The True Cost of Bank Loans

The True Cost of Bank Loans

There are few elements of a small business’s operation that are as crucial as the direct flow of revenue into the company. When a client fails to submit payment pursuant to the terms upon which you both agreed after you have already committed the labor and resources to uphold your end of the contract, the consequences can be swift and severe. The loss of expected income can leave you or your company unable to meet the demands of creditors and to keep a fleet on the road making deliveries as promised.

If you are up against a cash flow problem and are thinking about obtaining a bank loan to close the gap, we would encourage you to take a closer look at freight factoring. There are a number of potential drawbacks to a bank loan that are simply not present with truck factoring. To learn more, contact the truck factoring professionals of TBS Factoring Service, LLC, at 1-800-207-7661.

Bank Loans: Beyond the Fine Print

Throughout the history of modern corporate finance, when a business has needed money to continue with operations, the most commonly sought source of funding has been through the extension of credit or loans from a bank. While this is a viable solution in some cases, it makes less sense for a trucking company than does freight factoring. The following reasons represent just a small sampling of why factoring should be considered preferable to bank loans:

  • Factoring does not propel you further into debt
  • You will be liable for fees and interest in addition to the borrowed amount
  • If you obtain a bank loan with the intention that it will be a temporary fix, the next time you encounter a nonpaying client you may find yourself again in need of borrowing
  • The inability to pay back the loan pursuant to the terms of your agreement can have an adverse effect on your personal or business credit rating, depending upon how it was obtained

Contact Us

To learn about the many advantages of freight factoring, contact the truck factoring professionals of TBS Factoring Service, LLC, at 1-800-207-7661.