In a perfect world, no organization would be in a situation where they need access to cash flow to cover their payroll expenses before their own accounts receivable come in. Unfortunately, we don’t live in a perfect world.

Oftentimes, circumstances beyond your control get in the way. Maybe there was a situation where a job didn’t go as expected. Maybe a client is taking too long to pay for their own reasons. Regardless, payroll funding in freight is there to meet your needs so that you can meet your obligations, no matter what.

What is Payroll Funding?

As stated, payroll funding is a type of service that offers companies immediate cash flow to cover payroll expenses as needed. Think of it as a type of short-term financing designed to make sure you’re able to meet your obligations to keep your business moving forward, regardless of what life happens to throw at you.

How Does Payroll Funding Work in Freight?

When you work with a payroll funding provider, the first thing you do is submit the outstanding invoices that you have to your partner of choice. These are invoices for work that you’ve already performed and are awaiting payment from clients, or that are a part of a similar situation.

Your payroll funding partner will then provide you with a percentage of the invoice value in advance. This can be a way to cover not only your payroll needs but other operating costs as well.

When the client pays the invoice, the payment is not directed to your business, but to the payroll funding provider.

At that point, everything can be reconciled, and you can keep things running smoothly. Typically, any fees that you are assessed are calculated based on the amount of the outstanding invoices.

Advantages of Payroll Funding

For smaller organizations in particular, the biggest advantage of payroll funding comes by way of immediate access to cash flow. Payroll obligations don’t wait just because a sudden winter storm hit your area, causing a delay in work. With payroll funding, you can meet your obligations while still giving your clients the time they need to meet theirs.

Flexibility is another major advantage of payroll funding, as it’s an easy way to adapt to ever-changing business conditions. Payroll funding isn’t something you’ll need to leverage every month, or even regularly. But when the need does arise for whatever reason, it’s always an option worth exploring.

This can also lead directly to one of the long-term benefits of payroll funding: superior business growth. With your own cash flow free, you can now invest in other areas of the organization where that money can make the most impact. It can be a way to purchase new equipment, or even to expand your fleet. The point is, that you can suddenly take advantage of opportunities as they arise instead of watching them pass you by.

Another long-term benefit comes by way of the credit improvement your business will often enjoy. Payroll funding is a way to demonstrate that you’re able to reliably keep track of your financial obligations. The longer you’re able to do that, the better your credit rating is – leading to better opportunities as a result.

Disadvantages of Payroll Funding

Of course, none of that is to say that payroll funding in freight is the perfect solution for every business. As always, you need to consider your specific needs when making a decision – especially regarding financial matters.

When you participate in payroll funding, you’ll always have a certain level of dependence on the provider you’ve selected. That’s why it’s so critical to do your due diligence ahead of time to make sure that you’re finding a partner that will operate with your best interest at heart.

Payroll funding is not free, and some companies may have an issue dealing with the long-term costs. But again – this is not something that is intended to be used on anything other than an as-needed basis. If you find that you need payroll funding often enough to where the costs are eating into your ability to function, you likely have issues elsewhere that you’ll want to investigate.

How to Qualify for Payroll Financing

Qualifying for payroll funding is ultimately a straightforward process that isn’t that different from applying for something like a loan.

You’ll need to provide documentation that your business is in sound working order, for example. That includes business licenses, financial statements, proof of outstanding invoices, and more. Your creditworthiness will also be assessed during this time.

The quality of the invoices you’re submitting will also need to be of a certain record. If the invoices you’re submitting are from clients who have an established history of not paying in full, the chances are slim that a payroll funding provider will want to take on that risk.

What to Look for in a Reliable Payroll Fund Provider

When looking for a payroll funding provider, the first thing you’ll want to research is a company’s reputation. Read reviews and, if you can, speak to past clients to make sure you’re finding an organization that you’re comfortable with.

You’ll also want to compare providers in terms of fees, interest rates, and the other elements that go into their terms of service. This is absolutely one of those situations where you need to prioritize transparency above all else.

Customer service is also critical. If you have an issue, you want to make sure that you’re never more than a phone call away from someone who will be able to help.

Finally, you’ll want to look at the speed at which funding will be available to you. Part of the appeal of payroll funding is that it is a fast way to access the cash flow needed to meet your obligations. If a provider isn’t offering the “fast” part of that agreement, you’ll probably be better served elsewhere.

Do You Need Payroll Funding?

Ultimately, the decision of whether you need payroll funding in freight is yours alone to make. If there are other ways to get the money you need with more favorable terms and conditions, you are encouraged to explore them. But for many, payroll funding is a perfect way to meet their obligations, accelerate business growth, and enable financial stability – all at the same time.

If you’d like to find out more information about payroll funding, or if you’d just like to discuss your own needs with a team of passionate and dedicated professionals in a bit more detail, please reach out to the team at Advanced Commercial Capital today.

If you had to make a list of all the professions that are critically important to the United States economy, truck drivers would undoubtedly be right at the top.

Without truck drivers, there would be no supply chain. Essential goods and other items would be unable to make their way across the country, getting into the hands of the people who need them to make the products that will eventually be passed onto consumers.

But as is true in so many other industries, truck drivers are facing a massive shortage that is poised to get worse before it gets better. According to one recent study, about 87% of companies around the world either already have a skills gap that they’re dealing with, or expect to have one within the next few years.

Truck drivers are no different, creating a situation that we would all do well to take seriously while we still have the chance.

Why is There a Truck Driver Shortage in 2024?

The truck driver shortage as it exists in 2024 is actually a long time coming. In 2005, for example, there were an estimated 20,000 positions across the industry that professionals were unable to fill. By 2018, that number had grown to an enormous 60,800 with no end in sight.

As is true with a lot of different industries, there’s no single reason you can point to to explain the truck driver shortage. To fully understand it, you need to view several issues in the context of not only where the industry was and is, but where it is likely headed over the course of the next decade.

Unsafe Working Conditions and Lifestyle Challenges

One of the major reasons why it’s so difficult to find enough people to address the truck driver shortage has to do with lifestyle challenges. Many younger people in particular are taking an increased interest in their health and physical fitness. It’s difficult to argue with a straight face that sitting behind the wheel of a car for eight hours a day on a heavily restricted diet is the healthiest choice you can make.

Unsafe working conditions are also a topic of discussion around the country. Truck drivers can only be behind that wheel for a certain length of time because it’s literally dangerous for them to exceed it. Also, keep in mind that the weather is making things more dangerous in various places. Increasing temperatures and pressure changes have contributed to storms that are so damaging it is almost unheard of.

Unbalanced Pay Scales

Despite how important truck drivers are and how dangerous their profession actually is, many are dealing with unbalanced pay scales – an issue that is certainly not making things look any more attractive to prospects.

According to one recent study conducted by the Bureau of Labor Statistics, the median pay for a truck driver was $49,920 in 2022. To put that into perspective, that works out to be about $24 per hour. There are a lot of other professions that you could explore, even with a limited educational background, and still make comparable wages to most entry-level truck driving positions in particular pay.

Poor Benefits

Along the same lines, you have to consider the high cost of living associated with constantly being on the road. You’re incredibly limited in terms of where you can purchase food from, often being forced to deal with expensive prices at truck stops.

This can often make it hard for truck drivers to establish any kind of financial safety net. When you’re also operating as an independent contractor in many situations, enjoying any type of benefits at all is a responsibility that falls exclusively to you.

Less Interest From Younger Workers

One of the major factors that is exacerbating the truck driver shortage has to do with reduced interest from younger workers, particularly when it comes to long-haul projects.

It’s one thing to try to get someone interested in a job that will see them driving a large vehicle around for hours at a time every day. It’s another thing entirely to convince them that they should take days or even weeks away from their families, even if you’re able to address the pay discrepancies outlined above.

Because of this, many carriers are working hard to try to make their driver schedules as flexible as possible. Long-haul trucking is just as essential as it ever was, but many providers are trying to get their truckers home as often as possible so that they can raise a family and maintain a healthy work/life balance.

How Does This Shortage Affect Factoring?

If anything, the truck driver shortage makes factoring even more important because labor shortages mean invoices will likely take longer to get paid. This can cause you to not have critical funds when you need them, forcing you to let opportunities for growth and other success pass you by.

How Trucking Companies are Combatting the Trucker Shortage

One of the biggest ways in which trucking companies are combatting the trucker shortage involves increased pay and benefits. This is creating a ripple effect in that not only does better pay attract more drivers, but better benefits also help with retention as well. A higher base pay won’t entirely solve the problem, but it will make sure companies are headed in the right direction.

Enhanced training programs can relieve pressure in other areas, too. Not only does this help reduce the number of unqualified drivers you’re dealing with, but it can also make sure they have the knowledge needed to operate as safely as possible while on the open road.

Technology and automation are also regularly being employed, not to replace human truck driver jobs but to support and empower them. The more a company uses automation, the more often a truck driver can be home with his or her family – precisely the way it should be.

Factoring Made Easy with Advanced Commercial Capital

At Advanced Commercial Capital, we understand how important it is to keep money coming in the door of your trucking company. This is especially true when you’re dealing with supply chain disruptions and other elements like the uncertain economic times we’re all living in.

That’s why we want to make factoring as easy as possible, all so that you can worry less about getting paid and more about attracting the talent you need to run the most successful business you can.

If you’d like to find out more information about how the truck driver shortage impacts factoring and other aspects of the industry, or if you’d just like to talk to someone about your own needs in a bit more detail, please don’t hesitate to contact the Advanced Commercial Capital team today.