In 2022, the U.S. Department of Transportation reported there were 1.1 million for-hire trucking companies, 718,594 private carriers, and 153,191 for-hire/private carriers. Of those companies, 95.7% have no more than 10 trucks. Small trucking businesses make up a major part of the trucking industry.
Small trucking companies also face bigger hurdles, but that doesn’t mean they will get driven out of business by the bigger players. With the right business strategies, a small trucking company can thrive.
Stop Waiting for Payments
Freight factoring is one of the best business strategies. Partner with an expert in factoring and get advanced payments on the money you’re owed. You pay a small fee for this service, usually less than 5%, which is well under a credit card interest rate.
While there is a fee, you have the money you’re owed immediately. Depending on your bank, you usually have the money within two or three business days. Some factors provide same-day payments. Imagine what you can do with that money.
In the past, a trucking company’s owner mailed an invoice, which could take a week to reach the client. The client set that invoice with all the others and typically paid them at the end of the month, that meant a trucking company could be waiting over a month to get paid. Once the check was written, it could take a week or longer to arrive in the mail. Add another week or so for the bank to process and clear the check.
Even today, clients may still wait until the end of the month to make payments. The payment can be sent electronically, so it’s faster, but there’s still a wait.
Freight factoring works differently. Submit a bill of lading to Saint John Capital and get paid the same day if you have the fuel card. As long as you submit the bill of lading by noon EST, same-day payments are an option.
Click & Pay API
Another benefit to freight factoring for small trucking companies is that there is Click & Pay API available. Instead of having to mail a check, a client clicks a button and pays instantly through an online portal. It’s secure, it’s fast, and it provides everyone with the paperwork needed to prove the payment was made and received.
You also have an invoice you can generate and upload to your bookkeeping software. It makes it very easy to handle a lot of your bookkeeping duties without needing a lot of office staff or equipment.
Save Money on Fuel
Many freight factoring companies have business debit cards that you can sign up for without having to go through a credit check. Those cards often have perks like fuel discounts. Imagine fueling up and getting a few cents off per gallon.
If you had a 2-cent discount, you’d save $2 every 100 gallons. If the card also offers cash back incentives on things like restaurant or grocery purchases, you’ll save even more. The savings add up over time.
Find Loads Software
One of the biggest mistakes a trucking company can make is to drive routes with partial loads. If you or your driver is going across the country with only half of the trailer filled, you’re losing money. Instead, use a find loads app to look for other loads that need drivers.
Suppose you’re hauling half a trailer from Boston to Las Vegas. You pull up a find loads app and look for other loads that are being dropped off somewhere between Boston and Las Vegas. You find one and can apply to take it. You now have a full trailer, doubled the income, and don’t have to go out of your way to get and drop off the second load.
On the return, you don’t have to drive with an empty trailer. Look for loads going from Las Vegas to Boston. Apply for those offering a rate you agree with. You now get money for the return trip, too.
Free Credit Checks
As you use find loads, you don’t want to automatically sign up for a job with a client you’ve never worked for. You need to do your research. Use free business credit checks to see if the client pays on time, has a good reputation, and isn’t notorious for never paying. Free credit checks make it easy to do your research and partner only with reputable brokers and shippers.
A small trucking company needs to be able to answer client questions quickly. Track loads apps make this easy as you can pull up the app, check a driver’s location, and share the information with your client.
If a client wants to make sure they have a warehouse worker on-site to open the gates to the docs, real-time information is essential. Track loads software offers that feature.
Another benefit to track loads apps is that you can see where your drivers are, check traffic conditions in the vicinity, and alert them if there are any construction zones, accidents, or weather issues that are causing traffic jams. If they’re going to be stuck in traffic, you give them time to get off and take a break or find an alternate route.
Low-Interest Lines of Credit
Sometimes, the smartest way to grow your business is by taking out a line of credit, but you need to make sure the interest rate is as low as possible. Saint John Capital helps its clients secure business lines of credit at low rates. It gives you the funds you need to upgrade your trucks, pay for necessary truck repairs, or have a pad in case of an emergency.
You can also use a business line of credit to build a positive credit score. When you’re just starting out, you may have a low score until you’ve proven yourself. Use a line of credit to make small purchases, pay them off responsibly, and watch your credit score rise.
Partner With Saint John Capital
Saint John Capital’s first transaction took place 26 years ago. Over the past two decades, we’ve helped customers grow their businesses from tiny fleets to businesses with national reach. We pride ourselves on offering the lowest rates, the best trucking technology, and complete transparency.
Talk to the freight factoring experts at Saint John Capital. We’ll advise you on how we can ensure you get paid the same day or within a day or two instead of waiting for weeks or months. We’ll also go over the other benefits we offer such as Saint John Capital Visa’s with special features like gas discounts.