How To Use A Transportation Business Finance To Ensure Growth?
Every business is unique in terms of its operational and monetary requirements. Today, there are plenty of business financing options with different repayment terms, credit score requirements, loan tenure etc., to make sure every business gets a chance to pick the one that best suits its requirements. When it comes to transportation businesses, more specifically trucking companies, there are commercial truck loans and alternative financing options, which give the borrowers access to funds needed to improve, grow or simply run the businesses.
Among the various options available, SBA loans, Equipment Loans, Business Line of Credit, Merchant Cash Advance, known for offering same-day loan approval and Invoice Factoring are considered the most beneficial financing options for trucking companies. When it comes to the list of start-up business loans or finances, that start-ups with short trade history and low credit scores find easy to acquire, MCAs usually top the list, primarily, because of their lenient credit score requirements and same-day approval policy. Also, MCA lenders generally don’t require the borrowers to put up their assets as collateral. All they require are the 6-12 months’ income statements of the business to make sure the borrower is capable of repaying the advance with a stable cash inflow. Hence, an aspiring entrepreneur, looking for a loan to start a business in the transportation sector, or one who has just stepped into the industry and requires funds to expand, often finds alternative financing options like MCAs, and Business Line of Credit Invoice Factoring etc. immensely helpful.
A substantial cash flow not only helps to preserve working capital but also enhances the existing services and ensures an improved competitive edge. Trucking business loans allow the owners to focus on the prime aspects of their businesses without worrying about budget constraints. But, if the entrepreneur is incapable of strategically planning the expenditures and keeping a track of the same, business finances with the most convenient repayment terms and tenure cannot save the boat from drowning. Hence, it is extremely crucial to know how to strategically use trucking business loans to grow a business.
7 Ways To Strategically Use A Trucking Business Finance To Ensure Growth:
Expanding the trucking Fleet
As the return on investment is generally higher when the fleet is large, it is always advisable to expand the trucking fleet to earn good money. Companies that operate large fleets usually get better mileage rates, which lowers the total shipping costs. Also, a larger fleet often reduces the expenses of commercial vehicles, truck trailers, load boards, permits and insurance, fuel and tolls. Hence, a trucking company owner should consider expanding the existing trucking fleet once he/she has enough funds in hand.
Hiring more skilled drivers
Drivers are the most valuable assets of a trucking company, as they are the ones who drive the vehicles from one point to another and make sure the delivery or shipment is made on time. However, hiring and training new drivers is quite a costly affair. Besides, helping them acquire commercial drivers’ licenses, and permits, providing them with employee insurance, uniforms, personal equipment etc. often drains a lot of money. Hence, funds acquired from trucking business finances can be used to seamlessly carry out recruitments and training programs.
Updating Trucking Technology
Technology is advancing at a lightning speed and trucking technology is getting updated rapidly, fuelling the steady growth of the industry. Hence, to keep up with the industry standard, a trucking company owner should use trucking loans to acquire the latest fuel management systems, telematic systems and GPS tracking devices. Also, the funds can be utilized in repairing malfunctioning equipment, replacing outdated machines with the most technologically advanced ones or integrating a bit of automation in the operations to increase efficiency.
Enhancing the business logistics
Logistics greatly contribute to the performance of the fleet and the shipping costs. By investing in load boards, truck shops, repair facilities, warehousing, customer care and billing office, a trucking company can enhance its logistics competence and save money on shipping.
Paying for weather-related expenses
Weather plays a crucial role in the trucking business. Harsh winters often require the shipping trucks to be equipped with durable winter tires, which, usually, don’t come cheap. Trucking business finances make the borrowers capable of paying for the weather-related expenses.
Investing in marketing campaigns
Marketing is the process of making people aware of a company’s existence and getting them interested in the company’s offerings. Hence, it is considered the most critical business operation. To market a transportation company, one needs to publish sponsored posts on social media, and invest in SEO, and conventional advertising, especially billboard ads on highways. A strategic marketing campaign not only helps in brand positioning but also increases a company’s reach. Considering the cut-throat competition in the trucking industry, one should try to come up with unique marketing strategies and invest a substantial amount in campaigns to make his/her company stand out in the crowd.
Improving and increasing the services
The transportation industry is quite versatile. Eyeing the versatility, a trucking company should keep on improving the existing services or adding new ones at regular intervals, as per the demand.