hand. Learn more about the Common Risks Involved with Invoice Factoring.
What are the best options for short-term business funding?
Triumph Business Capital offers more than just invoice factoring. If your business has grown to the next level and you’re looking for a larger loan to pay for new equipment or provide additional working capital, Triumph offers smart Asset Based Lending and Equipment Financing options as well as a discount fuel card program.
Let’s Talk About Your Cash Flow
Take five minutes to learn more about how we help owner/operators increasing their cash flow.
It’s a big world out there. We’re talking the world of funding for small- to medium-sized businesses. That’s why we’re giving you a bird’s-eye view of the available options—everything you need to know about funding your business.
You may have heard of it; maybe you know a company or two that use it. But what exactly is invoice factoring?
Invoice factoring can be a welcome relief for a small business or government contractor—or any business owner tired of waiting for their invoices to be paid. You simply sell your invoices at a small discount to a factoring company and get immediate cash for your business. According to the Wall Street Journal, “Now billions of dollars in accounts receivable flow through factors each year.”
Should you consider invoice factoring for your small business?
Here’s what you should know about invoice factoring before diving in. Invoice factoring virtually eliminates cash flow problems. There’s no need to process invoices and wait—and wait—to get paid by your clients. No more putting plans on hold because there’s just not enough money to put them into effect. Or worrying about meeting payroll because you haven’t been paid yet. Non-recourse factoring even reduces bad debt since the factor assumes all risk if the invoice isn’t paid.
Got bad credit? Bank loan application already declined? No worries. Invoice factoring companies look at your credit and business history differently than a bank would. They base the majority of their decision on the quality of your customers’ credit and business history, not your own. The downside? Invoice factoring can have higher fees than traditional financing, but it can be well worth it when you consider its many advantages, including being able to sleep at night.
Whom should you trust?
It’s important, of course, to work with a reputable factoring company like Triumph Business Capital. Since 2004, Triumph has provided factoring for over 7,000 small to mid-sized businesses like yours—from the transportation industry to staffing agencies, government contractors, and other small businesses.
If your business has grown to the next level and you’re looking for a larger loan to pay for new equipment or provide additional working capital, Triumph also offers smart Asset Based Lending, Equipment Financing, and a discount fuel card program.
The U.S. Small Business Administration (SBA) can also help finance your business with a guaranteed loan issued through participating banks and other lenders.
The most popular type of SBA financing is a General Business Loan, otherwise known as a 7(a) Loan. You can use the funds to establish a new business or assist in the acquisition, operation, or expansion of an existing business. The SBA guarantees loans up to $5 million to help small business owners with major investments, like building new facilities or buying land, machinery, and equipment. The SBA also offers loans that help small business owners affected by natural disasters and other kinds of emergencies.
Should you consider an SBA loan for your small business?
If you don’t qualify for a traditional bank loan, the government can help—although you’ll still need to work primarily with a bank. Aside from a low annual percentage rate (APR), you’ll receive funding in less than a month. Also, you’ll have more time to repay an SBA loan. If you use the loan for working capital or daily operations, you’ll have seven years to pay it back. Buying new equipment? You’ll have up to 10 years. If you use the funds for a real estate purchase, the terms go up to 25 years. A longer loan term means a lower interest rate and lower regular payments.
The application process, however, can be daunting. An SBA loan requires good credit and may call for collateral—and the paperwork can be both lengthy and cumbersome. The best way to navigate the process is to work with a bank that has extensive experience with SBA loans. The advantage? Lenders offer flexible terms and low rates since the federal agency guarantees the loans.
You’ve probably seen advertisements for alternative lenders like Kabbage, OnDeck, Lending Club, Prosper, Street Shares, and Deal Struck. Even PayPal has become a major player in the alternative lending space.
Alternative lending is a saving grace for some small businesses—especially if they need cash fast, or if bad credit disqualifies them for traditional lending. Sometimes referred to as “direct lending,” alternative lending provides cash in hand within two to three days on average, with a 12- to 36-month repayment period. And there’s no restriction on how to use the money.
Merchant Cash Advance (MCA)
MCA is an alternative financing source that provides businesses with a lump sum of cash by purchasing a set amount of their future sales. MCA companies debit your business account on a daily basis until the loan is paid in full.
Sound like invoice factoring? Not quite. Merchant cash advances and invoice factoring are both alternatives to traditional financing. Each involves a simple, quick application process with minimum credit requirements, making it easier and faster for small businesses to get approval—but while merchant card advances may seem like an equal option to invoice factoring, there are several catches.
Primarily, if your receivables are inconsistent, you may not have enough cash in the bank everyday that a withdrawal is made. At that point, you’ll overdraft on your account and experience the fees and penalties that follow.
Should you consider merchant cash advance for your small business?
Merchant cash advancements typically involve more risk than invoice factoring. A merchant card advance charges you based on your projected sales, while invoice factoring companies purchase your existing invoices. Since merchant cash advance payments are solely based on a prediction, rather than an actual dollar amount, this means that if your future sales don’t meet your projections, you could end up making large payments, with a much higher interest rate—usually significantly more than invoice factoring.
The larger problem could be that the payments continue for a period beyond your revenue generation. This form of cash advance is typically associated with incredibly high interest rates and should be avoided if at all possible.
Should you consider an alternative lending source for your small business?
The process for applying for alternative lending is fast and often easy. The loan application can be completed entirely online and approved in just a few minutes. Approval rates for alternative lending are much higher (64 percent, as opposed to about 20 percent for big banks, according to Inc.), and you could have your money in a matter of days, rather than weeks or months. Typical lending ranges from $10,000 to $100,000.
But alternative lending can be costly. In fact, the cost of these loans can be significantly more than the annualized rates associated with conventional financing. If your loan is a payday loan, beware. Your payment will be withdrawn from your checking account every single day. If the money isn’t in your checking account, you’ll accrue additional fees, increasing the payoff amount and delaying the payoff date. Another thing to keep in mind—be sure you’re working with the lending company that actually provides the financing, versus dealing with a broker, which leads to substantially more costs.
Heard of microfinancing? It’s the new buzzword in funding circles, yet its concept dates back over 200 years. The first case of microlending, attributed to the Irish Loan Fund system introduced by Jonathan Swift, sought to improve conditions for impoverished Irish citizens.
So what is microfinancing? According to Investopedia, “Microfinancing provides options to customers with limited resources to promote participation in productive activities or to support a small business.” Simply put, it’s a type of banking service for unemployed or low-income individuals or groups who have no other access to financial services. Some microlenders even provide information in the areas of financial literacy, such as understanding interest rates and managing financial risks. Several organizations, including the Small Business Administration, offer microloans to help emerging businesses and underserved individuals get solid financial footing to start and grow their businesses.
The SBA offers microloans of up to $50,000 with a maximum term of six years. Administered through community nonprofits, the loans can be used for working capital or for the purchase of inventory, supplies, furniture, fixtures, machinery, or equipment. You can’t use the funds to pay an existing debt or to buy real estate.
Here’s how SBA microloans work: The SBA makes funds available to specially designated intermediary lenders—nonprofit organizations with experience in lending and technical assistance—including Justine Petersen, Grameen America, and Access to Capital for Entrepreneurs, to name but a few. These intermediaries then make loans to eligible borrowers. But before these lenders consider an application, qualifying for SBA microloan financing may require borrowers to complete specific training or planning—requirements designed to help you launch or expand your business successfully.
Other independent organizations—such as Bentley Microfinance Group, Association for Enterprise Opportunity, Business Center for New Americans, and Opportunity Fund—also provide microloans to the underserved community outside of the SBA model.
Should you consider a microloan for your small business?
A microloan is easier to get than a traditional loan, especially if your credit report is less than perfect or you don’t have a long credit history. If you don’t have a credit score, you can opt for a credit-building loan that lets you establish credit. On the other hand, a microloan usually costs more than a traditional bank loan.
Additional Government Funding Options
The federal government isn’t the only agency that can help your small business get off the ground and grow. Every state and many local governments have economic development agencies dedicated to helping both new and established businesses to grow and succeed. These agencies offer such services as start-up advice; training and resources; financial assistance through loans, grants, and tax-exempt bonds; business location and site selection assistance; and employee recruitment and training assistance.
Some states also provide grants for expanding childcare centers, creating energy-efficient technology, and developing marketing campaigns for tourism. These grants usually require the recipient to match funds or combine the grant with other forms of financing, such as a loan. The amount of available grant money varies, depending on each grantor and the type of business to be funded.
In addition to loans, the SBA also offers grants to nonprofit and educational organizations in many of its counseling and training programs. However, the SBA does not provide grants for starting or expanding a business.
Here’s another way the government can help put dollars into your business. The Small Business Lending Fund (SBLF), enacted into law as part of the Small Business Jobs Act of 2010, provides capital to qualified community banks and community development loan funds (CDLFs) to encourage small business lending.
What does that mean to the small-business owner? Your community bank can be a resource for commercial and industrial loans; owner-occupied nonfarm, nonresidential real estate loans; loans to finance agricultural production and other loans to farmers; and loans secured by farmland.
If you’re in the biomedical space, the National Institutes of Health (NIH) can be another resource for your business. The NIH is the largest public funder of biomedical research in the world, offering funding for many types of grants, contracts, and even programs that help repay loans for researchers.
Should you consider government funding for your small business?
Government funding may come with free technical assistance, including workshops, seminars, or onsite consultations. Sometimes government agencies bring together all the recipients of a particular grant, facilitating peer-to-peer learning. These gatherings often provide grantees with their first introduction to others delivering similar services in the same city—which, in turn, can lead to more potential funding or resource-sharing opportunities.
However, as you’d expect, a great deal of red tape goes hand-in-hand with government funding. We’re talking time-consuming paperwork, meticulous recordkeeping, and demanding reports. And you can anticipate that the agency providing government funds for your program will closely monitor the use of those funds. It’s also possible that the receipt of government dollars will discourage donations from private sources.
It all started in 1997, when a British rock band funded their reunion tour through online donations from fans. Since then, crowdfunding has become a smart option for entrepreneurs and others to raise money, awareness, and support for a business or a project, especially when turned down by traditional lenders.
Through online platforms like Kickstarter, Indiegogo, Fundly, RocketHub, and Fundable, your small business can receive needed funding, with donations ranging from as little as $5 up to $5,000 and more. In exchange, your business offers rewards like T-shirts, tickets to shows, or perhaps a personal call from the founder of the company. The better the reward, the better the chance of donations.
In addition to soliciting donations, you can use the crowdfunding concept to get a loan. The site LendingClub, for example, allows members to directly invest in and borrow from each other, essentially eliminating the banking middleman.
Should you consider crowdfunding for your small business?
According to the research firm Massolution, the estimated fundraising volume for global crowdfunding is a whopping $34 billion. But while there’s money to be had, crowdfunding has its drawbacks as well. If you don’t have a great story to tell or a terrific product to sell, then your crowdfunding bid could fail. Some crowdfunding sites don’t collect money until a fundraiser reaches the goal. If your efforts fall short, you’ve wasted a lot of time, energy, and other resources. And then there’s the risk of getting sued if you fail to deliver your rewards.
VC—venture capital—spells big bucks to some companies. An entrepreneur will seek this type of equity financing when the company’s size, assets, or stage of development precludes more traditional funding sources, such as public markets and banks. Venture capitalists generally invest cash in exchange for shares as well as an active role in the invested company.
Should you consider venture capital for your small business?
Venture capitalists typically focus on young, high-growth companies, invest equity capital rather than debt, offer a longer investment horizon than traditional financing, and actively monitor the companies in their investment portfolios. Lenders like EarlyShares and MicroVentures generally require some equity cushion or security (collateral) before they will lend to a small business.
Venture capital provides businesses a financial cushion, but at what cost? Equity providers have the last call against the company’s assets and require a higher rate of return or return on investment (ROI) than lenders receive. So it’s vitally important to weigh the pros and cons before engaging in a venture capital relationship.
Many startups opt for an angel on their shoulder. Angel investors provide funding for early-stage or startup companies in exchange for an equity ownership interest. Often referred to as a business angel, informal investor, angel funder, private investor, or seed investor, the typical angel invests anywhere from $25,000 to $1.5 million.
How do you find an angel investor? Forbes lists a variety of ways—through other entrepreneurs, lawyers, and accountants; AngelList; crowdfunding sites like Kickstarter and Indiegogo; or through a colleague or friend of an angel.
Check out organizations like CircleUp or Gust that provide online platforms to connect entrepreneurs with angel investors. CircleUp offers the largest online marketplace for investing in innovative consumer and retail companies. Gust connects startups with over 1000 investment groups around the world, resulting in more than $1.8 billion invested in startups to date.
Should you consider angel investment for your small business?
Angels can be a Godsend for a startup and the investment usually comes in the form of a lump sum. However, angel investors expect a high rate of return, often 25 percent or more. And as a major investor, your angel may also feel entitled to some control over your company’s future.
The Bottom Line
At the end of the day, when you’re considering how to fund your business idea, the best option is one that helps you achieve your business objectives with minimal risk or high rates. That often turns out to be invoice factoring with Triumph Business Capital. Triumph believes the hardest part about your job shouldn’t be getting paid. Get paid today.
Have questions about invoice factoring or the options listed above? Please leave us a comment below.
Invoice factoring is a saving grace for many industries, from transportation and staffing to small and mid-size businesses as well as government contractors. In fact, invoice factoring can offer welcome financial relief if you’re just starting a business, have bad credit, can’t get funding from banks, or are at risk of losing your business.
A simple process
Invoice factoring lets you convert your invoices into immediate cash to cover operating costs without taking on debt. You simply perform a service for your customer or deliver a product, and send your invoice to a factoring company like Triumph Business Capital to get paid. You immediately receive payment upon completion of the load or job being invoiced.
The process is simple and virtually seamless. Triumph purchases the invoice. If you’re a recourse client, Triumph takes the factoring fee out, then a small portion of that invoice goes into a reserve account, usually 5 or 10 percent. This “advance rate” of 90 or 95% is released once the invoice is paid.
If you’re in a non-recourse agreement, you receive 100% of invoice minus the factoring fee. Since the factor assumes all risk in this type of agreement, there is no reserve held in the event that an invoice does not pay.
You get money when you need it.
Invoice factoring is fast cash in the bank to help cover day-to-day expenses, restock materials, pay staff—or just about anything you need. The alternative? Wait . . . wait . . . wait . . . and then wait even longer—30 days, 60 days, or more—to get paid by clients. But with fast cash in hand, you can keep loyal customers on longer payment terms.
Your invoice factoring company grows with you.
Compare invoice factoring to a traditional bank loan and there’s no competition. Bad credit? Limited operating history? Loan declined? No problem. Invoice factoring companies base their decision on the quality of your customers’ credit, not your own credit or business history. You get cash based on your invoices, not your company’s net worth.
You might pay higher fees than traditional financing.
Invoice factoring can have higher fees than traditional financing—but it’s a small price to pay for peace of mind. Triumph’s fee takes into account the credit risk associated with your customers and the time it takes them to pay their invoices. In fact, invoice factoring provides cash flow that meets your business where it is today and can grow as your business grows because it’s based on your actual account receivables.
Always transparent, always fair, Triumph Business Capital offers options that match each client’s financing needs without incurring debt.
Your factor may work directly with your customer.
Invoice factoring companies work directly with your customers to collect payments on your invoices. You’ll need to ensure that the factoring company you choose is ethical, fair, and respectful. Triumph Business Capital is a proud member of the International Factoring Association (IFA), and strictly adheres to the IFA’s code of ethics. We ensure a smooth transition for both you and your customers.
Your financing depends on your customer’s credit.
Lastly, recognize that your customer’s bad credit may derail your financing. The factoring company may reject your invoices to any customer that isn’t creditworthy.
Three questions to consider
How do you know if invoice factoring is right for you? Ask yourself these three simple questions.
- Can my problem be fixed by factoring?
- Can I cover the cost of factoring and still make a profit?
- Are my customers creditworthy?
Ready to get started? Learn how Triumph Business Capital can help you factor your invoices—because the hardest part about your job shouldn’t be getting paid.
Many businesses turn to Triumph business capital to get their invoices factored for relief from today’s financial pressures. Faster and easier than a bank loan, getting an invoice factored doesn’t rely on your credit or your years in operation. You simply convert your invoices into immediate cash to cover operating costs without taking on debt.
In some cases, factoring an invoice is the only way a business can get cash quickly. In others, it’s simply the smartest way to get cash today. But what risks are involved when it comes to factoring your invoicesinvoice factoring involve?
1. Can you trust the factor?
In its infancy, a few unprofessional factoring companies charged excessive fees and used deceptive business practices, giving the entire industry a black eye. Now, however, factoring is not only widely accepted; it’s a trusted funding source for businesses across many industries.
Of course, before entering into any business relationship, you should always exercise due diligence. Investigate how long the factor has been in business and find out where its headquarters are located. Check into the background of its management team. Go a step further and ask for referrals from current clients, and then research complaints or lawsuits using web searches, the Better Business Bureau, and your state’s Attorney General’s Office. Remember to trust your gut: if you feel you can’t build trust with the factor, walk away.
As a respected industry leader and a proud member of the International Factoring Association (IFA), Triumph Business Capital strictly adheres to the IFA’s code of ethics. Providing invoice factoring for over 7,000 small to mid-sized businesses since 2004, Triumph Business Capital is backed by the extensive assets of Triumph Bancorp, Inc., a financial holding company that maintains a diversified line of community banking, commercial finance, and asset management activities.
2. What about uncollectible invoices?
Triumph Business Capital offers two kinds of factoring arrangements to handle invoices—recourse and non-recourse. Both eliminate the hassles and headaches of collecting invoices, so you can spend more time growing your business, gaining more opportunities to find new shippers, or taking the next load because you’ve already been paid.
With recourse factoring, you ultimately take the responsibility for the payment of the invoice. If the customer doesn’t pay the debt, then the seller is liable to repay the factoring company. With non-recourse factoring, your company pays slightly higher fees, but takes on a lower risk. The factoring company assumes all the responsibility for collecting the debt. This lower-risk option is better for many small companies that can’t absorb the cost of unpaid invoices.
3. How will the factor communicate with your customers?
Triumph has designed a seamless process for our clients to transition to factor their invoices. To start, we create a lockbox to accept payments in care of your company. Either you create your invoices or we create them for you. In either case, all invoices are stamped by Triumph with a “Notice of Assignment.” Your debtor will know that the invoice has been assigned to Triumph Business Capital as a third-party partner to help you manage your Accounts Receivable financing.
4. Is your customer creditworthy?
Savvy business owners like you know that perfect customers are rare, and even your best customers may be slow to pay your invoices. At some point, your current or future customers may not be able to pay you at all.
That’s why it’s crucial to confirm your customer’s creditworthiness before conducting business with them. But routine credit checks can be a hefty expense for your business. Triumph Business Capital runs customer credit reports all day long—for free. It’s the Triumph advantage.
When you factor your invoices with Triumph Business Capital, we monitor the creditworthiness of your customers at every transaction. By doing so, we reduce the amount of risk you take, directly reducing the amount of invoices that get kicked back after 90 days. Invoice factoring is about reducing your financial risk, after all. Let’s get you paid.
The benefits outweigh the risks
Bottom line—the hardest part about your job shouldn’t be getting paid.
Factoring your invoice provides you with the immediate cash you need to run and expand your business. No more need to process invoices. Worried about your balance sheet? This financing doesn’t show up as debt. Factoring your invoices is easy, fast, and flexible.
Ready to get started? Factor your invoices with Triumph Business Capital today.
It’s a headache and a hassle, and it causes complete confusion—It’s the Net-30 Trap. Does it mean you get paid 30 days from the date on the invoice, 30 days after the client bills their client, or within 30 days of what exactly? Do you get paid at all? What is net 30 anyway?
It’s a power play—and you lose
Fact is, “Payment Terms Net 30” can mean different things to different people—but in most cases, the client wins. In essence, net 30 means you’re extending credit to your client long after you’ve delivered as promised. Fair? I think not.
Chances are, you’ve seen or heard about large companies using their purchasing power to force a supplier to agree to terms that are more favorable to the large company—like a longer period of time to pay or relaxed rules for returning goods. How about the promise of future work to keep you at arm’s length when it’s time to get paid?
If you’re like most trucking or staffing companies, small to mid-size businesses (SMB), or government contractors, you don’t have great cash flow or a big cushion to fall back on. That forces you to finance your customers and accept their net-30 terms, or worse—net 60, or even net 90—leaving you looking like less than a good risk for banks or anyone else checking into your creditworthiness. And with few assets to balance such cash flow challenges, you’re not likely to have leverage to increase credibility and trust.
Three courses of action—and you win
1. Charge interest
One tried-and-true method to help ensure you’re paid—on your terms—is to charge interest if payment isn’t received on time. After all, the threat of interest for late payments is part of our everyday life, from credit cards to loans and even utility bills. In some cases, charging interest may be enough incentive for clients to pay on time.
2. Factor your invoices
Invoice factoring helps take the 30, 60, 90—or never—financial burden off your shoulders, allowing you to pay your bills and staff, stock up on materials, and sleep at night. You simply sell your invoices at a small discount to a factoring company such as Triumph Business Capital, and get immediate cash for your business. Learn more about how invoice factoring works in Invoice Factoring: The Antidote for Net-30, 60, 90, or Never .
3. Walk away
Your last course of action is to be willing to walk away. If the deal looks bad, or too good to be true; if you’re worried about a prospective client’s ability or willingness to pay—walk away before it’s too late. In the short term, taking the job gets you the work; but in the long term, you’d be taking on trouble—big time trouble.
Already stuck in a situation where you’re doing work and still not getting paid? Stop the work; your client will see this and make paying you a priority.
It’s time to get paid
Let’s face it: the hardest part about your job shouldn’t be getting paid. Free your business from the Net-30 Trap and factor your invoices with Triumph Business Capital to get paid, today.
You do the work, deliver the product or service, and wait. And wait. And wonder—will you get paid on time or have to make countless calls to get your money?
Let’s face it. One of the biggest challenges facing small and mid-size businesses (SMB) is getting paid—especially since many companies are increasingly stretching invoice payment from 30 days to 90 days or even longer.
In the meantime, you have employee salaries, vendor payments, and taxes to pay—regardless of whether or not your customer pays you. How, then, do you cover your day-to-day expenses, much less expand your business? You could, of course, apply for a bank loan and cope with its cumbersome paperwork, lengthy process, and restrictive funds limit—not to mention possible rejection. Or your can opt for a more business-friendly way to go—invoice factoring.
What is invoice factoring?
To understand invoice factoring, you have to understand what it is not. Invoice factoring is not debt collection—running after businesses to pay their bills. Nor is it a business loan or line of credit.
You simply convert your invoices into immediate cash to cover operating costs without taking on debt. Invoice factoring helps take the 30, 60, 90—or never—financial burden off your shoulders and, frankly, lets you sleep at night.
Invoice factoring goes by several names—accounts receivable financing, AR factoring, and invoice financing. No matter what you call it, the process is the same: you sell your invoices at a small discount to a factoring company and receive immediate cash for your business. No more need to process invoices. Depending on your agreement, bad debt is also reduced as the factor may assume financial risk if the invoice is not paid. The bottom line—invoice factoring gives you fast access to funds with greater flexibility, minus the bad debt.
Less stress, more cash
You could say that invoice factoring is a stress reliever. It takes the billing and collecting off your plate and transfers it onto the factor’s. It also gives you greater control of your company’s finances by providing the necessary capital when your company needs it. Say goodbye to your customers’ accounts payable procedures or terms, or a traditional bank’s underwriting processes or delays—and your own cash flow problems. How’s that for control?
Another benefit? With fast cash in hand, you can pay vendors more quickly and take advantage of their discount offers, saving you money.
How does invoice factoring work?
Unlike conventional lending methods, invoice factoring is based on the quality of your customers’ credit, not your own credit or business history. You receive cash based on your invoices, not your company’s net worth. That’s welcome relief for start-ups with minimal capital or for businesses experiencing financial challenges or bad credit. Worried about your balance sheet? This financing doesn’t show up as debt.
The factoring process works quickly and easily: you deliver a product or perform a service for your customer and send your invoice to a factoring company like Triumph Business Capital. You immediately receive a cash advance on your invoice from the factor, who then collects full payment from your customer, and pays you the balance of your invoice, minus a fee. After verifying the creditworthiness of your customer, the factor may not accept invoices for a customer that has a history of late or missed payments.
Invoice factoring vs. traditional loan
Still not sold on invoice factoring?
Consider this: bank loan processing can take weeks or longer. In that case, you might as well wait for the customer to pay you. Invoice factoring, on the other hand, is fast. You can be paid within 24 hours. You decide which invoices to factor and when.
Invoice factoring is also more flexible than a bank loan. You aren’t locked into a long repayment period. And the cash you receive for invoices is unrestricted—you can use the funds however you want. Compare that to a business loan that requires the money to be used for specific purposes.
Invoice factoring has been around for over 4,000 years, dating back to the time of King Hammurabi of Mesopotamia.
In the 1900s, the most popular industries for invoice factoring were the garment and textile industries. There was simply no better way to continue to buy raw materials to produce clothing and textiles.
In the 1940s, transportation industries were added to the roster of factoring participants. From the 1960s through the ’80s, rising interest rates and bank regulations made invoice factoring more popular because it didn’t require the same sort of credit checks. Today, small to mid-size businesses finance their working capital by factoring over $1 billion annually.
“Companies of all sizes, with annual revenues from $10,000 to $10 million, continually approach us for invoice factoring,” says Steven Hausman, President of Triumph Business Capital, an industry leader headquartered in Dallas, Texas. “We have provided factoring for over 7,000 small to mid-size businesses since 2004. We have a long track record with the transportation industry. Staffing agencies, government contractors, and small businesses are increasingly seeking us out to help solve their cash flow challenges.”
The difference between recourse and non-recourse factoring
Just as there are varying client needs, there are various types of factoring arrangements. With recourse factoring, the client ultimately takes the responsibility for the payment of the invoice. Larger companies often use lower-cost recourse factoring. If the customer doesn’t pay the debt, then the seller is liable to repay the factoring company.
Non-recourse factoring allows companies to sell their invoices to the factoring company, which then assumes all of the credit risks for the collection of the invoice. Triumph Business Capital employs non-recourse factoring and assumes all the risk of collecting the debt. That’s a lower risk option for small companies that can’t absorb the cost of unpaid invoices, but it does cost slightly more than recourse factoring.
A small price to pay for substantial relief
What will all this convenience cost you? Invoice factoring can have higher fees than traditional financing, with non-recourse factoring fees based on a variety of considerations.
During the application process, Triumph analyzes the credit risk associated with your customers, the time it takes them to pay their invoices, and the monthly funding volume forecast for your business.
Triumph then offers pricing options that match each client’s budget and risk tolerance. As an added benefit, factoring fees are deductible as a business expense.
Why Triumph Business Capital?
Triumph Business Capital is a proud member of the International Factoring Association (IFA), and strictly adheres to the IFA’s code of ethics.
Originally called Advance Business Capital, the company changed its name when it joined Triumph Bancorp, Inc. in 2012. As a financial holding company, Triumph Bancorp, Inc. maintains a diversified line of community banking, commercial finance, and asset management activities. Since day one, the company’s vision has focused on four core business priorities.
- Delivering value
- Developing people
- Demonstrating expertise
- Displaying a commitment to enterprise success
“Many clients have been with us since our early days—testament to the integrity of our service and dedication to their business,” says Hausman. “Our team is professional and courteous. We’re a partner with our clients to help them find success with their customers.”
Triumph customers couldn’t agree more. A senior executive at JP Transport, LLC spoke about Triumph: “I have been beyond impressed with the service from Triumph Business Capital. My payments are processed on time every time. The online submission process is fast and easy. Reports on various payment statistics are helpful. I’ve been contacted by Triumph staff just to check on how things are going. Couldn’t be more satisfied.”
Is invoice factoring right for you?
If you’re often caught in the net-30, -60, -90—or never—battle with customers, let us help you determine if invoice factoring is right for your business. Our answers to the following frequently asked questions may get you one step closer to the cash flow relief and improved client relationships that invoice factoring provides.
Q. How much do I have to factor?
A. You have total control over which invoices you want to factor and when. Keep in mind, though, that once you decide to factor one of your accounts, it’s generally required that you factor all the invoices for that customer in order to reduce payment confusion.
Q. What are the costs?
A. The fees for invoice factoring depend on several items, including your customer’s credit risk, how long they take to pay your invoices, and your monthly funding volume. Always transparent, always fair. In any case, your factoring fees will stay the same throughout your entire contract and are contract determined before we purchase your first invoice.
Q. What if I’ve been rejected for a bank loan? Will a factor reject me?
A. Unlike traditional lending, invoice factoring does not rely solely on your credit. Invoice factoring is based on the quality of your customers’ credit, not your own credit or business history.
Q. Can invoice factoring improve relationships with my customers?
A. Absolutely! First, invoice factoring can help increase your credibility. Here’s how: invoice factoring is a recognized, established method for a company to optimize cash flow. Since banks have tightened credit policies for small businesses and startups, many companies now use factoring instead. A factoring company’s willingness to finance your invoices serves as an endorsement of your business as a solid company and a good risk.
Invoice factoring also allows you to give more attention to your customer’s needs—instead of worrying about their payments. Triumph has a decade of experience and dedicated teams that work closely with you to handle the invoicing and collecting of payments. These courteous professionals partner with you to enhance the relationship you’ve built with your customers.
Transitioning to invoice factoring is seamless. Triumph stamps each invoice with payment instructions known as a Notice of Assignment. It’s a very smooth transition for both you and your customers.
Lastly, invoice factoring helps you keep better track of your invoices. Triumph’s online account management, for instance, provides a full array of client reporting and real-time information. The goal is to keep you totally informed on the status of your customers and accounts—and give you the cash you need, when you need it.
Trucking? Staffing? SMB? Government Contractor? Get paid today!
Any business owner or consultant would readily agree that getting paid shouldn’t be the hardest part of the job. Thanks to factors like Triumph Business Capital, it doesn’t have to be.
Freight factoring lets trucking companies get the show on the road. They can pay drivers, insurance, fuel, and other expenses on time, and never have to turn down another job due to lack of cash in hand.
Staffing companies can relax, knowing that they’ll make payroll on time, every time. Small and mid-size businesses can easily replenish their operating capital and get back in business. Government contractors can have the working capital they need to keep the company going strong, without monthly minimums, long-term requirements, or “risk” contracts.
If large invoices or slow payments are standing in the way of your company’s production and expansion, it’s time to learn how invoice factoring can work for your industry—and how Triumph Business Capital can help you get paid today. Get started now, and leave the net 30, 60, 90—or never—far behind.
On May 5, 2016, many schedule contractors received a notice of the government’s continual examination of compliance to the Trade Agreements Act (TAA). Schedule contractors are required to comply with this act by verifying the country of origin for all of their products.
If you are a government contractor, here are a few tips to help you stay compliant.
Abide by the TAA
The TAA states that the product produced by government contractors needs to be wholly grown, produced, or manufactured in the United States or a designated country. According to the Trade Agreements Act, the product can also be “substantially transformed into a new and different article of commerce in the US or designated country.”
To find a list of designated countries, you can reference The Federal Acquisition Regulation section 25.003. Major countries that don’t make the list are China and India. If you obtain products from multiple countries, each country of origin needs to be noted. Also, if you use suppliers, they need to tell you the country of origin for every item they provide for you.
Compliance standards for product contracts
If you are unsure if your product has been transformed in a way to make it compliant, you can find recent rulings on the Customs Ruling Online Search System (CROSS), a searchable database of rulings by the United States Customs and Border Protection (USCBP). In its role of investigating a product’s TAA compliance, the USCBP determines if the manufacturing process has changed the product’s functions or its traits.
Compliance standards for service contracts
If you are a government contractor providing services, the compliance standards are slightly different. The country of origin is determined by where the company is legally established and not by where the services are performed. So even though your services may be performed in another country, if your company is established in the United States or a designated country, you are compliant.
What this means for you
Schedule holders who receive an official notice have five business days to submit a spreadsheet that verifies the country of origin for each product on the GSA contract.
If schedule contractors discover that they aren’t compliant, they have to complete these three steps.
1. Remove all non-compliant products from the contracts.
2. Update GSA Advantage so that the non-compliant products are erased from the system.
3. Update and submit their price list to the National Schedules Information Center.
To improve your TAA compliance, incorporate the following procedures into your ongoing compliance efforts.
● Keep a record of your manufacturing process. Tracking each step of this process will make it much easier to prove compliance. It will also help you keep in touch with the right people if that manufacturing process changes.
● Verify that suppliers meticulously update their product’s country of origin. If any changes need to be made, be sure to let your GSA Contracts administrator know.
● Remove products that are not TAA-compliant. You can use the modifications clause to remove any products that are not compliant with the TAA.
Federal rules and regulations are ever changing, so it’s important to stay up to date on the government’s requirements for its contractors. One thing that never changes about working with the government is the need for steady cash flow. To learn more about how government contract financing can benefit your company, visit our invoice factoring page.
You took the leap and started a business, but now you lie awake at night feeling like a fraud, like you don’t deserve the success you’ve created.
It’s called imposter syndrome, a term coined in 1978 by two clinical psychologists referring to high-achieving individuals who are unable to internalize their accomplishments. Before you spend another minute telling yourself that your success is just a matter of luck and has nothing to do with your hard work, take a look at these five characteristics that prove you’re a real-deal entrepreneur.
1. You executed an idea
“Good ideas are not adopted automatically. They must be driven into practice with courageous patience.” – Hyman Rickover
Anyone can have an idea. It takes execution to turn that idea into a business. No matter what your business idea is, it’s virtually guaranteed that someone else has—or had—the same idea. It’s the execution of the idea that brings it to fruition and makes it unique and worthwhile.
Just think: there are plenty of social networks, but only one Facebook. There are several search engines, but only one Google. There are many electric vehicles, but only one Tesla. Without proper execution, the greatest ideas die out.
2. You have drive and conviction
“The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.” – Vince Lombardi
Entrepreneurship is not for the faint of heart. Starting a business takes perseverance. All entrepreneurs take financial risks, work long hours, and face setbacks, but you have the drive and conviction to continue to overcome whatever obstacles emerge.
Whether your end goal is to build wealth, achieve a flexible schedule, or leave a legacy, you have the passion and the drive to push through and build your dreams.
3. You don’t let failure stop you
“Failure is success in progress.” – Albert Einstein
Those who are weak lose motivation when things don’t go as planned, but you know that failure is a springboard to growth. Instead of giving up in the face of failure, you use it as an opportunity to reset your perspective, make necessary changes, or have that “aha” moment of inspiration you’ve been waiting for.
In her column for Forbes, writer Alison Coleman interviewed Virgin Group founder Richard Branson. With nearly five decades in business, Branson is known primarily for huge successes—but he’s faced his share of failures, too. He offers this advice for entrepreneurs facing failure: “Failure is a necessary part of business, so it’s incredibly important for all entrepreneurs and business leaders to know when to call it a day, learn from their mistakes, and move on, fast.”
4. You built a top-notch team
“Great things in business are never done by one person. They’re done by a team of people.” – Steve Jobs
As you know, a growing business can’t be built solely by one individual. It requires a team of people with complementary skills. Whether your entire team is on payroll or you rely on a network of consultants and independent contractors, you’ve created a top-notch team that brings new perspectives and specialized knowledge that enhances your business.
5. You invest in yourself
“Investing in yourself is the best thing you can do. Anything that improves your own talents; nobody can tax it or take it away from you. They can run up huge deficits and the dollar can become worth far less. But if you’ve got talent yourself, and you’ve maximized your talent, you’ve got a tremendous asset that can return tenfold.” – Warren Buffett
When most people think of investing, they think of stocks, bonds, commodities, or even investing in the dream of another entrepreneur—but all of these investments rely on someone else to turn a profit.
You’re different because you know that the best investment involves turning your passion into financial success. You’re always open to learning and sharpening your skills. You read books, listen to inspirational podcasts, take seminars or classes, grow your network, and invest in your own health and wellbeing.
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So, fueled by your personal drive and with input from the team you’ve assembled, you’ve followed through on your idea and overcome the obstacles—all while continuing to invest in yourself. Congratulations, entrepreneur, you’re the real deal!
Even real entrepreneurs like you need a quick influx of cash to build on their momentum and continue growing. Learn more about how invoice factoring can help you improve cash flow and be prepared for potential shortfalls.
1.9 million college students are expected to graduate this year and most of them will want to start their career right after they walk across the stage.
By targeting college graduates, your staffing agency can dip into a talent pool that comes to the workforce with fresh, new ideas and a willingness to learn and be trained. It’s important to know who to look for and how to win them over to your client’s company.
So how do you get the best talent out of the Class of 2016? Here are three ways to successfully recruit the best of the best this year.
1. Attend career fairs
Many colleges and universities across the nation host career fairs for their students to meet potential employers. By attending these job fairs, employers can meet a number of top candidates. Also, students who attend career fairs tend to be more serious about their future, so these fairs are often effective places to recruit the best talent.
One way to find the best career fairs is by targeting schools. If you’re seeking graduates with a particular degree, Workforce Locator can help you find the top schools for that major.
Remember to engage with students at the career fair. Many times, representatives stand behind their tables without interacting with students as they pass by. Unless you represent a company that is very well known, many students won’t know about you, what you offer, or how you can jumpstart their career. Step in front of the table and take the initiative to connect with every student who walks by your booth.
2. Appeal to their deeper interests
Millennials have different interests than previous generations when it comes to what they want from their employers. In a recent study, 83% of millennials chose their positions based on employee benefits and 54% took a job based on flexible hours and work schedules.
For most millennials, it’s not just about the money. However, because recent college graduates typically carry a large amount of student debt, many companies are taking steps to help them pay down their loans. For example, starting in July, Pricewaterhouse Coopers’ junior employees will be eligible to receive up to $1,200 per year for up to six years as assistance from the company to pay down college debt.
Recent college graduates are also looking for a company that can provide a career path and development opportunities. They want to know that they are valued and that they will have opportunities to learn the skills they need to move up the career ladder to a more prestigious, high-paying position.
3. Understand that their experience may be limited
Train your recruiters and hiring managers to understand that a recent college graduate’s resume will look different from the resume of candidates with more career experience. Many times, the students have been involved in internships or campus leadership positions, which can mitigate their lack of on-the-job experience.
In a Monster article, Enterprise Rent-A-Car regional recruiting supervisor, Chris Fitzpatrick, commented on how a candidate’s involvement in college can help hiring managers connect the dots.
“Involvement in sports breeds competitiveness. Membership in fraternities, sororities, and other clubs and organizations helps develop leadership skills. Although a communications major may not have learned case studies about risk management, the ability to communicate verbally, nonverbally, and cross culturally is vastly more critical. Soft skills such as communication, work ethic, flexibility, and leadership transcend the college majors and are better identified when an entire picture of a candidate’s college experience is seen.”
You can always teach the skills that recent graduates may lack; so if you see a lot of involvement in college on their resumes, it means they are probably driven and dedicated individuals. Oftentimes a student’s non-career experiences during college will translate into the skills needed to do the job.
According to a recent study conducted by Leadership IQ, “89% of the time a new hire fails, it is for attitudinal reasons, not for technical competence reasons.” If you have a candidate who fits culturally, but lacks teachable skills, that individual might still be the right person for the job.
For more Staffing Tips, stay up-to-date by bookmarking our blog, or follow us on Facebook.
Freight brokers have a lot of responsibilities, from matching shippers and carriers to making sure each piece of cargo gets to the right place. Another essential task in this busy industry is bookkeeping. Freight brokers who don’t prioritize bookkeeping can end up losing money in the long run. Here are seven common bookkeeping mistakes freight brokers make and how to avoid them.
1. Attempting to DIY
In order to save money, many business owners insist on handling the books themselves or delegating the task to an inexperienced employee or family member. While you may initially save time and money, costly errors can result in higher bond premiums, more expensive financing terms, and other unforeseen expenses in the long-run.
Hiring a competent bookkeeper will save you money, because the job will be done quickly and efficiently, with fewer errors.
2. Postponing important tasks
Running any business is hard work. Many freight brokers find themselves too busy doing the day-to-day work to focus on important bookkeeping tasks such as reconciling bank and credit card accounts each month. Reconciling statements helps you catch errors and know how much cash or credit you actually have.
Although postponing this task may be tempting, you should reconcile your bank and credit card statements every month, preferably as soon as each statement is available. That way, you can identify any missing deposits, lost checks, or fraudulent charges and address these problems in a timely manner.
3. Not tracking invoices and receivables
If you’re not properly accounting for receivables, you can’t get paid. Getting paid equals cash, the lifeblood of every business.
Experienced freight brokers know that the delay between when you must pay your carriers and when you receive payment from your customers can strain your cash flow.
If tracking and collecting invoices takes too much time, consider invoice factoring. For a small fee, an invoice factoring company like Triumph Business Capital will purchase your invoices. You’ll get paid immediately without the time and expense of dealing with collections.
4. Ignoring liabilities
When a surety looks at your business financials to underwrite a bond, one of their major considerations is whether you have enough assets to cover your liabilities. Inexperienced bookkeepers sometimes remember to record a liability, but then forget to reverse the liability when the payment is made. This error results in an overstatement of liabilities and an understatement of net income, making your business look less financially stable than it actually is.
You can avoid this type of error by hiring an experienced bookkeeper. It’s also a good idea to have another set of eyes (either an owner or a CPA) review the balance sheet regularly and look for unusual account balances.
5. Miscategorizing expenses
Another common error made by inexperienced bookkeepers is miscategorizing expenses or creating too many expense categories. Most businesses and industries have a fairly standard set of expense categories. Miscategorizing expenses or creating too many categories can be a big red flag, signaling to a surety or loan underwriter that your books are not well prepared.
Set up your accounting software correctly from the start with the help of an experienced bookkeeper or accountant and don’t add new expense categories without careful consideration. If you’re unsure of how to classify an expense, ask your CPA or accountant for guidance.
6. Missing details on invoices
When invoicing your customers, you need to provide sufficient detail on each line item. For example, is the charge a flat fee, or do you invoice per mile, per piece, or by weight? If you include additional charges, such as reimbursement for fees or fuel, you should list these as separate line items. Make sure the charges are properly detailed so there is no confusion.
Including the necessary details on your invoices will prevent pushback from your customers for charges they don’t recognize. Any missing information can cause delays in payment—a headache no business owner needs.
7. Missing out on accounting software functionality
Often, in an effort to get their business running, freight brokers purchase an accounting software package but never take the time to learn how to use it correctly. If you’re outsourcing all your accounting and bookkeeping tasks, this is probably not an issue. On the other hand, if you’re using the software at all, even just to enter checks and run reports, you should take the time to learn all of the available functions.
The right accounting software, when used correctly, can save you time and give you real-time information on the state of your business—information you can use to make important business decisions.
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Want to take one task off your endless to-do list? Learn more about how invoice factoring can put cash in your bank account, while Triumph Business Capital handles the time-consuming task of calling shippers to collect on invoices.
After the first lesson in this series, you now have your social sites all set up and are ready to engage your followers.
People want go where content is fresh, new and relevant. No one likes or follows a page with stale content. With an abundance of ideas on what content to post, how often to post and who you are trying to reach, you do know you want to find killer content for your page.
Creating Engaging Content
You have worked really hard to gain relevant followers. Now you have to keep your audience captivated with interesting content. Content is king in the marketing world, and it doesn’t have to be difficult to create.
Step 1- Create a solid piece of content
Consider this one piece of content your content hub. The majority of your social posts and additional content will come from this one piece. It will take time to create, but it will save you time in the long run. This can be a great blog post, an ebook or whitepaper.
Step 2- Repurpose the Content
Let’s say, for example, you have an informative blog post that you’ve posted to your small business blog. You can repurpose that blog content into the following:
- Videos or even a video series (Hello, YouTube)
- Ebook combining multiple blogs
- Slideshare presentation
- LinkedIn Pulse post
- Multiple Facebook posts
- Pinterest pins
- LinkedIn posts
- Instagram posts
Use your time effectively by doing all you can to develop more content from content you have already created.
Step 3- Test How it Performs
Test how it preforms. If one Facebook post does better than another, why is that? Could it have been the time it was posted? Could it have been that an image is more compelling than a video or vice versa? The more you know about what content performs better, the more you can perfect your content.
You then repeat the cycle now knowing how each piece of content performs with your audience. If videos resonate more, create more videos. If you see an abundance of whitepaper downloads, create more whitepapers. Testing is an important part of your social media success that should not be skipped.
Scheduling and Reporting Tips:
- Schedule out your content using tools like Hootsuite and Buffer to save you time.
- Use link shorteners like Bitly to track who clicks on your links and through what medium.
Engaging Content Tips:
- Every post needs a purpose. Are you looking for link clicks, likes, shares, retweets, comments, etc.? Make sure your content reflects that. For example if you’re looking for comments, ask a question.
- Keep track of Facebook, Twitter and other social medium’s changes. For example, sometimes Facebook will release what pieces of content will hold more weight in the ranking algorithm.
Don’t be afraid to share a blog post more than once. Because of how social media works, your content will probably not reach all of your followers the first time you post it.
In 2009, a trucker named Jason Rivenburg was shot and killed by a man who stole $7 in cash from him. Forced to park in an abandoned gas station when he became tired, Jason became the victim of a brutal crime. Sadly there are other stories similar to this one; it’s not the first time this has happened nor was it the last. It’s been 7 years since the murder of Jason Rivenburg, and even after a law has been passed, can we say that much has been done to address this problem?
According to a recent report from the Federal Highway Administration, 72% of states reported having problems with truck parking. What is causing the problem for the lack of parking? There are a couple of factors that could be playing into this:
• HOS Rules
With the hours of service rules in place, truckers may not be able to find parking when the clock runs out. In an article by Fleet Owner, one trucker said that the closest safe parking to his intended destination was 15 miles away. In traffic, that distance could be up to 45 minutes. Because of HOS rules, this 45 minutes could cause a trucker to go over his or her allotted time. The impact of hours of service rules on truck parking is causing many truckers to park in unsafe areas, like along highways, interstates, exit ramps and abandoned lots.
• Lack of truck stops
The United States went through a recession in 2008. During this time, trucks on the road decreased and many truck stops had more spaces than trucks. A couple of years after, the economy picked back up as well as the number of trucks on the road. However, truck stops haven’t caught up to the demand, creating a lack of safe parking at truck stops.
So what’s the solution?
After the tragedy involving Jason Rivenburg in 2009, legislation occurred to increase available, safe parking for truckers through Jason’s Law. The law was passed in 2012 providing more than $6 million to put toward the construction of safe truck parking.
In 2015, the National Coalition on Truck Parking was created through the Federal Highway Administration to address this shortage. The coalition met in the fall of 2015 after the survey results of Jason’s Law confirmed the lack of safe parking available. During this meeting, the coalition defined some obstacles and opportunities to reaching the ultimate goal.
The United States Department of Transportation conducted a Beyond Traffic study and concluded that by 2040 the amount of freight moving in this country will increase by 45 percent. Therefore, the truck parking issue needs to be addressed way before we get to that point.
Many truck stops are expanding their spaces and giving truckers the option of “reserving” spots. However, this can cost money, and should a trucker have to pay for his or her safety? Another option for truckers is the big box stores that sometimes let truckers park in their parking lots. Many of their parking lots have the ability to hold that amount of weight, because freight is coming in and out constantly, However, not all big box stores have the same policies. While some are welcoming to big rigs, others turn them away. This is not always a viable option, so it can’t be the only solution.
In addition to the coalition formed, Truckers Had Enough has created a video creating more awareness of the truck parking problem.
Ultimately, we can create laws and coalitions, but in the end, we need to prevent more Jason Rivenburg situations; we need a solution.
If you work for a staffing agency, social media can be a powerful tool to help your firm grow by finding the right candidates.
Agencies that aren’t utilizing social media marketing in their strategy are missing valuable opportunities. However, with many platforms available, it can be challenging to determine which are most effective and which are simply a waste of time. In this article, we’ll share five social media tips to increase your staffing opportunities.
1. Understand your target audience
Each social media platform features its own audience. The first step to develop a solid social media strategy is to pinpoint the demographics. Who are your ideal candidates? Focus your efforts on the channels where those individuals will likely be found.
2. Ensure brand credibility and consistency
Another important component of a good social media strategy is branding. Undoubtedly, you will be competing with dozens of other recruiters, all of whom are vying for the same top talent. To grab and keep the attention of potential candidates, your brand must stand out as both credible and consistent. Be sure your agency maintains an active online presence with an image and voice that are consistent across all platforms.
3. Find the right platform
One social media marketing mistake many businesses make—staffing companies included—is trying to spread their resources too thin. Sure, you could be active on multiple social media channels, but that doesn’t mean you have to be. In fact, doing so could have a negative effect. Instead, focus on mastering the top few platforms where you’re most likely to reach your target audience.
4. Make your content searchable
Keywords aren’t just for search engine optimization (SEO). They also make your content easier to find. In fact, search engines rank social media sites so favorably that leveraging the right keywords can increase your results, making locating the right candidates far easier. In the company description, incorporate targeted keywords and links to the agency’s other social media accounts. Keyword-rich “about me” descriptions will enhance your online search ability and visibility. And don’t forget to incorporate relevant hashtags on all posts to better reach your target audience. Hashtags make it easier for your audience to find, follow, and contribute to a conversation.
5. Tap into your current workforce
Successful recruiters have a built-in network of referral opportunities in the candidates they’ve already matched with companies in need. Why not tap into this resource to help spread the word socially about other openings you’re trying to fill? Today’s consumers trust online recommendations just as much as if they’d come from a friend, family member, or colleague; and getting others to share on your behalf provides access to additional networks of potential candidates.
Where to spend your time
Now that you’ve built a strong foundation to support your social media strategy, let’s take a quick look at which platforms tend to be the most beneficial marketing channels for staffing agencies.
- LinkedIn: Advanced search allows you to look for prospects using keywords, job titles, industries, and more.
- Blog Posts: Leverage the power of SEO to help candidates find you and learn about your openings.
- Facebook: Use the new advertising format to target candidates based on a number of variables.
- Twitter: Use keywords to search for qualified candidates.
For more details on recommended social media platforms for recruiters as well as other valuable tips, watch this short video clip.
And be sure to bookmark our Staffing Blog for the best staffing agency resources, professional advice, tips, tricks, and much more.
Whether you realize it or not, at some point in your career you will inevitably face the need to sell something, be it a product or service, or even yourself as a qualified candidate in a job interview. Learning how to effectively close the sale, regardless of what’s at stake, is an important part of being successful in any line of work. For many, it’s also one of the most challenging. Here are a few key points to keep in mind that will help you become more adept at negotiating and sealing the deal in any situation.
Understand your ideal customer…
There’s no one-size-fits-all approach to sales. In fact, it’s something that must be tailored to the audience you’re specifically targeting if it’s going to net you the results you’re after. Having a clear understanding of who your ideal customer is and what their unique needs, wants and pain points are can help you develop a more effective sales pitch. This not only reaches your prospects where they are, but demonstrates why your product or service is something they absolutely must have.
It’s about them, not you…
You may have an amazing product or service that could help people tremendously. The problem is, if you can’t clearly communicate how your offering will specifically benefit your prospects, you’re wasting your time (and theirs). When you sell, focus on your customers’ needs rather than what you believe are the key selling points of your product. What you find great about your product may be different than how others perceive its benefits. As an added bonus, when your sales approach is focused solely on your audience, you’ll naturally begin to build valuable relationships. Because people are more likely to buy from someone that they know and trust, you’ll already be a step ahead of the game.
Use happy customers as sales tools…
You could talk for hours about how awesome your product or service is, but it doesn’t mean nearly as much as when that kind of glowing endorsement comes from an actual customer. In fact, 84% of consumers say they trust recommendations from family, colleagues and friends more than any other resource. Don’t be afraid to ask satisfied clients and customers who have had a positive experience with your brand to give a recommendation for future sales. Reviews and videos can be a strong and powerful tool for effectively closing the sale.
It may seem obvious, but this is the step that many people tend to struggle with the most. If you’ve done your job in identifying your prospects’ needs and aligning the benefits of your product or service with those needs, the final step in asking them to sign on the dotted line shouldn’t be that difficult. What’s the worst that could happen? You’ll get a ‘no’? Overcoming objectives and dealing with rejection is par for the course, and will ultimately make you a stronger negotiator over time.
Successful individuals have one thing in common: the ability to close the sale. It doesn’t matter whether it’s the sale of your latest product, an upgrade on a particular service offering or selling yourself as the ideal candidate for that new job or promotion. The key is understanding the science and psychology behind the sales process and making that work for you. By applying the tactics listed above, you’ll be able to hone your skills and start closing deals with cool confidence and an increasing success rate.
When small businesses have a need for money, the most common next-step is to apply for a loan. What many don’t realize is that they have capital readily available to them in the form of outstanding invoices. In fact, the process of accounts receivable factoring has many favorable benefits over traditional financing methods, particularly in the case of government contracting. Let’s take a look at a few of these benefits and how invoice factoring services might be the ideal solution to your business capital needs.
Dependable Cash Flow
You can’t win a government contract if you don’t have the financial means to fulfill your bid. Don’t miss out on that upcoming RFP due to lack of positive cash-flow to back it up. Government contract financing is fast, easy and cuts out all the red tape involved in getting a loan. You’ll have access to the money you need when you need it, without having to take on additional debt in the process.
Many small businesses feel it’s impossible to compete with larger organizations, particularly when it comes to bidding on government contracts. By working with a reputable invoice factoring company, you can step up to the plate and play ball with the big dogs. Better yet, you can do so with the confidence that comes with knowing you’ve got the funding to back it up.
Hire the Best People
Anyone who has been in business for even a short amount of time knows how important it is to hire a qualified staff of skilled, dedicated workers. Attracting and recruiting top talent is only half the battle. You also have to make sure you’re taking care of their needs so they’ll want to stay onboard for the long-term. Leveraging your outstanding invoices for upfront cash can help ensure that once you’ve landed the right candidates, you won’t lose them due to payroll disruptions or other financial woes.
Think Long Term
One of the biggest factors in successful government contracting is proper preparation ahead of time. You need to know what types of contracts you’re best suited for, how and when to best position your offer, and what bid amount would be most likely to help you come out on top. Having a plan in place for financing is a significant part of this preparation. Plan ahead, research invoice factoring as well as reputable factoring companies now. It will give you assurance that once the bid is won, you are set with your financing needs.
Successful small business professionals value honesty and choosing an invoice factoring company is no exception. Not all providers are created equal, but if you do your homework, you can end up with a partner that provides this high level of transparency. For instance, our government contract financing services do not include any monthly minimums, and there are no hidden fees to worry about. It’s a level of trust that is rare in the factoring industry.
If you’re a small business that’s considering entering the world of government contracting, it’s important to know all of your options ahead of time, including the best way to finance your bids. Invoice factoring can provide the working capital you need to confidently throw your hat into the ring and emerge victorious.
When you search for freight broker training courses on Google, you will inevitably find pages and pages of results. How can you decipher which one is best for your freight brokerage? More importantly, how can you determine which one will provide the best return on your investment? Let’s take a look at a few of the key features to look for when choosing a freight broker training program for your business.
The goal of any freight broker training program is to gain as much knowledge and value as possible in order to grow your freight brokerage. To improve the chances of achieving this goal, you need a training partner that has specific experience in the freight broker industry. For example, the Transportation Intermediaries Association (TIA) training program is backed by over 30 years of experience in the industry. Typically, the longer the company has been in business, the more reliable their training program will be.
Along with extensive experience comes a host of satisfied customers. The reputation of the training provider you choose should be an important factor in determining whether their program is worth the investment. Are there other freight brokers or those in the transportation industry talking about this program? Look for reviews to find out if it’s legitimate. If you’re not careful and don’t do your homework, you could end up with a training program that is sub-par and fails to produce the results you’re after.
Freight brokers often find themselves being pulled in a number of different directions. To accommodate this somewhat chaotic schedule, you need a training program that supports the busy freight broker lifestyle. This may include online classes or courses that can be completed at home. Of course, some people are just naturally more successful attending a physical class. Figure out what best fits your schedule and plan from there.
For most freight brokers who are just getting started, the cost of training is also an important factor. Not only do you need to find a program that will provide quality course material with training options that suit your schedule, but it will also likely need to fit within a particular budget. Companies looking to free up extra capital to fund training may consider freight broker factoring as an option. Simply sell your outstanding accounts receivables to a factoring company, like Triumph, and you could have cash in your pocket the same day. Freight broker factoring is a great alternative to other quick cash options.
As with anything else in business, choosing the freight broker training program that’s best for your freight brokerage is an important step in ensuring a qualified, well-trained staff. Knowing what characteristics to look for – such as the ones listed above – can help take you from overwhelmed to confident when choosing the best freight broker training option for you.
Since 1978, DAT Solutions has been a trusted source of information for transportation professionals, providing valuable data on important topics like supply and demand trends, forecasting, benchmarking and capacity planning, which is vital for achieving operational efficiency. As part of our commitment to serve the trucking industry and our valued clients, Triumph Business Capital has had an exclusive factoring partnership with DAT since 2013.
Through this partnership, our clients can enjoy free trials on two different DAT freight matching services – 30 days free on TruckersEdge and 15 days free on DAT Express. All DAT load matching services offer full technology integration with our own proprietary Online Broker Credit program. This provides valuable insight into which loads are factorable while searching for your next load to haul.
In the past, truckers struggled with mustering up the time and resources it took to identify which loads are factorable through their factoring company. By the time you received credit approval, the load could be gone. That’s why this partnership between Triumph and DAT is so beneficial. With the seamless interface, you can search for loads and see which ones are credit-approved – all at the same time. The green check on the DAT Load Boards indicates a factorable load through Triumph Business Capital. It’s that simple!
Freight factoring provides a number of benefits to those in the trucking industry, the most obvious of which is improved cash flow. By selling your outstanding accounts receivable balances, you can gain quick and easy access to much-needed capital without having to rely on loans or other complicated financing options. And because invoice factoring doesn’t involve ongoing debt payments or interest charges, your company will experience reduced risk. Freight factoring is built to last through the various seasons of your business’ life.
What could your trucking company do with better cash flow? Pay your drivers on time, stay up to date on insurance, pay for fuel and much more. Truck factoring can even help you work toward an aggressive growth strategy. Whatever your unique business needs, freight factoring can provide the funding you need to achieve your goals and objectives. And with this exclusive DAT partnership, doing so has never been easier.
Purchasing a truck can be a significant expense, even for the most established trucking companies. As with most vehicles, acquiring a truck typically requires either a lease or a purchase. Which is the wisest investment? Let’s take a look at some of the pros and cons associated with each option to help you make a more informed decision for your business.
Leasing is essentially financing the use (or deprecation) of your truck, as opposed to a loan, which finances the actual vehicle. There are various types of leasing agreements to choose from, but generally speaking, a truck lease covers the difference between the purchase price of the vehicle (excluding sales tax) and the projected value of the vehicle at the end of the lease terms.
One of the biggest differences between a lease and a purchase is what happens when all the required payments have been made. Unlike a purchase, with a lease, you will not automatically own the vehicle at the end of the terms. Some leases will allow you to purchase the truck when the lease ends for an additional amount of money, while others will allow you to trade the vehicle in, either for another truck or for the remaining cash value.
Depending on the type of lease you choose, you could end up paying more for a “closed end” lease. You could also be paying for mileage or wear and tear before you walk away as well. Furthermore, leases often include other expenses, such as security deposits, non-refundable acquisition fees and other miscellaneous fees.
In short, leasing provides flexible options, but sometimes that flexibility can come back to hurt you, as having an outstanding lease on a vehicle directly impacts your company’s cash flow, taxes and ability to replace or increase fleet.
Unless you can afford to pay in full, buying a truck typically involves taking out a loan for the purchase amount, less any cash down payment you can come up with. The loan will be for a set term, with incremental payments due that include whatever interest rate your business was assessed. Unlike leasing, purchasing a vehicle doesn’t involve nearly as many fees or expenses. It also provides the distinct advantage of allowing your business to establish and grow equity over time. When that last loan payment is made, ownership of the vehicle is transferred over to your company.
When purchasing a truck, there are a number of available equipment financing options from which to choose. Most importantly, as you make payments on the truck, unlike with a lease, you will continue to increase your equity in that vehicle. Once your financing obligation is met, you will be free to do whatever you’d like with the vehicle, including selling it to raise more capital for newer, better or additional truck purchases.
Ultimately, the choice of whether to lease or purchase will depend on your company’s unique situation. It will also depend on cash flow. If you’re looking to increase your fleet, trucking factoring can help provide an additional avenue of income to help make lease or loan payments more manageable.
You’ve probably heard the well-worn story of Goldilocks and the Three Bears. In this age-old tale, young Goldilocks is out for a walk in the woods when she stumbles upon the cabin belonging to the three bears. Upon entering and realizing nobody was home, she tests out each of the bears’ beds. Finding baby bear’s bed to be “just right,” Goldilocks promptly falls into a deep, fitful sleep. In real-life, this concept of finding solutions that are “just right” is important, especially in business.
Often times, staffing companies struggle to find the ideal solution to their cash flow woes. Let’s take a closer look at what these challenges are and how they can be overcome.
Funding Your Payroll
When it comes to paying your employees, there are a number of different options available to you. Determining which one is “just right” will depend on your specific business needs and a wide variety of other factors. These options include:
Traditional Revenue Funding – That is, relying on your incoming revenue to issue payroll. While on paper this may seem like the wisest choice, in reality, it may actually be more challenging than you may realize. After all, if your payroll is contingent solely on your income, what happens during a financial down turn? Furthermore, if most of your profits are being paid back out, this type of setup can stunt your ability to grow.
Payroll Loans – Another viable option for funding your payroll is taking out a bank loan. This isn’t necessarily a terrible idea, but it’s not the right fit for everyone. It’s important to weigh the pros and cons of taking on additional debt and to assess your company’s financial ability to repay the loan without stretching yourself too thin. Additionally, if you’re finding yourself in a position to need extra funding for your payroll needs on a regular basis, bank loans could potentially make matters worse. In fact, you may not even be approved.
Payroll Funding – The third option is invoice factoring or payroll funding. Unlike the other two methods, there is no dipping into existing or incoming funds, nor does it involve incurring any type of debt (and the interest payments that come along with it). Instead, you simply sell some or all of your outstanding accounts receivable to a factoring company for a small fee. The cash payment you receive in return can then be used to fund payroll (or any other business needs you may have).
When you consider the three available options, it becomes clear that for the majority of staffing companies, payroll funding is the solution that fits “just right.” This is especially true for smaller to mid-sized firms or those that wish to grow and expand, as it doesn’t require the use of existing profits nor does it depend on bank approval or credit-worthiness.
Some of the other benefits of staffing factoring or payroll funding include:
Fast Access to Working Capital – With the right partner, you can have the funds you need in no time. Eliminate the time-consuming task of waiting for invoices to be paid or for banks to make decisions. Get your cash when you need it.
Flexibility – If there’s one thing about the staffing industry, it’s that there can be tremendous ebbs and flows in the demand for talent. With payroll financing, you don’t have to worry about how you’ll keep up with these changing demands, because you’ll always have access to the funding you need.
Opportunity – Growth is something that many smaller staffing businesses strive to achieve. The problem is, many find it difficult to compete due to financial restraints. Having access to funding when you need it allows you to take on those larger clients without the worry of how differing payment cycles might impact your business.
Customer/Client Satisfaction – When you no longer struggle to meet payroll, regardless of external or internal circumstances, employees and the companies you place them with will find your staffing company “just right” too!
Want to learn more about payroll funding? Click here or contact us today!
Keeping up with the demands of a successful business venture, while at the same time, trying to achieve ongoing growth can be quite challenging – even for the most seasoned professional. Whether it’s expanding to reach new market segments, opening additional locations, hiring more employees or whatever else the case may be, invoice factoring can provide the ideal solution to a business owner who is looking to grow his or her company. If you’re ready to take your business to a whole new level but are unsure where to begin, here are a few ways small business factoring can help.
What is Invoice Factoring?
As a small business owner, you’re probably well aware of the struggles associated with cash flow. Finding a way to fund operations and expansions without going completely in the red isn’t easy. In fact, finances are one of the biggest reasons small companies are unable to grow. So what are your options? Well, there’s always a business loan, assuming you can get approved and the interest rate makes it worth your while. Unfortunately, with banks tightening their belts and limiting the amount of funds they’re willing to extend to small business clients, this isn’t always a feasible option.
Enter small business factoring. Rather than relying on credit to create working capital, factoring for small business involves a cash payment in exchange for the purchase of your accounts receivables. There is no loan, no payments and no debt incurred. You simply receive an upfront payment for the amount of your customer invoices, minus a small fee.
Benefits of Small Business Factoring
Invoice factoring provides a number of distinct advantages over traditional funding options. Among these benefits include:
- Fast access to cash – No more waiting for bank executives or investors to make their decisions
- No additional debt – Access the cash you need to fund your business growth without the hassle of loan payments
- Fewer headaches – No more worrying about chasing your customers for payments
- Control and flexibility – Unlike loans and other forms of funding, you remain in total control over how much of your receivables you’d like to sell
- No interest – Factoring for small business does not involve any payments or interest
- No risk, less stress – Because invoice factoring doesn’t involve repayment, there’s no need to worry about how your business’ performance might play a role down the road
Taking the Next Step
You’ve worked hard to establish your small business and make it profitable. Now, the time has come for you to focus your efforts on growth and expansion. Invoice factoring can help you successfully achieve these goals and even exceed them without the worry or hassle of incurring more debt in the process. Getting started is easy. First, determine how much capital you need to raise in order to fund your proposed growth strategy.
With that number in mind, identify your slow paying customers and factor those accounts receivables. Then, choose an invoice factoring company with whom to work. Be sure to select a partner that has experience and a proven track record working with small businesses like yours. Finally, complete the necessary paperwork and receive your payment.
With the right kind of funding, you can focus your time and resources where they matter most: on taking your small business to the next level. If you think invoice factoring might be the right option for you, or you’d like to learn more about how this type of business funding works, contact us today!
The freight brokerage industry is one of intense competition. While being flexible is important, identifying a specific niche to focus on can help your firm stand out and improve your chances of sustained profitability. Some freight brokers naturally know what markets they should target based on their experience within the industry, but others – particularly those who are just starting out – may not find this decision as straightforward. If you find your company is taking on too much, or you’re struggling to differentiate yourself from your competitors, here are a few tips for locating and capitalizing on your most lucrative market.
Benefits of Niche Marketing
The reason focusing on one or two key areas is so advantageous, especially in the freight brokerage field, is because doing so allows your firm to develop a higher degree of expertise. By working in the same market segment day in and day out, you will become immersed in all of the elements that make that sector unique. Over time, this in-depth experience will help your company emerge as a trusted resource, both for existing and prospective customers. You’ll also be able to dedicate your time, effort and marketing dollars to a much more targeted audience, increasing your ROI.
Identifying Your Freight Broker Niche
Some freight brokerages find it easy to identify the specific niche markets where they’d be most likely to succeed. For others, this process takes a concerted effort. If you’re in the latter group, here are a few tips for determining which areas would be best for you to focus.
- First, assess your company’s unique value proposition. What makes your firm so special? Why should your prospects choose your freight brokerage over another? Identifying these strengths and key competencies can help you further define the area in which your services would be most effective.
- Next, consider the various segments in the industry to determine which most closely matches what your firm has to offer. Some niches to consider include:
- Type of product/material being shipped
- Type of trucks used
- Specialized brokerage cargo
- Finally, once you’ve decided on an area of focus, immerse yourself in it. Learn everything there is to know about that particular segment and start marketing your firm accordingly.
Now that you’ve figured out which market your firm is best suited for, the real work can begin. Developing a strategy and establishing yourself as a key player in your chosen area of expertise isn’t something that happens overnight. It takes time and effort to truly achieve the results you’re after. That said, here are a few tips to get you moving in the right direction.
Leverage Your Experience – On-the-job experience is extremely valuable and a critical component of successfully establishing yourself as a niche market expert.
Build Your Portfolio – Focus on landing a few good clients and then build on that momentum. Over time, this will help your freight brokerage to develop a reputation as a leader in your chosen market.
Establish Alliances – In such a competitive industry, putting down roots in a specific segment can be challenging. Linking up with other professionals who are also related to the industry (but not direct competitors) can help. One example is you can find other professionals through the TIA.
Promote Your Specialty – Once you’ve identified and begun conquering your particular niche, make sure your marketing efforts are aligned accordingly.
Invest Wisely – Lastly, you cannot expect to be successful, unless you’re maximizing your firm’s cash flow. If this area still isn’t your strong point, freight broker factoring might be an option to consider.
The freight brokerage industry can be fiercely competitive. While it may seem like a good idea to be open to all areas of business, taking on too much could potentially harm your company in the long run. Focusing on a specific niche market, on the other hand, can really help your firm stand out. The tips provided above should help you identify what areas to focus on for optimum results.
Want more industry tips and tricks? Check out our Freight Broker Blog.
Cash flow problems can cause you to put the brakes on your trucking business. Before you find yourself running on empty, take a look at freight factoring; it’s cash flow without debt.
You may have heard of this type of financing before around the truck stop or at trade shows under different names like truck factoring, accounts receivable financing or even transportation factoring. Despite the name, the purpose is the same: to get you cash when you need it.
What is Freight Factoring?
Factoring companies like Triumph Business Capital can purchase your outstanding invoices for a small fee, so you don’t have to wait 30, 60 or even 90 days to get paid.
With that extra cash in hand, you now can pay your drivers (or your salary), insurance costs, fuel and other expenses eating at you. If you’ve been thinking about growing your trucking business, freight factoring can help you buy more trucks and hire more drivers.
With truck factoring, slow paying customers don’t have to slow you down.
Freight bill factoring isn’t one size fits all. It grows with your business. Through recourse and non-recourse factoring, you can tailor factoring to fit your business.
What to Look for with a Factoring Company
Your transportation factoring company will be dealing a lot with your money, so the first thing you want to look for is a team you can trust. Make sure you have the ability to see the status of your funding whenever and wherever you need to.
Yes, a rate is important, but a freight factoring company you can trust is of greater importance. That low rate isn’t going to do you any good when your factoring company won’t communicate with you about when you will get your money.
You should also look for a trucking factoring company that partners with others who offer helpful services to truckers. For example, Triumph Business Capital is exclusively partnered with DAT Solutions, allowing load board users to see which loads are factorable directly on the load board.
Stability is another important aspect to look for in your freight factoring company. Because your factoring company deals with your cash, you want to make sure it is financially stable. Along with Triumph’s financial stability in Triumph Bancorp, it also has the ability to offer your business various financial services- insurance, equipment financing and even asset based lending.
Freight factoring could be the answer to your inconsistent cash flow. Feel free to give an expert at Triumph a call at 866-368-2482.
Social media is revolutionizing our world, not only in the way we connect with others but also how businesses market. With 74% of internet users using social media, small businesses can’t ignore that a large part of their audience are active on social networking sites. This audience is filled with current customers, potential customers, and even potential brand ambassadors.
So how can your small business utilize social media to build relationships and ultimately generate sales?
You can’t just start by posting on Facebook or sending out a tweet. You need to approach your social media marketing with purpose.
Identify Your Goals
Why does your company want to be on social media?
Think about your business and what makes sense for your customers. If you run an e-commerce site, then maybe your goal is to drive people to the website to purchase goods. If you are a B2B company, maybe your goal is to build brand awareness or thought leadership in your industry.
Here are some ideas when determining your goals:
- Build thought leadership
- Establish brand awareness
- Drive sales
- Create relationships with customers
- Increase website traffic
Once you have your goals identified, write them down. You will want to refer to them as you further develop your social strategy.
Research Your Intended Audience
Each social media platform has a different audience that they cater to. While many individuals and businesses may be on multiple platforms, you need to find where your audience is and engage with them there.
This chart is just a snapshot of the social media platforms available to your business. Continue to do research on what platform(s) is best for your small business.
Gain an Audience
Once you have identified the right social media channels for your business, it’s time to build your social audience. You want to find the right people to engage with your content so that ultimately you can fulfill your goals.
- Invite your customers using email or even giveaways in your brick and mortar store. When we first created our Facebook page, we had giveaways in exchange for likes at a trade show. Get creative.
- Run Facebook advertisements to get your pre-determined audience to “like” your Facebook page. A little money can go a long way when it comes to Facebook advertising.
- Use relevant hashtags on Instagram and Twitter to create buzz about your page and content.
- Use tools like Klout and Follerwonk to determine industry leaders. Follow these users and engage with them on their social platforms. You can also see who follows them, and they might be someone of interest to you too.
- As you begin to engage with others on social media, you will begin to grow your following. Now that you have followers, you can begin to reach your social media goals.
The next post in this series will highlight how to create killer content to fill your social media pages.
Utilizing software product can play a big role in the success of a freight brokerage for a number of reasons. First, it can help streamline operations. It can also dramatically improve efficiency and productivity levels. Finally, it’s one of the most effective ways to maintain compliance at all times. The problem is not all freight broker software products are created equal. To help making your selection a little bit easier, here are few of the more popular options, in no particular order.
Tailwind Transportation Software – The Tailwind product is great for freight broker companies that handle a variety of load types, including local, flat bed, intermodal, and long haul loads. It includes multiple load boards, accounting functionality, customizable quotes and is cloud-based and paperless. The company offers free demos so you can see how the product works prior to purchasing.
Ascend TMS – With their FREE TMS, AscendTMS manages loads, financials, document management and much more. If you need to pinpoint your carriers within your TMS, the AscendTMS tracker allows you to see where your drivers are located using their cell phone’s GPS. Also with this integration, carriers can send a text message with the status of the load, allowing you to keep tabs on the load from pickup to drop off. With AscendTMS, you also have the ability to post to 52 load boards, so your loads have the best chance of getting picked up. Learn more about AscendTMS’ features, here.
McLeod PowerBroker Software – This product is extremely popular among many large freight brokers because it is incredibly robust and feature-rich. It offers a fully integrated freight brokerage operations management system and a complete accounting software solution all in one package, from one company. Furthermore, the company also offers mobile applications so freight can be managed from anywhere.
Aljex– Aljex is a cloud based TMS with products for brokerages, carriers and intermodals. For freight brokers, they provide daily support, giving you the help you need when you need it. Their support is unlimited, allowing you to best use their robust system for all of your needs. From document imaging to posting to load boards, Aljex has many features available to users. You can even request a free demo of the product before you purchase.
3PLSystems, Inc. – The 3PL product branded as “BrokerWare™ Transportation Management System” is designed to operate freight brokerage from A to Z utilizing a wide variety of unique and highly-effective features. These include such options as least cost routing, sales portal, customer portal, and a bi-directional accounting integration. They’re also known for their user friendly interface. The company offers a number of demo videos as well as the option request a live demonstration.
When it comes to choosing the right freight broker software, the options are many. The five listed above should at least give you a decent starting point to help you narrow your selections and choose the ideal product for your business needs.
Driving a truck may seem pretty simple and straightforward, but given the size and power of these vehicles, safety is critical. That’s why a significant portion of all truck driver training programs is devoted to teaching future drivers how to keep themselves and other operators safe on the road, while also protecting their precious cargo. If you’re planning a career in trucking, below are critical truck driver safety tips to keep in mind when getting behind the wheel.
Load Cargo Carefully
If you are responsible for loading your own truck, be careful about how you do so to avoid potential issues once you hit the road. Remember that the higher you stack your cargo, the more drag you will have on your truck. By stacking lower and distributing cargo throughout the full space of the truck, your vehicle will be easier to control and maneuver, making it safer. As an added bonus, you’ll also improve your fuel economy. Want to see how to best load your cargo? Use this simple load calculator.
Understand Blind Spots
All vehicles have certain areas known as blind spots from which the driver is unable to adequately see what’s around him or her. For larger vehicles, common blind spots include the area off to the side, just in front of the cab; directly behind the side mirrors; and directly behind the truck itself. It’s important to take extra precaution when conducting certain maneuvers, such as backing up or changing lanes. Also, keep in mind that four wheelers may be unaware of these blind spots. In fact, most four wheelers don’t know about the four no zones. You could think about placing warning signs with pictures of your blind spots on the back of your truck to inform four wheelers of the dangers.
Reduce Speed on Curves
Posted speed limits, particularly on roadways that feature lots of curves, are meant more for four wheel drivers. Larger trucks aren’t meant to hit these higher limits, especially around corners and bends. Driving too fast in such an area can increase the risk of your truck tipping over. Whenever you’re navigating around curves you should always reduce speed below the posted limit.
There are plenty of things you can do to ensure that your driving is safe, but since you’ll inevitably be sharing the road, it’s also important that you take into consideration the other drivers around you. Always be alert and prepared for any situation, like avoiding a collision with a vehicle that unexpectedly cuts you off.
Adjust for Bad Weather
About one quarter of all speed-related accidents involving trucks are caused by inclement weather. It’s critical that you reduce your driving speed accordingly when traveling in poor weather. A good rule of thumb is to reduce your speed by one-third when roads are wet and reduce half your speed when snow or ice is present. Allow ample time for other drivers to see your signals before changing lanes, and if you notice other truck drivers pulling over, it might be wise for you to do the same. For more information on winter weather driving tips, check out our blog post.
Drive with Caution in Construction Zones
Believe it or not, incidents involving large trucks account for approximately one-third of all construction-zone accidents. This is why truck driver training includes detailed instruction on how to watch for and avoid such situations. Pay careful attention to all road signs and always err on the side of caution by reducing your speed any time you are driving through a construction area.
Maintain Your Vehicle
Prior to leaving for any type of road trip, you are responsible for conducting a thorough inspection of your truck. Any potential problems should be reported and/or corrected immediately. The act of properly maintaining your vehicle can dramatically reduce the number of safety incidents that occur on the road. Test your knowledge about a pre-trip inspection with these free tests!
Another important lesson, though one that isn’t usually covered in truck driver training, is that of remaining calm in any situation. For some, this is easier said than done, especially in stressful situations such as heavy traffic or other delays. If you are to remain safe and prevent potentially dangerous accidents, however, keeping a cool head is essential.
Take Care of Yourself
Driving a truck can be an exhausting job, but given the inherent risk associated with the profession, taking proper care of yourself is of the utmost importance. For instance, making sure you always get the proper amount of sleep prior to getting behind the wheel. It’s also good practice to eat well, exercise regularly and enjoy some much-needed time off every so often. Doing so will keep you refreshed and rejuvenated, which will lead to safer driving all around. Trucking companies and drivers are making big changes for a healthier lifestyle; learn more in “The Push to Help You ‘Keep On Trucking.’”
One of the most important goals any truck driver strives for on a daily basis is that of safety. It takes a concerted effort and well-planned execution to avoid accidents and other potentially dangerous situations while behind the wheel. The truck driver safety tips listed above should provide a good foundation for keeping yourself, your vehicle and your fellow motorists out of harm’s way.
Did you know that the U.S. government actually has a goal to award nearly one-quarter of its prime contracts to small businesses? Furthermore, Congress approves over $1 trillion in spending just about every year. Though this is great news, a good number of small businesses are still hesitant to get involved. Much of the resistance is due to a number of myths and misconceptions that are still being perpetuated. If you’re wondering how to get government contracts for your small business, here are some of these common misbeliefs and the actual truth behind each of them.
Myth: My Business is Too Small to be Competitive…
Truth: As mentioned above, the U.S. government sets aside a certain amount of money each year to specifically be spent on contracts with small businesses. That means for many contracts, larger organizations simply don’t qualify. When we take size out of the equation, the opportunities become much more attainable. (You can learn more about the various programs for small businesses here.)
Myth: The Lower Bidder Always Wins…
Truth: Sure, there will be times when another candidate is chosen based on the lowest price, but this is actually more of an exception than a rule. In fact, the Federal Government as well as state agencies have the right to award government contracts to whichever candidate they feel is best suited, regardless of the actual bid amount. Be competitive but confident in your company’s ability to provide quality goods or services, and you’ll have a very good chance of winning.
Myth: It Takes Forever to Get Paid…
Truth: Despite the horror stories you may have heard about on the news or read about in the paper, most government contracts are paid in a very timely manner. In fact, the average turnaround for remittance of monies owed is around 30 days, sometimes even less. Additionally, there are other options available to you when time is of the essence. For instance, government contract factoring allows you to collect what’s rightfully yours upfront without the hassle of waiting.
Myth: I’ll Spend a lot of Money and Time and May Not Even Win…
Truth: While government contracting does involve an investment of time, money and resources, the outcome isn’t nearly as bleak as you may think. In fact, a recent report by American Express OPEN found that small businesses seeking a government contract for three years or less were awarded their first contract in just one year and after only three unsuccessful bids. The old adage that “you can’t win them all” can be applied here, as with any other business dealing, but success is certainly not impossible.
Myth: It’s Way Too Complicated…
Truth: While there’s definitely a learning curve when it comes to understanding how to get government contracts, working with Federal or state agencies is really not all that different from doing business with other large organizations. It may take a bit of trial and error, but getting the process down to a science isn’t nearly as difficult as one might think. These tips should help cut down on the trial and error:
If you’ve considered the possibility of bidding on a government contract but were hesitant due to one or more of the above misconceptions, the truths exposed above should help you make a more informed decision.
It’s that time of year again – tax season. As a small business owner, there are a number of unique considerations that you must account for while preparing to file. To make things a little easier, we’ve pulled together some best practices and small business tax preparation tips below.
First you need to gather the appropriate documentation reports and transaction lists. It’s always wise to keep close track of all expenses incurred throughout the year so that come tax time gathering the information you need won’t be a time-consuming hassle. This can be done a number of ways, whether it’s in a spreadsheet or within a software program. The more you keep track of, the more you can claim as deductions.
The IRS determines what items can and cannot be deducted for your small business taxes. These may include, but are not limited to:
- Home Office – If you work primarily out of your home, you may be able to claim some or all of the area in which you conduct your business activities. Keep in mind, however, that in order to qualify as a small business deduction, the space you’re claiming must be devoted solely to your business. To determine the percentage you are allowed to claim, measure your office area and divide the results by the total square footage of your home.
- Office Supplies and Furniture – Many of the supplies that you use in the operation of your small business can be deducted as an expense on your taxes. Furniture is a bit trickier, as there is depreciation to take into consideration. A qualified tax professional can explain your options and help you determine which, if any, make sense for your business.
- Mileage – The distance you travel in the course of conducting business transactions may be deductible, along with other local travel-related expenses, such as tolls. Again, this can become a bit tricky, as it ultimately depends on your starting point and other criteria. For example, if your office is located in your home, you can start tracking mileage right from there. If your office is located elsewhere, you can only claim the mileage you travel from that starting point to your destinations.
- Business Travel Expenses – The money you spend while traveling for business purposes, such as paying for a hotel room, airfare and renting a vehicle can all be deducted on your small business taxes provided you have proper documentation. Additionally, a portion (50%) of your meal costs while traveling may also be deductible.
- Insurance Premiums – The price of small business insurance premiums might be deductible if you are self-employed. Again, sitting down with a tax advisor is recommended to ensure compliance, and that you are availing yourself of all the deductions that you are entitled to.
Next, in order to file correctly with the government, you will need to make sure you complete and file the correct forms. Otherwise, you could end up delaying the process or missing out on available deductions. The type of form you need depends mainly on what you’re claiming as well as the type of business you own. For example, sole proprietors must attach a Schedule C to their personal income tax returns. For LLC and incorporations, there is additional paperwork required and forms must be filed separately from personal taxes.
Finally, you’ll need to pay careful attention to the filing deadlines for specific forms. A few of the dates to be aware of for small business tax filings are as follows:
- Schedule C must be turned in by the typical April 15th deadline.
- Form 1120 must be filed by the 15th day of the third month, which is typically March 15. You can’t include this with your personal income tax forms.
For more information on how to do your taxes as a small business, check out these instructional videos from the IRS or schedule an appointment with a tax professional that specializes in small business taxes.
Staying up-to-date on the latest recruiting strategies can be tough, particularly when it comes to attracting quality candidates from the millennial generation. The reason it’s so challenging is because individuals from this demographic are markedly different from previous generations. Before you find yourself frustrated and ready to throw in the towel, let’s take a look at some creative recruiting resources staffing agencies can employ to help win over Millennials.
Understand what motivates them.
Unlike Baby Boomers and Gen Xers, Millennials have a completely unique set of desires and needs when it comes to their careers. For instance, younger workers place a much stronger emphasis on things like flexibility, work/life balance and growth opportunity than traditional motivating factors, like salary. Understanding what these workers are looking for can help you position your openings to make them more attractive.
Use social media.
The Millennial generation uses social media for much more than just keeping up with friends and family. They also turn to these online networking sites to connect with brands, make purchasing decisions and – yes – even look for work. If you want to reach candidates from this younger group, you have to meet them where they are, so be sure to incorporate social media into your recruiting strategies.
Create a mobile friendly site.
These days it seems just about everyone has a smartphone or other type of handheld device. This is especially true for Millennials, who are referred to as the first digital natives since they were born and raised during a time when the internet and things like cloud technology were the norm. In terms of staffing, some 1 billion job searches are conducted using a mobile device each and every month. Leverage this by ensuring that your recruiting site is mobile-friendly and can be easily accessed and navigated using any device.
Make culture a top priority.
Candidates from the younger generation want to work for companies that have invested in developing and fostering cultures that value people, not just the bottom line. That’s why employer branding is so important during the recruiting process. Staffing professionals must find a way to demonstrate and effectively “sell” the overall vibe and culture of the company if they want to win over Millennials.
Provide work that matters.
Another key differentiator of the millennial generation is how strongly they feel about making a difference. This applies both to the impact they can potentially make with their employer as well as in the world around them. For this reason, recruiting strategies must involve clearly defining and effectively communicating the role being offered and how it factors in with the big picture.
Last but not least, if you want to attract and win over the hearts and minds of millennial workers, you must remain at peak performance and in sound financial shape. If payroll funding and cash flow issues are holding you back from successfully reaching qualified candidates, funding through staffing factoring might be just the solution. This will allow you to focus on getting the right people instead of worrying about how to keep them.
With Millennials now occupying more than 50% of today’s workforce, figuring out the best way to reach, engage and appeal to them is more important than ever. By incorporating the above best practices into your overall recruiting strategy, you’ll have a much better chance of landing the types of quality younger candidates that will help drive the ongoing success of your business.
With the new year comes concerns about staffing news and about correctly filing staffing taxes for your temporary staffing agency. Tax surprises are rarely good. Whether you have filed before or your agency is new within the last year, getting through tax season with accurate and acceptable payroll and tax records are imperative to the success of your business.
Know Your Company’s Tax Status
Although it depends somewhat on your location, most states consider staffing or temporary agencies to be the full employers of temporary employees. This designation requires that your business has a state tax identification number as well as an EIN from the federal tax administration. Double-check with your tax attorney or accountant for the classification of your company before you begin the tax process.
If your agency is, in fact, the employer of temporary employees, you may also find yourself subjected to paying employment taxes. These include temp agency payroll taxes, Medicare, Social Security and federal unemployment taxes and federal income tax withholding.
Completing all of these forms and filings can make your staffing taxes much more complicated than you had originally envisioned. For that reason, consider these tips to help you complete your tax process:
1. Understand Your Payroll Taxes
Your staffing agency is subject to taxation at both the federal and state level, and you are responsible for collecting unemployment taxes from your employees. Although it may be tempting to label your employees as “independent contractors,” the facts that you have legally provided these individuals with their set hours of employment, that you have a continuing working relationship with them and that you are paying them with a set payment method all indicate that they are business employees.
When companies pay your agency to employ your temporary workers, you are responsible for collecting payroll taxes from the pay that is passed on to those workers. The amounts of money that change hands should be clearly spelled out in the contract you make with the hiring companies, as well as with your employees.
2. Calculate the Withholding Amount from Employees’ W-4 Forms
Federal law mandates that you determine the amount withheld from each employee via the information provided by the employee on his or her IRS Form W-4.
With each wage payment that you make to the employee, you are required to withhold an amount. This number is likely different for each employee, depending on his or her earned wages and claimed exemptions. Each wage payment is considered a separate taxable event and must be treated as such.
Use the standard tables provided by the IRS to determine the amount withheld for each of your employees. This amount is based on:
- The size of each wage payment
- The frequency of payroll payments
- The employee’s current marital status
- The employee’s claimed withholding exemptions as filed on the W-4 form
The W-4 forms are only for you and your company to determine proper exemptions and withholdings as you are calculating your payroll taxes. You do not need to file them with the government or the IRS unless there is a discrepancy in information.
The total amount that you withhold should approximate each employee’s year-end tax liability. If you do not have a completed W-4 for an employee, treat that person’s withholdings as being single with no exemptions.
3. Provide a W-2 to Each Employee
As a company, you are required to withhold the proper amounts from your employees’ pay and to deposit those amounts with the appropriate tax agencies. These withholdings will include federal and state taxes, Medicare and Social Security taxes and federal and state unemployment taxes. In order to complete these requirements, you must provide all of your employees with proper W-2 and 1099 reports that thoroughly explain their yearly compensation and withholding amounts.
All employees must receive a W-2 by January 31 of the year following the employment year. Those who do maintain an independent contractor status and earned more than 600 dollars in compensation should receive a 1099 instead.
4. File and Pay Federal and State Taxes on Time
You can avoid tax penalties by paying your federal and state taxes on time. Your federal tax deposit must be made electronically through one of these methods:
- The Treasury Department’s free Electronic Federal Tax Payment System (EFTPS)
- A trusted third party, such as a payroll service or tax professional
- A financial institution that can initiate an ACH Credit payment
Many states now also require your deposits to be made electronically. Consult your state agencies for more information.
All deposits must be made on time. If your due date falls on a Saturday, Sunday or national legal holiday, you have until the close of the next business day to complete your deposit.
5. Maintain Proper Records
Once you have successfully distributed all your W-2 and 1099 forms to your employees and independent contractors, you must make sure that you have proper records that explain the payroll taxes that you paid for the year. Per the federal requirements, keep all records for at least four years before destroying them. Check your state record-keeping requirements as well.
Should the IRS ever question your payroll or business, these records must be kept for examination. Make sure that you have:
- The names, addresses and Social Security numbers for every employee
- The period of employment and compensation for each employee
- The total amounts of pay given to each employee
- The amounts of each payment kept as taxable wages
- Complete copies of each employee’s W-4 form
- All dates and records for each tax deposit made by your company
- Thorough copies of all tax returns filed
- Any and all W-2 forms that were undeliverable to past employees
All of these records must be kept in an orderly fashion to be immediately examined by an IRS official if requested.
The clock has started ticking.
On December 16, 2015, the Federal Motor Carrier Safety Administration (FMCSA) published the official Electronic Logging Device (ELD) mandate, enforcing the adoption of ELDs by all truck drivers before December 18, 2017. Not only did the FMSCA publish this rule by Congressional mandate, but they also believe that this rule will eliminate 1,844 crashes, prevent 562 injuries and save 26 lives.
What does an ELD do?
An ELD tracks the hours a trucker is on the road and location of the truck and will replace the paper logs that truckers have been required to keep. The device can’t allow any deletion of driving time and must be tamperproof. This allows the FMCSA to use electronic data to track compliance for HOS rules. Drivers will still need to keep supporting documents to verify HOS compliance (bills of lading, dispatch and trip reports, mobile communications, etc).
Who Does and Doesn’t Need an ELD?
Drivers who fill out paper logs will be required to abide by the ELD mandate. However, this rule doesn’t apply to some drivers. Drivers that are exceptions to the rule are:
Timecard or “shorthaul” drivers
Drivers in the driveaway-towaway business
Drivers that drive a vehicle manufactured before model year 2000
Why does the model year matter? Before 2000, commercial vehicles have different aspects to their engine control monitors that wouldn’t allow the ELD to capture the information it needs.
Grandfathering of the ELD Mandate
As with any rule, there are exceptions. Because there is equipment similar to ELDs already in use by many carriers, the FMCSA has allowed a “grandfathering” of some equipment. If they follow the standards put in place for Automatic On-Board Recording Devices, then they can be used until December 2019. Such equipment can also be modified to meet the ELD specifications to be used after December 2019.
Two Sides of the Fence
Industry experts can agree that December 16th was a historic day in the transportation industry. However, major industry leaders have different feelings about the mandate. A day after the FMSCA made the final ruling on ELDs, the Owner-Operator Independent Drivers Association (OOIDA) sued the FMCSA.
OOIDA also has some issues with the privacy of the mandate. In a recent Transport Topic article, OOIDA President, Jim Johnson says, “This regulation is absolutely the most outrageous intrusion into the rights of professional truckers imaginable and will do nothing at all to improve highway safety. In fact, we firmly believe it will do exactly the opposite by placing even more pressure and stress on drivers than they already deal with.”
While OOIDA strongly opposes the FMCSA’s decision, the American Trucking Association (ATA) believes this ruling will make a positive impact on the trucking industry. According to a recent article published by the CCJ (Commercial Carrier Journal), this mandate has been a priority of the ATA for about 5 years now.
Other transportation groups have differing feelings surrounding the mandate. Regardless of outlooks, currently the ELD mandate is still in place.
So What’s Next?
Carriers should start the process of finding the right ELD for their business. Manufacturers of the equipment will be required to have it tested and certified with the FMCSA to verify it meets the mandate’s standards. It will keep a public registry of approved devices for carriers to reference, starting on February 16. Before choosing an ELD system, ask the provider the following questions:
How was the certification earned?
Was testing involved? If so, what tests were done?
What state rules were considered in manufacturing?
Due diligence is especially important when choosing your ELD, because if an ELD becomes de-certified, you will need to find a new ELD, which requires more time and money.
Many carriers have been using fleet management software or equipment that functions similar to an ELD for some time, and many should be able to continue using them under the new ruling.
To see what the ELD mandate means for you and your trucking company, please visit the ATA’s summary of the ELD mandate.
The FMCSA posted the full mandate that you can read by clicking here.
It’s almost that time of year again – tax season. For truck drivers, there are many unique deductions available that can help reduce monies owed and maximize returns. Before sitting down with your accountant or tax advisor, here are some of the things to take into consideration that will help you get the most out of your 2015 tax filing.
Part of your truck driver training should have included the importance of keeping detailed records of all the expenses you incurred over the course of the year. By keeping track of how your money is being spent, you’ll be able to more accurately determine exactly what and how much you can deduct. Keeping receipts and other documentation in one place, such as in a folder or on a spreadsheet is recommended.
What’s New for 2015?
In some instances, new tax laws are implemented that specifically impact truck driving professionals. For 2015, Section 179 of the tax law has been expanded to include a few major deductions that were not previously available. For instance, starting with this year’s tax filing, you can now depreciate any truck you own over a three year period for tax savings purposes.
Additionally, if you purchased your truck in 2015, you can now deduct the actual amount you paid during the year, even if was financed.
What Else Can You Deduct?
Beyond equipment, there are also a number of other deductions that are available to trucking professionals. If you are an owner operator, many of the supplies necessary to run your business can be counted as deductions on your taxes. Some examples of these types of deductions include, but are not limited to:
- Internet and cell phone costs
- DOT required physical exam
- Drug tests
- Load board subscriber fees
- Postage fees (mailing invoices, bills of lading, etc.)
- Subscriptions to trucking publications
- Cleaning products for your truck
For a full list of available deductions, click here.
What Can’t You Deduct?
Just as it’s important to understand what deductions are available to you, it’s equally important to avoid taking deductions on things that are not allowed. If you’re not careful, your return could be flagged for a costly and time consuming audit. For instance, if you are a company truck driver and your company reimburses you for any of the things listed above, you are not allowed to deduct them on your own taxes.
Additional expenses that are not considered tax deductible include:
- Home phone
- Personal vacations
- Everyday clothing (not your uniform)
As with anything else relating to finance and taxes, it is always advisable to consult with a professional such as an accountant or tax advisor. It’s particularly beneficial to work with someone who has experience filing taxes for clients in the trucking industry.
As a successful staffing professional, you’re probably in the process of setting your goals and objectives for the coming year. In doing so, it’s important to consider the trends that are expected to occur over the next 12 months. This will help you to better align your own business strategies with what the industry is projected to experience in the near future. With that said, here are some of the biggest predictions to date:
Trend #1: Temporary staffing will see a significant spike.
A recent forecast conducted by CareerBuilder indicated that 47% of employers are planning to hire temporary or contract workers over the coming months. This is in line with many expert opinions that the freelance economy will continue to disrupt the workforce.
Trend #2: Mobility will become even more of a priority.
According to a recent Glassdoor survey, 9 out of 10 job seekers use their mobile devices to search for work. That’s 89% of the candidate pool, and based on past statistics, it’s a number that is projected to continue rising. What this means for staffing professionals is that recruiting strategies must focus on marketing to the mobile market.
Trend #3: The blended workforce model will become more prominent.
With technology like cloud computing and real-time video conferencing, more and more organizations are embracing the concept of the blended workforce. That is, a combination of in-house, contract and remote employees. Look for this more flexible model to become even more prominent over the coming months.
Trend #4: Fresh, new talent will be entering the workforce.
As the Baby Boomer generation begins to make its exit out of the workforce and into retirement, a younger demographic of skilled workers will be taking their place. It’s no surprise then that employers expect to hire 11% more new college graduates in 2016. Of course, adjustments and changes will need to be made to accommodate the unique needs, desires and strengths of this younger group, which leads to the final trend.
Trend #5: Recruiting and retention strategies will need to evolve.
With the Millennial generation poised to take over the workforce by the year 2020, adjustments will have to be made at businesses across every industry. This is particularly true for the recruiting and retention process. Organizations and staffing professionals will need to develop new and better ways to attract, recruit and retain top talent.
By staying apprised of staffing news and knowing what trends to watch for ahead of time, you can better plan and hone your own strategies to position your business for increased success over the coming months.
For additional staffing and recruiting resources, such as how accounts receivable factoring can improve your company’s bottom line, contact us today.
As a small business, you face many challenges, particularly when it comes to competing with larger organizations. One area where this can be especially impactful is in the area of staffing. Simply put, it can be difficult to attract and recruit top talent when compared with some of the big name companies that are also hiring. The good news is there are some creative things you can do to improve your chances of landing qualified employees, regardless of the size or prominence of your brand.
Leverage Current Talent
Chances are you’ve already assembled a crew of highly skilled, hard working professionals who are dedicated to helping your business succeed. Why not tap into that valuable resource as a way to locate future talent? Provide incentives for employee referrals, and you may be surprised at the positive response you receive.
Focus on Culture and Benefits
One of the greatest features of small businesses that their larger counterparts typically lack is familiarity. In fact, the atmosphere of many small businesses is often described as more of a close-knit family, something that big name players simply cannot successfully achieve. Smaller companies also have the option of offering more flexibility. Playing on these strengths can help you catch the eye of quality candidates.
Highlight Learning and Growth Opportunities – With larger organizations, open positions are typically pretty cut and dry. Because small businesses have fewer employees, those who are on the team are often required to wear many hats. This can provide the benefit of more variety in day to day duties and also present opportunity to learn, grow and expand one’s career.
Remember that when you’re marketing your small business to potential employees, it’s important that you remain open and honest about who you are and what your company brings to the table. Don’t try to pretend you’re something that you’re not in an effort to compete with bigger organizations. Trust that there is a pool of qualified candidates who will be excited to work with you and will jump at the chance to grow with and contribute to your company’s success.
For more staffing tips and recruiting resources, check out our other blog posts.
Winning a government contract involves a lot more than simply drafting up a great proposal. It’s the relationships that you develop with the right people along the way that will ultimately bring you the success you’re after. To get you pointed in the right direction, here are a few practical tips for how to get government contracts through effective relationship building.
Making the Right Connections
When it comes to going after government contracts for bid, making connections with the right resources is essential, especially if you’re a small business. Teaming up with fellow contractors is a great way to build credibility and proficiency while improving your chances of winning bids. Locating and connecting with these quality individuals, however, will require a little prep work on your part.
First, focus on getting involved. Networking plays a big role in the government contract world, and this can be done a number of ways. Participating in events, such as government conferences, and joining local business groups can help you locate others who might also be interested in government contracting. Additionally, connecting with various resources via social media can help you establish yourself and get your foot in the door.
When looking for fellow professionals with whom to team up, start by working on smaller projects together first. This will help you determine whether the relationship is a good fit.
Participating in a Mentorship
A great way to learn the ins and outs of how to get government contracts is to connect with someone who is already experienced in the field. The U.S. Small Business Administration offers a mentor protégé program which is designed specifically to help small business owners understand the government contracting process. There are several requirements in order to become a protégé, but being able to participate in a mentorship will make it well worth your time and efforts.
A mentor can provide guidance and advice on everything from the various types of government contracts to best practices for writing proposals, and even how certain strategies, such as invoice factoring, can help improve your cash flow. Partnering with an established mentor can also help you build credibility.
Government Provided Resources
To make the process of contracting a little bit easier, the government has put together a number of resources which are available through procurement center representatives and commercial market representatives. Procurement center reps help potential contractors to better understand the process and are available to assist with other concerns that may arise in the interim.
Commercial market representatives provide assistance with various parts of the process, such as obtaining subcontracts and reviewing prime contractors. They also handle the training on the subcontracting assistance program.
A Step in the Right Direction
The field of government contracting is highly competitive. The one thing you can do to differentiate yourself and strengthen your chances of being successful is to focus on developing relationships with the right people. Doing so effectively will help you establish yourself as a trusted player in the contracting realm.
Triumph Business Capital is a respected resource in the government contracting industry. For more information on our government contract factoring services, or to learn more about whether factoring would be a good fit for you, give us a call. We’re here to help.
The most important freight broker software system that anyone in the freight brokerage industry needs is a Transportation Management System (or TMS for short). A quality TMS can help you match the right carriers with the appropriate loads, route those loads most effectively and streamline other critical organizational needs you have. Unfortunately, not all Transportation Management Systems are created equal. Here are some criteria to keep in mind when researching which product is right for you.
Stability – The first thing you want to look for in a TMS is how stable its developer/provider is. Even if you’ve heard of the company before, getting recommendations and checking references is highly recommended. You should also verify the financial stability of the company you’re considering. This may require work upfront, but worth it to avoid having the TMS company you chose go belly up after you’ve implemented it in your freight brokerage.
Compatibility – Regardless of how stable a TMS company happens to be, it’s also important to ensure that it’s compatible with the needs of your freight brokerage operation. For instance, a big-name company might meet the stability challenge, but their product might be way too complicated for the needs of a small brokerage. Conduct a needs assessment prior to comparing products so you’ll know which TMS would make the most sense for your firm.
Service Levels – Many software developers are super hands-on and attentive during the sales process only to disappear without a trace once the product has been purchased and implemented. You’ll want to look for a company that offers proven service and support after the sale. Ask as many questions as possible during the selection process, such as whether they offer training and convenient support hours. Also, ask for and check references.
Carrier Relationships – The purpose of adopting a Transportation Management System is to make your life easier. One significant way in particular your TMS can accomplish this goal is by organizing your carrier relationships. A quality software system will allow you to manage your carrier contracts as well as keep track of important contract details. It can even help you identify which carrier is best for each load and calculate cost so you’ll know better how much to charge.
Shipment Tracking – Finally, though equally important, a great TMS should allow you to track your freight brokerage shipments in real-time, right down to the tiniest detail about in-transit items. This will allow you to keep your customers more informed and therefore more satisfied. Ultimately, the most effective system will provide visibility into truckload, less-than-truckload (LTL) and parcel shipping details.
Choosing the right software product is important, particularly in terms of maximizing your freight broker leads and shipments. Knowing ahead of time what factors will truly make the difference can help ensure you end up with the TMS product that’s perfect for your needs.
For additional freight broker tips, including how to leverage freight broker factoring to improve your brokerage firm’s cash flow, give us a call today or check out our other blog posts here.
Sandra Walls is President and CEO of AIL Logistics Solutions, a multimillion-dollar, Memphis-based, service-disabled veteran-, woman- and minority-owned company that provides diverse logistics and technical support solutions to government and commercial clients. A retired Lieutenant Colonel in the United States Air Force, Ms. Walls joined the company after serving 22 years on active duty as a logistics officer, managing supply and fuels accounts while making military history everywhere she commanded. She offers a real-world perspective on government contracting based on leveraging her military experience and built on doing what it takes to excel.
In Part 2 of this series, Ms. Wall addresses specific contracting processes and challenges.
Q: What are some misconceptions that many have about government contracting and doing business with the government as a whole?
The most common one I get from people is, “I hear the government does not pay you.” That has never been my experience. Ever. I don’t know who these people are dealing with, because under the “Prompt Payment Act” within the Federal Acquisition Regulation, the federal government is mandated to pay contractors in 30 days. If they are late paying you, they have to pay interest. So it’s in their best interest to pay you on time. They may be late for whatever reason, but that has not been my experience. Some of this is just flat-out fear, because some folks see all of the technical requirements, all of the paperwork, just a large bureaucracy, and they don’t want to deal with it – they’re afraid of it. I tell them don’t be afraid of it. Just go through one or two, and you’ll find that it’s going to become easier.
Q: What challenges are involved in responding to a solicitation?
Initially, the paperwork requirements may be frightening, but once you get into it and understand all the different sections, you get used to it and it’s not as hard. Certain parts of a solicitation never change. For instance, you have to declare your socio-economic certifications, whether you’re woman-owned, minority, service-disabled veteran, in a HUB zone, all of the above. Those are blocks that you check, and some of it is automated and online, so a contracting officer can look up that information or you can submit it with your proposal. The biggest challenge is responding to the technical piece, normally in Section C – the Statement of Work. That’s where you have to really “answer the mail” – tell them how you’re going to go about doing the job. What processes are you going to put into place to make the system work, or how will you improve their processes or enhance their bottom line. Whatever they ask you to do or provide, do it. If you don’t provide the information requested, you may get kicked out.
Q: Do you have a proposal writing team to handle that work? If so, do you recommend that approach?
We’re not large enough to have that kind of dedicated proposal writing team. Depending on the size of the contract, you can find people who make a living putting together proposals, but, in my experience, it’s an expensive undertaking for a small business. As we’ve evolved, we’ve applied that concept internally. We may assign a proposal manager to be responsible for the proposal, to capture the data from different possible areas and then consolidate it into a document that everyone reviews and plays a part in preparing. Also, now that I have a dedicated person on the government side of the business, he’s helping to pull together proposals and he loves to do it, so that’s brought a lot of value as we’ve grown. And, there are some agencies, like SCORE through the Small Business Administration, that will provide support, but they don’t write the proposal for you. They can provide some guidelines, help direct you, but for the most part, you have to wing it. You learn from experience.
Q: Unless you win a contract, how do you know if your proposals are on-target?
One of the cool things with federal contracts is something I haven’t seen on the commercial side: Contract officers are required by law to give you a debrief, offering feedback on how you did. Some things they are not privy to tell you. But their assessment can help you do better in terms of improving the quality of your proposals and help you better prepare for the next one.
Q: How difficult is to obtain security clearance for contracts that have security requirements?
The Federal Acquisition Regulation (FAR) requires a DD Form 254 to be incorporated in every classified contract. It specifies the security requirements and the classification guidance necessary for the contractor (or a subcontractor) to perform on a classified contract. So, under the contract, the contractor has to roll down a DD Form 254, and you can submit credentials for your clearance if you don’t already have a facility clearance or the appropriate clearance for that contract. What I’m finding now – unlike before – is that a lot of government agencies will want you to already have a clearance. You can get it as a subcontractor, if you come under a prime contractor who can roll down the DD 254 requirements, and you can start the process to get the clearance. But, if you don’t have a contract, you’re not going to get the clearance.
Q: How factoring can strengthen your government business:
Systematically, a 30-day mandate may, in practice, extend the payment cycle to 45-plus days. Consider the process of creating invoices internally; submitting them through various government systems, such as Wide Area Work Flow; the approval process; and EFT payment delays. Companies that seek government business need the ability to scale up and down with contract availability, which is why receivables factoring works so well for contractors. It supports ample cash flow that aligns with the accrued timing of your expenses.
Ask any CEO what the main challenges of their business are and in the top five will likely be attracting and retaining top talent for their business. Being able to provide your clients’ access to top talent in their industry can set your staffing agency apart from others. Even if “top” talent is for a warehouse or clerical office work, the bottom line is you need to be able to meet your obligations as a staffing company to your employees – and the main one of these obligations is being able to make payroll without fail.
Reliably making payroll is one of the biggest challenges of running a staffing agency. You may not get paid in 30-60 days, but your employees need to be paid every 7-15 days. With today’s margins being more compressed by competition, it’s likely you don’t have a big stack of cash lying around to help you wait those 30-60 days for your customers to pay! So how do you retain top talent, maintain your margins and run your business well? Payroll funding through invoice factoring may be the answer.
With invoice factoring, you no longer have to wait 30-60 days to be paid. A factoring company, like Triumph Business Capital, will purchase your accounts receivables less a small percentage so you can get your cash quickly to make payroll. By using Triumph to bridge that 30-60 day gap, you can confidently grow your business as much as possible, knowing that payroll needs will be met.
Triumph also provides back office solutions such as checking credit on new customers and helping you collect your invoices. Triumph has over 10 years of experience in helping clients with their invoices. Add to this that we’re part of a regulated bank and a public company (NASDAQ: TBK) and you can rest assured your account will be in good, professional hands.
Don’t confuse invoice factoring with a loan. It’s scalable to your business. It grows with you…and almost as important, it shrinks with you too. Think about it: if you take on a loan to service a large account and that account then goes away, you still owe the money on that loan. With invoice factoring, because it’s all based on your invoices, it grows and contracts with you, leaving no debt to slow down your business’ growth.
The freight broker life can be a stressful life. You spend your days as a middle man working with shippers and carriers to get loads from point A to point B. Stress really sets in when it’s time for your carriers to be paid, but the shipper hasn’t paid you; because, let’s be honest, to retain quality carriers, you need to be able to pay them fast and consistently.
Sure, you can pre-pay your carriers, but you would need to have a lot of cash on hand. This option is hard for most freight brokers, because not many have that kind of capital lying around. Not to mention the strain that pre-paying carrier puts on your cash flow!
There is another solution to keeping your freight brokerage rolling – invoice factoring.
With freight broker invoice factoring, you sell your invoices to a factoring company for a small percentage, allowing you (and your carriers) to get your money fast. This solution keeps your quality carriers loyal to running loads for you. This kind of solution really can set you apart from the thousands of other brokerages out there.
With freight broker factoring, you can grow your business at your pace, and your financing will grow with you. Invoice factoring is a scalable financing option. Factoring isn’t like a loan that can overwhelm you with a heavy payment during a slow month. Also, there is no pre-determined limit on how much you can factor. You are only limited by the number of invoices you have to sell.
It’s also much more than just quick money to you and your carriers. Established invoice factoring companies, like Triumph Business Capital, provide a back office for their clients. Calling your shippers to chase down payments no longer has to be on your to-do list, because collection calls and services are included with your factoring relationship with Triumph.
Building credibility among carriers can also be a long road to haul when you are a broker trying to grow your business. Triumph Business Capital offers you a way to build your credibility while using their factoring services. When you factor with Triumph, you will automatically earn a green check mark on the DAT load boards, showing every carrier on the load board that you are financially stable and partnered with the industry leader in invoice factoring.
Freight broker factoring can be the key to an efficient freight brokerage, allowing you to pay quality carriers consistently and quickly.
When they’re done right, phone interviews can save time by pre-screening candidates and provide information you won’t find in any resume. Done poorly, they can be awkward, impersonal, and ultimately ineffective as a screening tool. These 10 Tips will help you become a more effective interviewer, and narrow down candidates before face-to-face interviews:
1. Be Prepared.
You wouldn’t go to a job interview without learning a little about the company — so don’t conduct a phone interview without familiarizing yourself with the candidate’s background. Before your call, block out some time to review the candidate’s resume, LinkedIn profile, and any other relevant information.
2. Be curious.
If you work at a staffing agency, chances are you’ve seen a lot of resumes. Make the resume review process more interesting by cultivating curiosity about the person you’re interviewing. As you review the profile, jot down any questions you have.
3. Choose a quiet place.
More and more, people are conducting business outside of the office, and there’s no reason why you can’t do your interview offsite — just make sure the location you choose is quiet, and has good connectivity. Loud coffee grinders, barking dogs and poor reception can be distracting.
4. Stay focused.
Ever had a phone conversation with someone who is reading an email or browsing the Internet at the same time? It’s about as frustrating as a dinner date with someone who’s glued to their phone. Resist the urge to check email, read status updates or conduct other business during an interview.
5. Be brief.
Phone interviews are meant to be more efficient than face-to-face interviews, so try to limit your call to no more than 30 to 45 minutes. We’ve heard this referred to as the 5/20/5 rule: spend about five minutes introducing yourself and the company you represent, and describing the position. Then, spend about 20 minutes interviewing. Use the last five minutes of the call to answer questions from the candidate, and communicate next steps.
6. Ask thoughtful questions.
You already have the candidate’s resume — so ask questions that dig a little deeper. For example, ask about short-term and long-term career goals. Ask about financial and personal goals, too. The answers may provide practical information (the client is open to relocating to another city), financial insights (they need upward mobility to be happy) or clues about cultural fit (they want a better work/life balance). Questions like, “What career accomplishment are you most proud of?” and “What qualities are most important to you when seeking a new position?” provoke more thoughtful answers than, “What did you do at your last job?”
7. Ask about likes and dislikes.
Everyone likes to talk about strengths. No one likes to admit weaknesses. A good way to get around the classic interview question, while still getting the information you want, is to ask candidates what professional tasks they like and dislike most. People usually enjoy doing things they are best at, and dislike tasks where they feel less competent. If your candidate dislikes a task that’s a major part of the prospective job, you’ll know it’s not a good fit.
8. Listen more than you talk.
It’s good to be forthcoming and answer relevant questions. However, be sure to keep the focus on the candidate, and do more listening than speaking. The good thing about this approach is that you can relax and worry less about what you’re going to say. After all, the interview is not about you: it’s about them.
9. Take notes.
Staffing companies conduct countless interviews, and it would be unreasonable to expect you to remember every detail you discussed. Instead, take notes during your call. This way, you can share the information you learned with other people involved in hiring decisions.
10. Say thanks.
Thank the candidate for their time, and let them know you’ll follow up.
Staffing companies bridge the gap between job seekers and employers, and when you prepare well for your a phone interviews, you’ll create a more favorable first impression for both parties. At Triumph Business Capital, we’re committed to helping staffing companies like yours succeed. Need help with funding or capital expenses? Call us any time.
Sandra Walls is President and CEO of AIL Logistics Solutions, a multimillion-dollar, Memphis-based, service-disabled veteran-, woman- and minority-owned company that provides diverse logistics and technical support solutions to government and commercial clients. A retired Lieutenant Colonel in the United States Air Force, Ms. Walls joined the company after serving 22 years on active duty as a logistics officer, managing supply and fuels accounts while making military history everywhere she commanded. She offers a real-world perspective on government contracting based on leveraging her military experience and built on doing what it takes to excel.
Q: What propelled you into the government-contracting world?
It was a carryover of my military experience; I was in the Air Force for 22 years. I’ve worked in a contracting agency. And my goal in developing my business was to take what I learned on active duty and continue providing those services in a for-profit capacity. Our company was first established by a group of military veterans with the intent of supporting and providing organic support capabilities to the Department of Defense (DOD), primarily in the fuels arena. Our plan from the beginning was to engage in federal business, primarily with the DOD. The business has continued to evolve, although we have diversified and are doing commercial business as well.
Q: How difficult is it to become a government contractor?
It’s actually easy to become a government contractor. You register your business by first obtaining a Dun and Bradstreet number and then entering your business information into SAM.gov, the primary database for vendors doing business with the federal government. That’s a piece of cake. The challenge, as in the commercial world, is doing all of the things required to operate and market your business. The government process can be a little bit longer, and it’s very, very intensive. But once you get started, and you get to understand the process, it becomes easier.
Q: What advice would you give someone who is considering orienting their business toward earning government contracts?
There are pros and cons. On the government side, there are some benefits. For example, when others were having problems during the recession, and most of my business was with the federal government, my contracts did not go away. The worst case is when we do go through budget issues and they still don’t make decisions, but rarely have I had any of my contracts impacted dramatically.
There are other things they do well. When larger companies offer a request for proposal, some are less detailed in specifying what they want to see. For example, government contracts will specify the minimum items expected in a response to their RFP. They also provide their criteria on which they’ll evaluate you. If you miss all that, then it’s bad on you, because they’re telling you upfront what their expectations are. In the commercial world, they may not do that. So oftentimes, when bidding as a small business, people may get thrown out because they don’t have that level of depth and experience in understanding how to write an effective, winning proposal.
However, on the commercial side, I don’t have to deal with the tons and tons of paperwork. I don’t have to wait months for an answer on whether or not I will bid. I don’t find it a challenge waiting on budget decisions to know when I will make an offer. It’s not as painstaking a process.
Q: Do companies that work with the government have a pretty even balance between government contract and other work, or do a majority focus on one area or the other?
Based on the companies I’ve dealt with and met, there’s not a lot of diversity. They’re either all commercial or all federal. On the federal side, there are some programs based on designations such as 8(a) certified small-business, woman-owned, veteran-owned, disabled-veteran owned, minority-owned, Native American-owned, etc. The government must set aside a certain percentage of contracts for businesses with these designations. 8(a) is a wonderful nine-year business development program – I graduated from it last year. It’s another opportunity to grow your business.
But oftentimes, a lot of business owners get into that space and don’t venture outside it. They don’t diversify into the commercial side, so when they graduate from the program, they’re not prepared to compete in the outside world. Some are not following through on its guidance or recommendations, because the program is really structured to support your transition from reliance on 8(a) sole-source contracts. It encourages you to compete in different environments and to diversify your business in both federal and commercial markets. And there’s a plan you should submit nearly every year to address how you’re going to do that.
Q. What types of contracts are most important to your business?
Most of my business is now coming from the commercial side, whereas before more of my business was coming from the federal. I’ve got both sides that I’m working at the same time, and I now have one person who does the government contracting and another who works the commercial contracts.
Q: What are your thoughts on prime contracts? Are they worth pursuing?
They’re worth it. Being a prime contractor is good in that you’re the train driver. I prefer to grow and to be respected as a prime contractor – to stand on my own, to be able to do what I have to do. As you build your experience and your past performance, you’re better positioned to go out on your own, rather than depending on someone else to get you in the game. I’m not against being a subcontractor at all, as long as the money is there, and I’m allowed to do my job. Regardless of whether I’m a prime or a subcontractor, I focus on making sure I’m serving my client and giving them the quality of support and service that they deserve.
Q: What is the value of being a subcontractor versus a prime contractor?
It depends on where you are and the nature of the work you’re doing, but I think it’s always a good idea to try to do some subcontract work. It helps you learn what’s involved, and it’s important to diversify your business. There are definite advantages to being a sub. Work to build a relationship with a prime contractor so that wherever they go, they take you with them. I know a woman in Texas who has grown her business just by being a subcontractor. She’s operating in the $50-$60 million range by forging those relationships.
Part of our strategic goals has been to team with people in reciprocal relationships, where I can be a subcontractor to them, and they can be a subcontractor to me. Large businesses typically cannot bid on a small contract unless they’re in a joint venture/protégé relationship. It pays to position yourself with a company where you can have that reciprocal relationship. That’s ideal.
Also, when you meet a prime contractor, like a large company that’s willing to make you part of their team, make sure you don’t get boxed in. If they see you as a supplier of only one kind of product or service, you’ll end up a one-time player. They should have the confidence in your skill set and your ability to do the work to keep you in their bids.
Q: What challenges are involved in responding to a solicitation?
Initially, the paperwork requirements may be frightening, but once you get into it and understand all the different sections, you get used to it and it’s not as hard. Certain parts of a solicitation never change. For instance, you have to declare your socio-economic certifications, whether you’re woman-owned, minority, service-disabled veteran, in a HUB zone, all of the above. Those are blocks that you check, and some of it is automated and online, so a contracting officer can look up that information or you can submit it with your proposal.
The biggest challenge is responding to the technical piece, normally in Section C – the Statement of Work. That’s where you have to really “answer the mail” – tell them how you’re going to go about doing the job, what processes are you going to put into place to make the system work, or how will you improve their processes or enhance their bottom line. Whatever they ask you to do or provide, do it. If you don’t provide the information requested, you may get kicked out of the running.
Q: Do you have a proposal writing team to handle that work? If so, do you recommend that approach?
We’re not large enough to have that kind of dedicated proposal writing team. Depending on the size of the contract, you can find people who make a living putting together proposals, but in my experience, it’s an expensive undertaking for a small business. As we’ve evolved, we’ve applied that concept internally. We may assign a proposal manager to be responsible for the proposal, to capture the data from different possible areas and then consolidate it into a document that everyone reviews and plays a part in preparing. Now that I have a dedicated person on the government side of the business, he’s helping to pull together proposals and he loves to do it, so that’s brought a lot of value as we’ve grown. And, there are some agencies, like SCORE through the Small Business Administration, that will provide support, but they don’t write the proposal for you. They can provide some guidelines, help direct you, but for the most part, you have to wing it. You learn from experience.
Q: Unless you win a contract, how do you know if your proposals are on-target?
One of the cool things with federal contracts is something I haven’t seen on the commercial side: Contract officers are required by law to give you a debrief, offering feedback on how you did. Some things they are not privy to tell you. But their assessment can help you do better in terms of improving the quality of your proposals and help you better prepare for the next one.
Q: How difficult is to obtain security clearance for contracts that have security requirements?
The Federal Acquisition Regulation (FAR) requires a DD Form 254 to be incorporated in every classified contract. It specifies the security requirements and the classification guidance necessary for the contractor (or a subcontractor) to perform on a classified contract.
So, under the contract, the contractor has to roll down a DD Form 254, and you can submit credentials for your clearance if you don’t already have a facility clearance or the appropriate clearance for that contract. What I’m finding now – unlike before – is that a lot of government agencies will want you to already have a clearance. You can get it as a subcontractor, if you come under a prime contractor who can roll down the DD 254 requirements, and you can start the process to get the clearance. But, if you don’t have a contract, you’re not going to get the clearance.
Even in the age of social media, there’s no substitute for real relationships.
With today’s online load boards, social media networks, and nationwide WiFi, it’s possible for a freight broker to schedule a load without ever coming face-to-face with the carrier. You might not even have to pick up the phone. However, just because it’s possible doesn’t mean that you should.
The most successful brokers build their businesses the old-fashioned way: by creating and maintaining relationships with people they trust. Getting to know carriers is good for both parties. You’ll gain the confidence of working with someone you can count on. And they’ll feel better about working for you, which may translate to more favorable rates. This doesn’t mean you shouldn’t use technology. Load boards can be incredibly helpful in forming contacts and finding carriers for hard-to-fill needs. Still, nothing beats a real network of reliable people. Here are three tips to help build carrier relationships:
1. Listen to Your Carriers.
Listening is key to any relationship — whether you’re asking your spouse about their day, or asking a carrier about their last load. Start new business calls by asking questions, and listening to the answer. Ask carriers which lanes they prefer, and what weights they typically haul. Are there any routes they would they like to run, but aren’t currently hauling? Maybe you can help fill a deadhead section in their route, or contact them when you have a load near their home. Carriers will appreciate the fact that you asked, even if you can’t accommodate them immediately.
After a load has been delivered, follow through by asking your carrier whether everything went smoothly. If there were problems, address them quickly. And, if the carrier liked the lane, perhaps you could make it a recurring route.
Beyond business, show carriers you care by remembering personal details. You might consider creating a list of carriers with notes on each one, and referring to it when you call. A conversation that begins with, “Hi, Bob. How are the kids? You enjoying that Texas heat?” seems a lot more personal than “Are you available Wednesday for a load coming out of Fort Worth?”
2. Build Trust and Loyalty
Now that you’ve noted preferences, contact your preferred carriers first when matching opportunities become available. This shows loyalty. And, if your carrier isn’t available, they may refer you to another trustworthy carrier, filling the need and expanding your network.
Loyalty improves relationships — and it may save you money. For example, it may be tempting to choose cheaper carriers to raise profits, but if service is poor, you may end up losing business in the long run.
You can also build loyalty by reaching out to carriers throughout the year — not just when you have business for them. Many companies send cards or small tokens of appreciation to customers — such as a tin of popcorn or cookies — during the holiday season. For a more personal touch, note carriers’ birthdays, and send cards. It’s an inexpensive gesture, but it can go a long way.
3. Be Transparent.
If you make promises to a carrier, be sure you can keep them. If rates change, tell your carriers why. And, if you are considering using another carrier because of pricing, let your preferred carrier know. He or she may be able to work with you. Sometimes communicating the reason for a rate change, such as the season, supply and demand, location, fuel cost or miles, can help a carrier understand your point of view and avoid an awkward conversation.
Building relationships with carriers takes time, but it’s worth the effort. Of course, carriers also value relationships with brokers who pay quickly and reliably. If you need assistance with capital funding, contact Triumph Business Capital. We look forward to forming a mutually beneficial business relationship with you.
The weather outside is frightful, but these winter trucking tips should make your drive a little more delightful.
First, preparing for your drive starts before you even get on the road with a pre-trip inspection. You should already be completing a pre-trip inspection, but with winter road conditions, it’s recommended that you check your vehicle more often. Remember that this inspection includes tires, wiper blades, fluids and lights. If one of these parts doesn’t work properly, it is a bigger problem in winter weather.
Imagine a tire going out in the snow or your lights not being seen because of all the grime from the road covering them. Also, keeping at least half a tank of fuel in your truck is important. The more fuel you have in your tank, the less condensation builds in your fuel tank.
After your pre inspection you will want to have items packed in case of the worst:
• Proper clothing (layers, gloves, rain gear, and a coat)
• Extra food and water
• Bag of sand
• Windshield washer fluid
• Windshield scraper
• Jumper cables
• Tire chains and/or traction mats
• Reflective vest
• Cam Lock T-handles
• Kneeling pad
• Emergency flares
Now it’s time to plan your trip. When determining your route, take note of truck stops and weather patterns, so you take the safest route possible. If you typically drive the same lane, start taking note of these stops in the spring and summer before winter weather appears. To get up to date information on the weather through your phone, you can download the Weather Bug app. It has a radar that can keep you updated on winter weather ahead.
When you head out on the road, watch your speed. Wherever you are going isn’t as important as your life or others. You will have more time to react if something happens, which also means you need to watch your spacing. Keep a good following distance so you can respond to whatever may happen on the road.
Brake and accelerate lightly. Whatever is out on the road can become an even bigger issue if you are stopping and accelerating at high speeds. This is especially important because black ice can exist out on the road. One clue to black ice is noticing that the spray from tires on vehicles in front of you has stopped.
Be extra careful in the mountains, because weather can change rapidly. Obey all signs, especially in the mountains so you can be as safe as possible.
As truckers, you know how to drive in this weather, but one thing to be concerned about that you can’t control is the other drivers out on the road. Even though you can’t control how they drive, you can control how you drive around them. Drive defensively. Keep your distance in case you need to react quickly and have a heightened sense of awareness.
Lastly, if you find yourself stranded on the road, stay in your truck. Grab the blanket and coat you packed and stay moving to keep warm. Keep your exhaust pipe clear of snow and crack a downwind window for ventilation. Also, you should run your engine for about 10-15 minutes per hour.
If you find yourself on the road in bad weather conditions, don’t be afraid to get off the road. Use your best judgment, because your life is the most precious cargo you are carrying.
I love a classic Christmas movie, and one of my favorites is How the Grinch Stole Christmas. The Grinch lives high on a mountaintop away from all the villagers of Who-ville. To ruin their Christmas, he decides to sneak into town while they are all celebrating Christmas to steal all of their gifts. In the end, the Grinch’s heart grows seeing that the lack of gifts didn’t impact the villagers’ Christmas cheer.
However, we wouldn’t be so lucky with the real Grinches of the holidays, cyber criminals.
Like the Grinch, cyber criminals love to attack when we are distracted by the cheer and excitement of the holidays. With consumers looking for the best deals for the holiday season, cybercriminals see billions of dollars’ worth of possibilities. According to comScore’s quarterly State of Retail report, in the third quarter of 2015, Americans spent $69.7 billion online. If a cyber-thief infiltrated your systems, your small business could be down for days or weeks. You could experience a loss of customers and much more.
Here are the top scams of the season so your small business can be prepared against the real grinches:
Amazon is the top e-commerce site in the world, and cyber thieves are using this to their advantage. They are sending phishing emails to Amazon users that claim some accounts have been hacked. The email starts with “Important Notice” and asks that you “verify” your account by providing your personal information. By providing your sensitive information, you are giving them a gateway into your pocketbook. With the excitement surrounding the Star Wars premiere this month, cyber criminals are using the opening as an opportunity to target fans. Through phishing emails, cyber thieves are tricking fans into entering to win free movie tickets. With both of these phishing email schemes, it’s important to remember to think before you click.
With more people going online for their shopping needs, cyber criminals are taking advantage of a typical transaction. They are using fake shipping notifications to gain access and install malware on your system. Before you click on the tracking number, ask yourself have you ordered something recently that matches this shipping notification? If not, don’t click on the link in the email.
The holiday season is the time many choose to give back to their communities and to charities. Before your small business makes a donation to a charity, do your research. Many cyber thieves create fake charities to receive the donations of those desiring to give back.
Free gift offers
You’ve seen it before; you’re scrolling through social media or a website, and you see an offer for a free gift if you just “click here.” Don’t click. That click could help install malware on your device. Also be aware of those letters in the mail that will send you a $500 check in exchange for your personal information.
The tech support scam is becoming increasingly popular, and it can be detrimental to your small business. During the attack, someone will call you out of the blue acting as tech support. If you weren’t expecting a call from tech support or don’t recognize the company they represent, hang up. Here are some helpful tips to remember when it comes to tech support:
- Don’t allow a third party who calls you out of the blue to control your computer.
- Don’t rely on caller ID in this situation. Criminals can spoof the ID, allowing you to think they are from a legitimate company
- Don’t rely on searches to find a helpful tech company. Scammers place ads and have high search rankings so you can fall into their trap. Use the software packaging to find the best number to
- reach the company.
- Don’t give your credit card information to a tech support person.
- Never give someone your password over the phone.
Just like the Grinch swooped in without notice and took all of Who-ville’s belongings, cyber criminals can infiltrate your small business when you least expect it. The last thing you need as a small business owner is a cyber-attack during the most wonderful time of the year. Be aware of grinches this holiday season.
MC numbers. MX numbers. FF numbers. Soon, they’ll all be gone. In the near future, all interstate motor carriers will need just one number to complete the Federal Motor Carrier Safety Administration’s (FMCSA) registration process. Read on to find out why the change is happening, who is affected, how to maintain compliance, and when to take action.
Why the change?
The current carrier registration process is complex, involving different numbers and processes for different carrier types — and many carriers still submit paper forms. It can be time-consuming to track individual carriers using disparate systems, and the government wants to phase out inefficient paper processes.
The FMCSA’S new Unified Registration System (URS) will streamline and simplify things, merging multiple systems, numbers and forms into a single, electronic online process. Once it launches, all carriers will be identified solely by their USDOT (Department of Transportation) number. This simple approach will make it easier to obtain operation authority and maintain compliance. It will also save an estimated $9 million for the FMCSA and the trucking industry, over the next decade.
Who is affected?
All interstate motor carriers, freight forwarders, brokers, IEPs, HMSP applicants/holders, and cargo tank manufacturing and repair facilities under FMCSA jurisdiction will need to comply.
What action must I take — and when?
- Carriers Currently Registered with the FMCSA:
If you already have an MC USDOT, or FF number, you don’t have to do anything yet. The change is so big and sweeping, the FMCSA is rolling it out in phases — and currently registered entities are not required to make any changes until September 30, 2016. Continue using the current agency forms and processes to apply for additional registration authority, make administrative filings, and update your registration.
- Special Entity Requirements:
If you’re a private HAZMAT or exempt for-hire carrier, you must provide proof of financial responsibility beginning December 31, 2016. In addition, you must have BOC-3 filings in place beginning December 31, 2016. New applicants will begin providing this information September 30, 2016.
- New Carriers:
New registration applicants will be required to use the URS online registration application sooner — beginning December 12, 2015. Because it will take some time to transition from the old system to the new one, only new applicants will be able to use the online URS at this time.
Where do I go to get my number?
Online. Once the URS is in effect, paper forms will no longer be accepted. However, we can’t give you the url yet — it’s not ready. The FMCSA recently published an extension to their original deadline for the website launch, citing the need to implement multiple provisions.
Dates to remember: Biennial updates
Once you begin using the URS, you will be required to update your information biennially (every other year). So, how do you know which year and month to do so? The answer lies in your USDOT number itself. Here are the guidelines:
- If the next-to-last digit in your USDOT number is odd, you must update your information in the odd-numbered calendar year.
- If the next-to-last digit in your USDOT number is even, update your information in the even-
numbered calendar year.
- To determine the month in which you must update, look at the last digit of your USDOT number.
“1” means January, “2” means February, “3” means March, and so on. Oh, and “0” means October. We know what you’re thinking. What about November and December? Those are double-digit months. Well, don’t worry — there will be no updates in those months.
- Special exclusions: If you change your name, address, or form of business, you must update your information within 30 days of the change.
We know — it’s a pain in the bumper. But if you don’t complete the biennial update, your USDOT number will be deactivated.
The URS may seem confusing, but once it launches, we’ll be on the road to a more efficient, simpler process (To learn more, visit the FMCSA website.) At Triumph Business Capital, we’re committed to serving truckers. Follow us on Twitter and Facebook to stay up-to-date with the latest in the industry!
What’s worth more — your money or your time? If you’re considering filing a patent on your newest invention, you could be spending a lot of both. However, conducting a thorough patent search as early as possible could save you time and money in the long run. We recommend contacting a patent attorney before you make a formal application; but professional services can be expensive. With a little time (and a lot less money), you can do a preliminary search on your own. Here’s how:
Figure out what type of patent you need.
This first step is fairly easy. There are three categories. Choose the one that best describes your invention:
Utility: Any invention with a useful application. For example, a new type of wireless communication technology, building construction material, or waterproof fabric.
Plant: This category describes any new plant species, such as a hybrid orchid or seedless tomato.
Design: These types of patents are for decorative products, such as a Texas-shaped waffle maker.
Research keywords that describe your invention.
Here’s where things get tricky. In order to search for similar patents, you need to identify words or phrases that describe your invention. If you don’t select the right keywords, you could be falsely led to believe that your product is unique — when, in fact, someone else may have already thought of it. So, start brainstorming by considering the following:
What is it?
What does it do?
What materials is it made of?
How is it used?
Who does it serve?
Write down any keywords that come to mind.
Find the applicable classes and sub classes.
Visit United States Patent and Trademark, and you’ll see an alphabetical list. Use this list to search all of your keywords. For example, if you invented a type of lamp, click “L.” When you see your keyword, i.e. “lamp,” note the numbers next to the keyword, separated by a “/” symbol. The first number indicates the class. The second number is the subclass. Write these numbers down, then click each page to view additional additional relevant classes or subclasses. Note these, too. If you’re not sure what a subclass entails, click “Show Definition View” to learn more.
Search Patents and Patent Applications.
Go to patft.uspto.gov to access the Patent Full Text and Application Full Text databases. This step will show you similar patents and patent applications. Review the results, and make sure other inventions don’t look too much like your idea.
Next, check the Cooperative Patent Classification (CPC).
This newer system will eventually replace the United States Patent Classification (USPC). So, it can be helpful to identify the CPC classification number that corresponds to the USPC numbers that are on your list. To do this, visit the United States Patent and Trademark Office, choose USPC as your classification system, and click on “Statistical Mapping from USPC to CPC” in the “Select Content” field. Once you identify the relevant CPC numbers, you will need to go back to Step 4, and search patents under these numbers as well.
Almost there — now, check with the Patent and Trademark Resource Center (PTRC) library.
If you do discover a very similar invention, it’s unlikely that your patent will be granted. This can be disappointing — but not nearly as disappointing as it would be if you had paid an attorney to do this search for you. Assuming you did not find something similar, we recommend one last step before you call your lawyer: visit a Patent and Trademark Resource Center (PTRC) library for a final check. Most states have at least one PTRC. You can search for your nearest center online, make an appointment, and go from there.
You can find a more detailed version of the information in this article here. If you’re able to file a successful patent, we congratulate you — and we want to hear about it! Triumph Business Capital specializes in helping small businesses get the capital they need to fund big ideas. Our invoice factoring services can turn your unpaid invoices into cash, so you don’t have to waste time or money waiting to collect on your accounts. Let us know how we can help.
Last year, the U.S. government shelled out $447.6 billion in contract spending. Want a piece of that action? Becoming a government contractor definitely has its benefits, but if you’re thinking about taking the plunge into performing government work, it’s important to weigh the pros and cons first.
Pros of Becoming a Government Contractor:
In general, government contractors can expect to be paid more than government workers doing the same job. However, since contractors are not government employees, you won’t get the generous benefits for which full-time government workers are eligible. If you own a small business and you’re considering applying for a government contract, you can expect to receive fair market compensation or better — but you will be competing with other vendors who submit bids for the job.
Fortunately, you can find out exactly how much the government has paid for similar jobs in the past by searching the Federal Procurement Data System. (Unlike private sector customers, the government shares its spending history. After all, it’s funded by taxpayers — so they figure you have a right to know how much you spent.)
If you like the idea of working for the world’s largest employer, but don’t want to be employed by the government full-time, contracting can be a great way to go. You do have to abide by the terms of your government contract. However, once the work is over, you can choose to end your business relationship with the government if you decide it’s not for you. Or, you may wish to court the business of a different government agency. The flexibility of government contracting, compared to full-time government employment, lets you test the waters of performing government work, with relatively little risk.
The government wants to work with small businesses — and you’ll find a bevy of online resources available to help you navigate the process of government contracting. For starters, try the Federal Business Opportunities website, the Government Contracting Small Business Development Center (SBDC), and https://www.fbo.gov.
Opportunities for Special Designation Businesses
Are you a Woman-Owned Small Businesses, Small Disadvantaged Business, or Service-Disabled Veteran-Owned Businesses? These are just a few of the special designations that can qualify you for preferred consideration when applying for government contract work. Learn more by visiting the website for the Office of Small and Disadvantaged Business Utilization.
Excellent Payment History
The government has a high credit rating, and a solid history of paying its bills. For small businesses, this is a big benefit, providing reliable cash flow.
Cons of Becoming a Government Contractor:
While the government is a reliable customer, it can be a bit slow to pay. Fortunately, companies like Triumph Business Capital can help with cash flow while you’re waiting for payments to arrive. We specialize in providing invoice factoring for government contractors, and can get you paid up-front, which can help with interim expenses.
Rules and Regulations
It’s no secret: government contracting involves a lot of rules. When you become a government contractor, you will be asked to abide by precise specifications when responding to the Request for Proposal (RFP) — but that’s just the beginning. If you’re approved for the government contract, you may have to submit to government-approved accounting systems, purchasing methods, project management tools, and more. It can be helpful to evaluate the costs of complying with these regulations, weighed against the benefits of financial gain, before applying for any government contract.
Your financial records may be audited at any time by the government — but becoming a government contractor may expose you to even more scrutiny. Be sure your ducks are in a row, and you’ll have nothing to worry about.
As with any contract work, government contractors can be fired at any time. Because of this, being a government contractor does not imply the same stability often associated with being a government employee. However, if you are able to fulfill the terms of your contact to the government’s satisfaction, it’s unlikely that you will be let go before its completion.
Triumph Business Capital provides a range of services for government contractors. If you decide that government contracting is a good fit, let us know how we can help.
Good pay. Control over your hours and benefits. Less time behind the wheel — and more time with your family. There are many reasons to become a freight broker, especially if you have a history of working in the trucking industry. According to payscale.com, freight broker salaries can range from $30,015 – $72,756, and a majority of brokers report being highly satisfied with their jobs. If all this sounds good to you, we’ve got good news: applying for freight broker authority may be easier than you think. Here’s how:
First, apply for your USDOT (Department of Transportation) number.
You’re going to need it on a lot of other applications, so it will speed things up if you get it ahead of time.
Next, register with the Federal Motor Carrier Safety Administration (FMCSA).
You’ll need to fill out the OP-1 Application for Motor Property Carrier and Broker Authority, to receive your MC number or FF number. There is a $300 filing fee that must be submitted, along with your application. You can file in one of three ways:
Online: You must have a credit card to process your online application. However, this method is faster than others.
By Mail: You can complete and print your OP-1 form and mail it to the address on the form, along with payment. This method doesn’t require a credit card, but it is a bit slower.
By Phone: You can request the form by calling 1-800-832-5660. It will be mailed to you, and you can then complete it and return it by mail. This option is good for people who don’t have Internet access, and/or aren’t comfortable using the Internet. However, it’s also the slowest method. It can take up to four weeks to process your application by mail.
Obtain a Surety Bond and apply for proof with the FMCSA.
Freight brokers are trusted by both shippers and carriers — so it’s essential that you’re properly insured. This protects you and your customers. In the event that a shipper is unable to pay for a shipment, the freight broker is responsible for paying the cost. And, if you’re unable to pay, your Freight Broker Bond (BMC-84) will act as insurance, covering the expense. To apply for a bond, you’ll need to submit an application to a reputable insurance firm, which will conduct a background check and credit check. The cost to obtain surety bonds for freight brokers may range from $1,800 and $10,000 a year, for $75,000 of coverage. Once you receive coverage, your insurance provider will need to provide proof of that coverage to the FMCSA.
Designate a Process Agent.
Within 90 days of receiving your MC or FF number, you will be required to designate a process agent for any state in which you will do business. This will be someone who represents your company and can receive documents in the event of legal action.
Receive your License.
Step 5 is the easy one — and it’s also the most exciting. It’s a great day when you receive your License of Operating Authority. This means that you can begin doing business as a freight broker. Welcome to the world of Logistics. We wish you a safe and successful journey.
Want to learn more about being a freight broker? You’ll find lots of information on the Triumph Business Capital blog. We can also help you access capital funding to grow your new business, through our invoice factoring services. Want to learn more? Give us a call.
If someone were to ask me what app I use most on my phone, it would have to be my banking app. I am constantly checking my account. Some might find this obsessive, but I was a victim of a data breach a year or so ago, and I am not going to let that happen again. In 2013, Target was a victim of a cyber theft and ended up owing $67 million to financial institutions for the costs incurred. In 2014, Michaels stores experienced a data breach that impacted around 2.6 million cards. You may think because you are a small business that hackers aren’t interested in your network, but think again.
Because small businesses don’t have the defensive structure that larger businesses have, cyber criminals see them as easy targets. Think about it: How much do you rely on the internet for your day-to-day operations? If someone were to get into your network, how much would it cost you to be out of business for a day, week or even months before you get the issue resolved? Here are some numbers the National Cyber Security Alliance tabulated about small business online security:
- 45% of small business owners do not provide Internet safety training to their employees
- 77% don’t have a formal written Internet security policy for employees
- 52% have a plan or strategic approach in place for keeping their business cyber secure
First, determine what areas you are most at risk for a cyber-attack, and then you can be proactive so if you become a target, you have a line of defense.
But how are the cyber thieves getting into my small business?
Yes, the thorn in the side of every email inbox, spam mail. It seems like no matter how many filters you place on your email, spam still gets through. By opening spam email, you are putting your company at risk for viruses and malware.
Use common sense when opening your email. Were you expecting something from the sender? Before clicking on links or opening attachments, did you expect to receive these files or links?
Phishing attacks can impact you or your customers by trying to obtain your personal data, like Social Security numbers or other financial information.
Cyber criminals can do this through fraudulent emails that trick customers by sending emails that look like they are from a reputable company or even your company. Then, the email takes the individual to a website to enter their personal information.
Cyber thieves can also send an email that installs a keystroke program on the receiver’s computer. They are then able to obtain the information that user’s type on their computer.
Lastly, they can take over the web address of a company, and then take them to a fake site where they enter in personal information.
How can you protect your small business?
- Keep your systems up to date- If your computer and other systems have the latest software and are up to date, then your risk is greatly decreased. With many software programs, an automatic update option is available. This will help you stay current without putting more on your plate.
- Scan, scan, scan- It never hurts to scan your system to see what has been downloaded to your computer. You may never know what a site has placed on your computer when you visit it.
- Monitor yourself- Google your business. Google your name. This gives you insight into who might be trying to imitate you to obtain customer personal information. Another way to prevent these types of attacks is purchasing domain names similar to yours, including common misspellings. Limit the ways cyber criminals can imitate you to your customers and the marketplace. Max’s Sporting Goods store sells sporting equipment to teams and individuals. Because of the nature of his business, he has access to personal information of his customers, and could be a target of cybercrime. To watch out for potential threats, he should Google the name of his business “Max’s Sporting Goods” frequently to see if sites come up that are imitating his business. If his website is at maxssportinggoods.com, he might also consider buying the .biz and .net counterparts and misspellings of his current domain name (example: maxssportingods.com) to prevent someone from imitating him in the first place.
- Report attacks- If you do find that a cyber-attack has occurred, report it. You wouldn’t let a burglary go unreported, would you? You can report cyber-attacks at Stay Safe Online powered by the National Cyber Security Alliance.
As your company’s activities increasingly move online, your risk becomes greater for a cyber-attack. Before you become a Target or Michaels, play it safe and create a cyber security plan for your business. Murphy’s Law applies to cyber-attacks; the more prepared you are, the less likely you will be a victim of an attack.