Transportation Compliance Insider

How Business Credit Can Help Carriers and Fleet Operators

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Today’s modern carrier and fleet operators face issues ranging from razor-thin margins, costly and unexpected expenses, liability, and more. When combined, these strains can cause many companies to lose revenue and financial stability rather than gain – even when business is booming.

Fortunately, there is an answer for those who need to give their company some financial security: business credit.

Business credit can be a catalyst for carriers and freight forwarders to improve cash flow and financial stability throughout the shipping cycle. Carriers and forwarders will benefit from having good credit in the early stages of their business.

Let’s consider a few of the top benefits that carriers can expect from business credit:

1. Protection for Thin Margins

The average net profit margin in the trucking industry is incredibly small. This means that mere cents of every dollar earned by carriers and forwarders go to their bottom line.

To further complicate matters, each carrier faces different challenges. Some face higher operating expenses than others, while some come up against unexpected costs that can put even more pressure on their margins.

With business credit, carriers and forwarders can establish the credibility they need to access less expensive loan products. They may also be able to qualify for better rates that help them manage their margins or avoid expenses that jeopardize their bottom line.

2. Security for Unforeseen Expenses

Carriers, in particular, are susceptible to unforeseen expenses because of the nature of their jobs. The industry reports that the average carrier spends hundreds per week on unexpected expenses like flat tires or an unexpected breakdown. If these costs are not covered by carriers, then they often affect their bottom line and credit scores.

A business credit profile can help carriers gain access to lower-cost financing options to cover these unforeseen expenses. This way, carriers and forwarders can avoid the steep fees that affect their bottom line and credit scores when these expenses can’t be managed in time.

3. Business Credit Score Stability

Carriers and forwarders who operate with thin margins or struggle to cover unforeseen expenses risk hurting their credit scores as a result.

Some carriers reach a point where they are unable to cover these costs, which can cause their credit score to drop. This is because established business credit scores are based on both personal and business credit. Late payments or missed payments made by carriers or forwarders will appear on their personal credit reports along with the carrier’s own payment history.

The good news is that some trucking companies can still maintain their credit even if they are only getting started. The right business credit profile can help carriers and forwarders establish business credit early on, which may give them the chance to offset some of these late payments made by personal vehicles.

4. Additional Supplier Opportunities

Business credit can also open up new supplier opportunities for carriers and forwarders, allowing them to access additional resources that may be of use when they are on the road or in need of servicing their vehicles.

A business credit profile can help carriers understand how suppliers analyze them when considering whether to offer discounts, sales, financing, insurance quotes, and more.

Business credit can be a powerful tool for carriers looking to gain new supplier opportunities that help them avoid overpaying for services. By creating a business credit profile, carriers and forwarders can take charge of their search for suitable suppliers who offer commercial rates based on the carrier’s credit score.

Build Your Business Credit with Purcell

Business credit can be key for carriers and fleet operators. However, the process to get started with business credit can be complex. If you would like to learn more about business credit and begin the process of setting up credit for your operations, contact the team at Purcell today.

From your first appointment, the team at Purcell will help you develop full business credit reports and scores across today’s top credit companies, including Dun & Bradstreet, Experian, and Equifax.

Purcell will then help you begin to build business credit with tradeline reporting and leading lending options for your unique needs.

Ready to learn more? Contact Purcell today or set up an appointment online now.

One thought on “How Business Credit Can Help Carriers and Fleet Operators

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