Every business needs working capital to boost profits, and trucking companies are no different. With the right capital, transportation businesses can purchase additional vehicles, invest in loading machinery to streamline operations, purchase real estate for warehouse storage or hire more drivers to take on new delivery routes. Here are a few excellent tips for financing trucking-related purchases:
Invest in Resources To Grow Profits
It can be tempting to keep your operation small or limited to a few local areas. However, to generate increased revenue and have solid cash flow, companies need to continue expanding and finding new customers. To do that, you need to spend working capital on things that increase your capabilities. For long-haul trucking businesses, this likely means purchasing additional vehicles or buying high-tech diagnostic equipment that lets your mechanics take care of all preventative maintenance in house. Everything from trailers to semi-trucks benefits from working capital.
Identify Your Needs
Every transporter is different, and so are the costs associated with investments. Before using valuable capital, figure out what items deliver the best economic results for the money invested. For example, companies that transport construction equipment, raw materials or things such as concrete may see a huge return on investment from purchasing another dump truck or cement mixer. The right transportation equipment can effectively double your possible workload and allow you to take on multiple projects simultaneously. It can also equip your company to bid on much larger projects and reap the economic benefits.
Select the Right Type of Financing To Fit
There are many different types of financing available from modern lenders. Each one has specific advantages for purchasing the equipment, real estate or inventory needed for growth. For example, equipment financing is a huge help for buying costly heavy machinery, since it uses the machinery as collateral and offers incredible interest rates. Small Business Administration financing can help smaller operations get the vehicles needed to stay competitive or have an edge against other trucking businesses.
Don’t Be Discouraged By Less-Than-Perfect Credit
If your company doesn’t have the best credit rating, that’s not an obstacle to securing working capital. There are plenty of trucking financing options that adapt to less-than-optimal credit, such as asset-based lending, SBA loans, and merchant cash advances. Alternative methods provide financing quickly and can help you deal with sudden emergencies such as a roadside breakdown. They can also be used to pay taxes, pay invoices, make repairs, make employee payroll or adapt to seasonal business needs.
The potential for trucking is amazing. The growing U.S. economy depends a lot on transportation to thrive.