In 2022, four of the nation’s largest trucking companies filed for bankruptcy due to increasing operating expenses, fuel costs, and wages. Many other smaller companies also went out of business. The economy isn’t stable, and it’s time to worry about your bottom line. This means getting paid as quickly as possible.
You need to start pushing for immediate payments after delivering or picking up a load. If you’re not getting paid fast, you need to. Here are some of the top reasons why it is so important to start looking at ways to get paid the same day or within a couple of days.
The Federal Reserve Keeps Hiking Rates
On March 22nd, the Federal Reserve opted for another rate hike of 0.25%, bringing the federal funds rate to 5%. For a trucking company owner, this means any adjustable-rate line of credit, adjustable-rate business loan, or credit card interest rate is climbing again. In addition, there are hints that this isn’t the last of the rate hikes.
While there are several other reasons it’s important to get paid fast, the rising federal rate is the most important. You already know that your monthly expenses are increasing. Imagine you have a broker or shipper who also has increased interest rates on credit cards and loans and starts paying you later and later. You’re suddenly unable to pay all of your bills on time, so you’re building up late fees and even higher interest totals, and it’s eating into your revenue.
What happens if you suddenly cannot pay your driver’s wages, your business loans, and your insurance? How long could you go on before you’re in serious debt and have no option but to file bankruptcy and shut down your trucking company? The only way to prevent this catastrophic dive into insolvency is by making sure you can pay your bills and business expenses on time, every time.
You Cannot Afford to Lose Drivers
The American Trucking Association estimated there was a shortage of 80,000 drivers a couple of years ago and fell to 78,000 in 2022. Some of that shortage has eased, but it’s still not ideal. Older drivers are retiring, and younger adults aren’t as interested in the industry. Drivers don’t want to be away from their families for long, so they want shorter routes. There are also FMCSA hours of service rules that limit how long a driver can be on the road.
You cannot afford to lose the drivers you have. If you can’t pay them or continue the benefits they’re accustomed to, you could end up with your drivers walking away and finding jobs with your competition. It’s not worth the risk. Get paid quickly to ensure you have the money needed to pay wages and any benefits you provide.
Your Credit Rating Impacts Your Trustworthiness to Others
Are you trying to find more clients? If you are struggling to keep up with your bills, your business credit score takes a hit. As it decreases, you might lose potential clients. You’ve found a job in your area that is ideal, and you really need the work, but the broker or shipper checks your business credit score and has concerns. They choose a competing driving company instead. Being unable to pay every bill on time has cost you.
If you get paid on time, you can pay bills and debt on time, which keeps your credit score up. The end result is that it shows potential clients that you are reliable, and that’s how you grow your business.
Stress Impacts Mental and Physical Health
When you can’t pay your bills and struggle to keep your drivers, you’ll become stressed. That stress impacts your mental and physical health, which can drive up your healthcare expenses and impact your immune system. It may seem trivial to you, but stress can soon become overwhelming and make you moody and hard to deal with. In the long run, it may drive clients and workers away.
The other problem with stress is that there are ties between excessive stress and chronic health issues like heart disease, depression, and migraines. Can you continue to complete your duties as a trucking company owner if you’re dealing with health issues and unmanaged stress? It’s just not worth it.
What Are Your Options to Ensure You Can Cover Your Expenses?
One option is to increase your trucking rates. While this will make up for rising interest rates and other business expense increases, it also makes it harder for your established clients. They may not be able to afford to pay you more right now, so you risk losing their business. Can you afford to lose valued clients right now?
The better option is to look into freight factoring. Instead of invoicing your brokers and shippers and waiting for them to get around to paying you, get paid instantly by Saint John Capital. You get paid when you pick up or deliver a load. It’s easier to do than you might think.
Submit your bill of lading to Saint John Capital for processing. The team will process your bill of lading and send you the month if the request is approved. If you have a Saint John Capital business Visa, payment can go right to the card, sometimes the same day if you submit your bill of lading by the noon EST deadline.
If you have the money sent to your bank, it usually arrives within a day or two. There’s no more waiting a week or two for the check to arrive in the mail, more time for the bank to process that check, and time for the check to clear your client’s bank. If you’re tired of the old way of getting paid that could take weeks or even months to get the money you’re owed, freight factoring is the solution you need.
When you do factor your invoices, Saint John Capital takes the amount owed on the invoice and subtracts a low factoring fee. After that factoring fee is removed, you’re sent the balance. There are different arrangements. You might have a 50% advance that’s sent to you when you pick up a load. Or, you could wait and submit the bill of lading after you’ve safely delivered it and get 100% minus the freight factoring fee.
The fee you pay for freight factoring is much lower than today’s prime interest rate. You could pay interest rates that currently average 23.65% or an invoice factoring fee that’s a fraction of that. It makes sense to stop using your credit card to cover expenses until you get paid. Get paid quickly using Saint John Capital’s freight factoring services. Sign up today and learn how easy it is to get started.
