Bethesda Freight Carriers Stay Competitive without Loans
From medical supply distributors to groceries, the East Coast relies on Bethesda freight carriers to deliver shipments. Bethesda, MD is home to one of the major hubs for freight carriers. The end of 2018 is projected to be heavier than previous years due to our strengthening economy. However, Bethesda freight carriers are still wary about using loans for the additional capital needed to keep things moving. Fortunately, there is a better alternative.
Bethesda Freight Carriers Need to Avoid Debt
In order to bolster operations in this strong economy, or to maintain a source of working capital, Bethesda freight carriers need to avoid debt. Taking out traditional loans places liabilities on the books, and repaying that debt after the loan money has been used can not only eat into revenue, but it will restrict cash flow. If the economy takes a downturn, existing debt can overtake revenue and result in a negative cash flow, so freight carriers need to think ahead.
The Uncertain Future
Currently, Bethesda freight carriers – like the entire trucking industry – are trying to juggle a number of uncertainties. The demands from shippers are increasing. There is an existing and growing gap in the number of available drivers. Recent legislation is making it more difficult for drivers to cover the distances they did last year. In the face of these restrictions and uncertainties, taking on debt through loans is more than just risky – it’s financially dangerous.
A Better Alternative for Bethesda Freight Carriers
Instead of using loans, freight carriers are using asset based lines of credit to increase working capital from now and into the upcoming years. Asset based lines of credit provide a renewable source of working capital structured around the value of equipment, receivables, and more. These revolving lines of credit can be used as needed, and do not place any debt on the books. Additionally, the amount of financing available through asset based lines of credit grows as receivables and other assets increase in value. In this economy, despite the pressures on the trucking industry, Bethesda freight carriers are poised for growth, so asset based lines of credit make more sense than traditional loans.
CNH Finance specializes in asset based lines of credit. To learn more about how our solutions can help your freight company, contact CNH Finance today.