Funding your freight brokerage business

It is vital to have the funds to properly run your freight brokerage; in most cases the trucking companies want to be paid within in 21 days or less and a lot of times because you are a new freight broker they will want some money up front to move the load. Yet the shipper does not the freight bill for 35-60days where does this leave you as the freight broker?

It is vital to be able to have the cash flow to keep your doors open it is not wise to open your freight brokerage with a non existing operating expense account, if you do open with no operating capitol how many loads will you be able to move before you have to begin not paying you trucks on time or telling your shipper that you cannot handle the load capacity they have to offer.

Let’s look some options.For Beginning operating capitol

(1)Funding from your bank you will need to have some kind of collateral especially if you have not had a long time relationship with the bank?

(2)Funding from factoring companies who will buy your accounts receivable. They take a percentage of your receivable but they will take care of the collection process in many cases. Rates range from 3-5% and this is off the gross profit this means, if you are to make any money you need to hold a high profit margin 15-20%. And when you are starting up your freight brokerage business the profit margins are normally not that high


(3) Get a personal loan with peer lending. How Peer to Peer Lending Works Creditworthy Borrowers create listings for fixed rate personal loans. Lenders looking for a better return and greater transparency invest in individual Americans.

But check out all your options before you put one into place

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