Freight Forwarder – Factoring Will Solve Your Cash Flow ProblemsFreight forwarders often run into financial problems because of the difficulty in managing their cash flow. There are a lot of obligations that these companies have to pay such as warehouses, carriers, suppliers, utilities and so forth. The slow rate by which their customers pay their forwarding services cannot keep up with the rate by which they are being billed by their suppliers and creditors. Therefore, when the time comes that a freight forwarder is unable to pay his warehouse rent, or his carriers or his suppliers, he is liable to close his business.
What Freight Forwarders Usually Do
To keep up with their financial obligations, freight forwarders usually juggle their funds to make ends meet. They may also arrange for slow payments of their bills with their suppliers and creditors. However, all these temporary solutions create bigger problems and may lead to lack of credibility. Ultimately, it will affect his credit standing with his banks and other financiers.
Thankfully, there is an effective financial remedy that can solve this problem. Every freight forwarder who is experiencing financial difficulties can take advantage of the financial services being offered by factoring companies.
A factoring company can provide a cash-strapped freight forwarder with the immediate cash he needs. He can then proceed to use this cash to pay off his carriers, suppliers and the rent for the warehouses he is using.
Faster than a Bank
He can get this cash faster than he can take out a loan from the bank. The processing of the factoring company will not take weeks. At the most, it will just be a couple of days before his request for cash is approved.
No Collateral Requirement
Another advantage of going to a factoring company is that they won’t ask you for any collateral. Since you have already issued invoices to your customers, that means you are just waiting for their payments. The factoring company considers your account receivables as your “collateral”. They will then advance the cash that you need based on the amounts indicated in your clients’ invoices. In some cases, the factoring company may even be the one who will collect your payables.
Your Credit History is not Required
The amount of cash that the factoring company will give you is not a loan. Therefore, your credit history, whether it’s good or bad, will not matter. The only thing that matters to them is the total amount of your invoices. They will base the amount that they will give on the figure stated on your customers’ invoices. The credit history that they will be more interested in is that of your clients.
So, if you are a freight forwarder and you are experiencing cash flow problems, your best option is not to run to the nearest bank, but to a factoring company like NeeBo Capital. Their interest rates are the lowest in the industry, starting at 0.59% only. They have very flexible terms and they don’t require monthly minimums.
Why Choose Us?
Rates at 0.59% - 1.5% for 30 days
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General Articles about Accounts Receivable Financing and Factoring:
» 08/01/2012 Debt Financing or Off Balance Sheet Financing?
» 09/15/2011 What to know when selecting a Factoring Company