The most visible and substantial impact of the novel coronavirus, so far, has nothing to do with the actual physiological effects of the illness. Instead, it’s the reaction to the virus that has had the most significant impact.
It should be noted that the reaction we’ve had to the virus – shutting down schools, temporarily closing businesses, working from home, etc. – has been necessary for slowing down the spread of the virus. If the number of coronavirus patients in critical care exceeds hospital capacity, the global healthcare system becomes virtually useless. If that happens, staying out of restaurants and bars will be the least of our worries. We must make sacrifices now to prevent a total collapse later.
These sacrifices are, however, leading to an unprecedented economic slowdown. Many sectors are already feeling the heat. Any business that relies on gatherings of people is sure to have months of painful financial struggle ahead of them. The companies that supply those businesses, too, will have to contend with an immense erasure of their core business.
This is particularly noticeable in the trucking industry. Many trucking companies that specialize in providing supplies to the restaurant and hospitality industries are in serious trouble as volume plummets. With far fewer customers than usual, restaurants, hotels, and event venues are slashing orders for supplies. As a result, their suppliers are cutting their orders from raw materials factories. Trucking companies, which previously moved these goods back and forth, are now finding their trucks parked for the foreseeable future.
However, while some trucking companies are faltering, others are picking up steam. Amazon orders are through the roof, and grocery stores are finding it hard to maintain their stock of dry foods and paper goods like toilet tissue and paper towels.
As these companies scramble to keep their supplies up, the trucking companies that supply them must keep pace by adjusting schedules, adding personnel, and maintaining quantities.
As of right now, the novel coronavirus virus has split the trucking industry into a stark dichotomy: While some companies struggle to maintain profits, others struggle to keep up with demand. In industrial districts all over the country, one lot sits with unmoving trailers, while the one next door bustles with activity. A boom and bust, at the same time.
Neither of these situations is entirely hopeless, however. While it may seem like busting truckers may crumble, and booming truckers will burst at the seams trying to keep up, they both have options for getting out of this challenging situation.
The two sides of the trucking industry can relieve their respective situations by using the same financial concept: invoice factoring.
Invoice factoring is the act of selling longer-term accounts receivable to gain access to near-term cash. Let’s explore how this can help trucking companies, regardless of whether they’re booming or busting.
No one knew the extent to which COVID-19 was going to rock the global transport of goods. As such, trucking companies that now have little to no prospects for new contracts (such as restaurant suppliers) may have older, unpaid invoices that represent assets that can be sold to an invoice factoring firm like TCI Capital for instant cash. This cash can be used to pay employees and stave off debt for the next few months as this blows over.
Similarly, trucking companies that need to double their workforce or add more trucks to their fleet as soon as possible can do so with the cash they get from invoice factoring. This will allow them to react more quickly to growing demand and keep up with the companies they supply.
Invoice factoring is a great, often under-utilized tool for businesses in financial tight spots. Best of all, it’s often cheaper than securing a loan or issuing equity. Since equity requires forgoing constant future cash flows and debt leaves one with principal repayments and interest, many business owners find that selling unpaid invoices is the most effective and inexpensive way to get fast cash.
How does one go about factoring? As it turns out, it’s rather easy! Whereas getting a loan requires waiting on approval from a bank that might never come, and selling equity is a months-long process, invoice factoring can be as fast as same-day cash!
All you need to do is request a quote from TCI Business Capital, and our qualified invoice factoring consultants will take care of you! You can also check out our invoice factoring calculator to estimate how much cash you can get today!