8 Ways to Use a Working Capital Loan for Your Trucking Business

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There are many people who turn to working capital loans in order to fund their businesses. It is likely that many of your competitors have also taken out such loans in order to expand their companies.

8 Ways to Use a Working Capital Loan for Your Trucking Business

A short-term business loan can help solve cash flow problems that have stalled your growth. Although many other loan types involve complicated application processes, working capital loans are often approved quickly.

Here, we will discuss some of the ways that you can use a working capital loan in order to fuel your trucking business.

Bridge Payment Delays

Some of your business partners may be lenient when it comes to payment delays, provided you can pay them in the upcoming weeks. However, insurance enterprises, utility companies, and credit card processors tend to follow protocols to the letter.

Expect a myriad of fees and exorbitant interest rates if you fail to make your payments on time. Working capital loans are usually cheaper than having to pay high interest fees and payment delay penalties.

Pay Staff

As your business continues to expand, your payroll costs will rise substantially. Also, while your team may be excellent in many different areas, you may not see an immediate return on your investment. Revenue lag problems can be solved by using a working capital loan in order to bridge payroll gaps. You should also retain employees who bring the capital back into your trucking business.

Stock Up on Inventory

Inventory may sometimes be a liability instead of an asset. As well, there are times where you may be forced to overstock. For example, you may need to buy in bulk in order to enjoy a substantial discount. You may also be entering the busiest season of the year, or planning on launching a new product.

Sales and promotions should be looked at as an ideal time to expand your capital resources. However, it is important to ensure that your product liability does not affect other areas of your trucking business.

To illustrate, imagine you are a trucking contractor. You determine that you will need funding for just a few weeks at a time. You then decide to take out a working capital loan in order to buy materials and fund startup projects.

Once you have completed your projects, you use some of the money made to pay back the loan. The end result is there are no high interest costs or long-term debts to worry about. You also decide to revolve the money on a monthly basis, which will save you a large amount of interest.

Help Weather the Storm

Many businesses rely on busy seasons in order to keep their companies afloat, and the trucking industry is no exception. Whether you are directly involved in the trucking industry or simply provide services for them, you may begin to feel the heat during low-capital periods of the fiscal year.

Thus, consider a working capital loan as a contingency plan for a worst-case scenario. You may want to think about incorporating the price of the loan into your bookkeeping. Then, when pickings become slim (which is inevitable) you won’t have to worry about stockpiling your resources. Save for a rainy day by taking out a working capital loan in order to weather the storm.

Market Your Trucking Company

One of the biggest reasons for taking out a working capital loan is to help advertise one’s business. After all, you need to spend money in order to make money, so a working capital loan can be used to fund marketing efforts. For example, you can use the money to source community publishing and outreach, social media campaigns, event sponsorship, and even test new marketing strategies.

You can also outsource to an advisor, or hire marketing analysts to help you create the perfect ad campaign. Another option is to buy expert analysis tools yourself in order to devise your marketing plan in-house.

Hire the Best

If you want to get an edge on your competitors, you need to empower your team. You can help pad the roster during the busiest times of the year to avoid employee burnout. You can also hire top experts in your field in order to assemble a dream team to one-up your competitors. In life, you often get what you pay for. To attract and retain top-tier employees, you must offer them a superb compensation package.

A working capital loan can be used to enhance the benefits of your workers. You can also use the capital in order to improve your working environment, or to offer your employees better pay to keep them happy and motivated.

Operate Optimally

It is important to monitor and assess the weak areas of your trucking enterprise before you take out the loan. There are likely inefficient tools, bottlenecks, and certain processes that are causing problems on a routine basis. You can use the working capital loan to educate your staff.

Teach them how to avoid costly problems that will require workarounds in the future. Help augment or ameliorate your current business tools in order to boost efficiency and lower costs.

Test the Waters

You can evade a lengthy loan application and qualification process by taking out a working capital loan. Approvals tend to be far quicker than conventional loans, and they can be used to test the waters before going all in.

For example, some companies may take out a conventional loan in order to acquire expensive equipment or finance new facilities before performing the necessary market research. Use your simple working capital loan to perform research that will generate revenue. You can also use it in order to establish brand presence or even to help soften a market.

Truck Loan Center

If you would like to take out a working capital loan in order to finance your trucking business, then please visit our website or call us at 1-866-230-0094.


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