Funding for Independent Truckers: How to Find Loads & Get Paid

You have an owner-operator who drives a truck they’ve purchased and has to do all of the paperwork, marketing, licenses/certificate/registration applications and requirements, and invoicing. Independent truckers tackle a lot more when it comes to running their business, but not quite as much as an owner-operator.

Independent truckers lease their truck through a dealership or third-party company and contract with a company to get work. They build their own schedule and choose the loads they take. They don’t have to do all of the DOT paperwork as they operate their truck using another company’s DOT authority.

They must find their own work, pay for their own fuel and repairs, get their own insurance, and handle their business finances on their own. That makes it a lot more work than driving for a company. The key is to get paid in a way that creates the steady flow of cash needed to become a success.

Problems Independent Truckers Face

There are two main problems when it comes to working as an independent trucker. The first is that it takes time to find loads. You have a lot of responsibility running your independent trucking business. Working continually to find enough loads to provide the income you need is time-consuming. 

The other problem is in building a strong cash flow. The trucking industry is notorious for ups and downs throughout the year. Some seasons are busier than others. It’s hard to manage a business when you also have clients waiting 30, 60, or 90 days to pay you. Fast payments are key to making your business succeed.

What Are the Best Funding Options for Independent Truckers?

When you need money and lack the savings, what can you do as an independent trucker? The first is a business line of credit or equipment loan from a bank or credit union. As these are loan products make sure you can afford the payments. 

Credit cards are another way to pay for some expenses. As a benefit, you may qualify for perks like cashback rewards or fuel rewards, but credit card interest rates are extremely high. American Express’s Business Plus card has APRs ranging from 18.49% to 26.49%. Capital One Spark Miles for Business has an APR of 26.24% and also an annual fee of $95 that’s waived the first year.

Freight factoring is a service independent trucking companies should consider. You’ve delivered a load and have the completed bill of lading. Typically, you’d use that to generate an invoice, send the invoice to the broker or shipper, and wait for payment to arrive, which on Net 30 terms could take a full month.

Waiting an entire month to get paid is rough and a big reason why so many trucking companies end up relying on credit cards and lines of credit to cover expenses until they get paid. The interest eats into your revenues.

Instead, work with a freight factoring company. You sell your unpaid invoice for a small fee and get paid that same day. The fee depends on different factors, including how many loads you haul, the number of trucks, and whether you choose a non-recourse or recourse arrangement, which are as follows.

Non-Recourse – If your broker or shipper fails to pay an invoice, you’re not responsible for repayment if that company shuts down or goes into bankruptcy unexpectedly.

Recourse – You are responsible for repaying your cash advance if the invoice goes unpaid.

How Do You Find Loads?

Finding work is important. You could work with a freight broker who is a middleman for finding you high-paying loads and negotiating rates for you, but you pay a fee for this service. The fee may offset the higher rates, which makes them no more valuable than doing the work yourself sometimes.

Government loads pay some of the highest fees you’ll find. There are things to consider, however. Once you arrive at a destination, you might wait days to unload. That means you’re unable to get back out on the road and to the next job. You need to make sure the rate is high enough to cover the amount of time you’re sitting around waiting.

The final and often best option is to continually check load boards. TBS provides free access to Search4Freight, a freight load board that’s updated every day in real-time, which makes it easy to find a steady amount of work. You can filter jobs by location, type of work, and rate to make it easy to find the perfect match. Once you’ve found a potential job, enjoy the added security of running a free business credit check to make sure the company pays on time.

You should also network as much as you can. Attend industry events, trade shows, and popular truck stops to get your name out there and into brokers’ and shippers’ hands. Have business cards printed out and hand them out. It also helps to market your business using a professional website and social media accounts that you update regularly.

How Do You Ensure You’re Getting Paid on Time?

When you agree to haul a load for a client, negotiate the payment terms upfront and in a manner that cannot be disputed later. Get everything in writing in the clearest way possible. If you want Net 30 payment terms, make sure that’s listed. You could have the broker or shipper have to initial each key term in the contract to ensure they read and understand those terms.

Once you have it in writing, make sure you are complying with that company’s requirements on invoicing. Don’t leave out a piece of information they said was required to be listed on the invoice. If you’re supposed to include a copy of the bill of lading, make sure it’s included and legible.

Give a friendly reminder before the bill is due. You can set up emails to do this. If it’s late, call and remind the company, again being cordial. Don’t go in with the proverbial guns blazing. They could simply have forgotten and feel horrible that they paid you late. Excellent customer service is a good way to get high praise and word-of-mouth referrals.

TBS Factoring is the ideal solution for independent truckers as we ensure you get paid on time and provide access to load boards that make it easy to find work. Plus, you can request an unlimited number of business credit checks to ensure the client you’re considering contracting with isn’t notorious for late or skipped payments. You have powerful tools at your fingertips to help you make wise business decisions.

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