The importance of commercial factoring companies is really easy to understand, once you understand what invoices are and what they mean to businesses in the United States. Right now, the transportation industry is currently on the rise across the nation. Thanks to the expansion of e-commerce, online markets must transport products across the country. Therefore, these factoring companies are really important.
Across the transportation network, there are 12 million vessels moving goods. This includes rail cars, locomotives, and big commercial trucks as well. Invoice factoring services will help this industry grow and can help provide more jobs. So small business factoring is important, as is invoice funding. Here are all of the facts on the importance of commercial factoring companies.
What Do Commercial Factoring Companies Do?
Transportation businesses rely on invoices to pay their truck drivers. The invoice comes from the recipient of the delivery. However, these invoices are not always fast to transfer and are often paid late. As a matter of fact, studies show that over 60% of all invoices are not paid on time but are instead paid late. This can do serious damage to the hiring abilities of small business and more.
Late invoices make it hard for a business to pay employees. Therefore, commercial factoring companies and trucking factoring companies can help business. Simply put, factoring can help convert invoices into payments immediately. There is no waiting and businesses will not have to worry about any cash flow problems. After all, no business can have success if there are cash flow problems involved. This delays payments to workers which can potentially lead to workers quitting on the spot.
Estimates show that small businesses as a whole could hire almost 2 million more workers if their invoices were paid on time. This number of workers would reduce unemployment by over 25%. This data is more than enough evidence to show just how beneficial and important commercial factoring companies are to the United States economy.
Commercial Factoring Companies Are Vital To Businesses Success
The technical definition for a small business is a business with 500 employees or less. These types of businesses make up almost 100% of all United States businesses at a whopping 99.7%. As a result, it is really easy to understand how small businesses are important and vital to the economy. Well, small businesses cannot have success without commercial factoring companies. Consequently, commercial factoring companies are really important!
A study was conducted by the United States Bank. This study revealed that over 80% of all businesses that fail do so as a result of serious cash flow problems. Well, one of the biggest causes for cash flow problems comes from late invoices. So all of the data and information points to the true value of businesses using commercial factoring companies.
According to the Federal Motor Carrier Safety Administration, approximately 5.9 million commercial motor vehicle drivers operate in the United States. while this is an impressive amount of drivers, there could be more. This would help get more Americans working and fewer Americans collecting unemployment and out of work. So there are so many great benefits for businesses that decide to get in a partnership with some type of commercial factoring companies.
There are nearly 28 million small businesses in the United States as of right now. These businesses are the backbone of American society and provide incomes for the owners and all workers. Plus, these small businesses often build a sense of local community that is positive and creates harmony amongst citizens. So if commercial factoring companies can help small businesses then it should be supported and encouraged.