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Looking for Funding
He has spent plenty of years on the road himself in a business that doesn’t always play fair with payment. He is the voice of Sirius satellite radio’s Road Dog trucking channel. So country music legend Charlie Daniels has empathy for the professional driver — enough that he signed on with National Bankers Trust to promote a financial service that he believes will help drivers, but also to call attention to the need for fair financial practices in the industry.
“Truckers have a tough time — they’re at the mercy of petroleum companies, the DOT (Department of Transportation), weather, traffic. They have all kinds of obstacles to overcome,” he says.
One of those obstacles is balancing income with expenses. For owner-operators, the money coming in for jobs may lag behind the money going out for fuel, maintenance, meals and more. That’s why a number of companies offer factoring to ease drivers’ cash flow problems.
Factoring companies purchase the accounts receivable of a small trucking company. For a percentage fee, they take on the task of collecting payment from the customer and pay the trucker the money owed on their invoices immediately. “They don’t have to wait to be paid. They can meet their daily operating costs,” says Brad Bernstein, president of Anchor Funding Services, which operates the factoring service truckerfunds.com.
Whenever dealing with a company offering financial help, it’s important to understand the terms completely. D.J. Sterner of Bastrop, Texas, drives for Megatrux Transportation but looked into using a factoring company when he was considering getting his own authority. “Basically, you’re selling them the debt that’s owed to you for a percentage of the money you’re supposed to collect for the load,” Sterner says. “The ones I looked at charged any uncollected debt back to the trucker with a non-collection fee on top of that. They ended up making up a high percentage of your cost of operations.”
Bernstein suggests that truckers who are considering using one of these financial services:
• Make sure it’s a non-recourse relationship where you have no personal liability.
• Inquire about hidden fees. You should only pay a fee for funds being advanced.
• Ask how long the factoring company keeps your money after it comes in because you should have almost instant access to your own funds.
National Bankers Trust takes a different approach. After delivering a load, the trucker enters that load information onto a private National Bankers Trust website, faxes his proof-of-delivery documents and within minutes “cash” is posted to his Line of Funding account. This money can be used to load fuel cards, pay bills online or write TransChecks for cash to pay drivers.
“Truckers are only charged a fee for the money they spend, much like a line of credit, plus they earn fee rebates and eventually can capitalize themselves,” says CEO Dudley Boyd.
“Anyone who treats truckers fairly and doesn’t take advantage of them when they are vulnerable is good for truckers,” says Daniels. “Truckers are the backbone of this economy.”