Invoice factoring has played a role in the trucking industry since its early days. After World War II, the expansion and improvement of highways in the United States and Canada helped the transportation industry become vital to North America. Freight transportation experienced a major surge, resulting in banks and independent firms offering factoring arrangements for the trucking companies.
Factoring became a well-established form of financing.
From the 1960’s up through the 1980’s, the trucking industry evolved as a major essential industry. There was a pretty high increase of the amount of trucking companies during this time. This increase of competition not only caused an increase in the trucking companies’ rates, but it caused some trouble trying to secure traditional funding. Factoring provided an advantage over the restrictive aspects of a banking line of credit. This allowed invoice factoring to move even further forward as a beneficial cash flow solution, increasing its popularity as a form of financing.
Factoring is still a great financing tool today.
One of the advantages and best feature of invoice factoring is the continuous level of cash flow it brings a business. Invoice factoring is the only financing tool directly linked to a business’s sales. The more invoices a company issues, the more access it can have to immediate cash through a factoring company.
Many leading companies in North America have been avid users of this financing option. Although a common industry to use factoring is the transportation industry, it’s well-suited to many different industries across the board. To find out more about how factoring can work for you, contact us today.