Challenges facing trucking companies
While other industries might find ways to get past temporary cash flow concerns, narrow margins make this more challenging for transportation and trucking companies.
For one Liquid Capital client, a transportation company’s large client started by paying invoices on 30-day payment terms. The company built its business plan, cash flow and projections around this timeline.
Two months later, the client stretched payment terms to 45 days, then 60. After four months, the trucking firm was being paid consistently at 90 days, which, combined with small margins, made it almost impossible for the firm to succeed.
In these conditions, just one additional expense or missed invoice payment in a month can derail financial plans and projections for an owner/operator.
When delayed invoice payments from customers affected the ability of Serna’s Trucking to quickly pay subcontractors, Liquid Capital’s invoice factoring not only provided the working capital the company needed to meet its immediate cash flow needs — but also a partnership that has allowed the business to grow to the next level.