How to Use Invoice Financing in the Trucking Industry

Matthew Gillman

Updated: October 10, 2018
Transportation loans for the trucking industry

The Freight and Transportation industry is an integral part of the U.S Economy. As reported by the Bureau of Transportation. In 2017, the Freight Transportation industry comprised 8.9% of the nations GDP. As you can imagine, a multi-trillion dollar industry that employs millions of people has an ongoing need for working capital. Invoice financing is the perfect solution for companies looking to maintain a steady cash-flow.

While there are many products available to transportation businesses, one of the most common forms of financing for trucking and transportation companies is invoice financing. In this article we are going to explain what invoice financing is, why it’s commonly used, and explore the process when applying for an invoice financing loan.

What is invoice financing?

Invoice financing is a form of working capital financing that uses your company invoices as a form of collateral for a loan. It’s a great way to accelerate cash-flow by getting paid on your outstanding invoices today, rather than waiting 30, 60, or 90 days for payment. The purpose of invoice financing is to bridge the gap between your accounts payable and accounts receivable, which not only helps with day to day expenses, but helps you take on additional customers and grow your business.

Why is invoice financing so commonly used in the transportation industry?

The two most valuable assets that a transportation business has are trucks and accounts receivables. It’s common that equipment financing or equipment leasing is used when a business is looking to expand and buy new vehicles, but with new trucks comes new employees, more fuel, and the need for working capital.

In order to solve this problem, transportation businesses turn to invoice financing or factoring. It’s common that transportation companies invoice their customers on 30 day terms, which means they are waiting 30 days to be paid on work that’s already been completed. This is a problem because fuel is a day to day expense and truck drivers are paid weekly. As a business owner, you have to figure out how to manage the cash flow gaps, which is not always an easy task.

What is the process to apply for Invoice Financing?

Applying for invoice financing is a fast and simple process that will allow you to receive funding in as little as 24 hours. Your company’s accounts receivables helps determine the amount, and the terms of the financing you qualify for. The invoice itself is the most important part of the application process.

At SMB Compass we have a streamlined process that makes it quick and easy to secure your funding. In order to apply for invoice financing you will need the following:

  • Detailed A/R Aging Report
  • Current Financials
  • Sample invoice and contract with customers


Matthew Gillman
Matthew Gillman is the founder and CEO of SMB Compass, a bespoke business financing company focused on providing financing and education to small businesses across the U.S. The company has provided over $250 million to more than 1,250 businesses. Coming from a family of small business owners sparked Matthew’s passion to not only become an entrepreneur, but also to work with his fellow entrepreneurs to build long-lasting relationships.

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