How to Use a Trucking Business Loan
Fortunately, by applying for a trucking business loan, you’ll have access to the additional working capital that you need. In this post, we’ll explain how you can utilize a business loan to grow your trucking business.
Expand Your Fleet
According to recent research from the American Transportation Research Institute (ATRI), trucking companies with larger fleets typically earn a greater return on their investment. In addition to being able to save on the cost of shipping per mile, larger companies can also save on equipment, permits, insurance, fuel, tolls, and other costs.
By expanding your fleet, you can take on more jobs, which will increase your revenues. Developing your fleet early is essential for successfully positioning yourself in this very competitive industry.
Hire More Drivers
Having enough drivers is necessary for your trucking business to succeed. Unfortunately, there are many costs of hiring drivers that will need to be paid prior to them starting their jobs.
To start, you may need to invest in recruiting costs, such as working with a recruiter or posting on paid job sites. In addition, you’ll need to be able to afford training, individual licenses, permits, insurance, possible union costs, and other expenses. You may also need to pay for your staff’s uniforms and personal equipment. Although these costs may seem steep, your trucking business will benefit in the long-term from having more drivers. Using your business loan can make this possible!
There are currently more high-tech solutions for trucks than there have ever been before. Finding ways to implement new technology is one of the surest ways your business can establish a competitive advantage. If you wait to update your technology, you may end up falling behind your competitors.
There are many technology trends for trucks including improved camera systems, enhanced routing systems, electronic logging devices, among others. These technologies can help your trucks operate more efficiently and become substantially safer.
The transportation and trucking industries are very dependent on the use of logistics. For example, in recent years, UPS’s policy of only using left turns when absolutely necessary was a logistical move that has helped the company use 10 million fewer gallons of fuel per year. Even if your company isn’t operating on a scale anywhere near the size of UPS, there are still logistic advantages that you can gain as well.
Improving your organization’s logistics involves many different pieces. These advantages are often found by process engineers, operational experts, and even through the use of automated data systems. Applying for a trucking business loan can help you invest in a system that can effectively meet your needs.
Save on Inventory
In most industries, buying in larger quantities can help your business save on a per-unit basis. Over time, driving down marginal costs is one of the best ways to increase your trucking business’ bottom line.
Having additional working capital can allow your business to purchase more inventory. For instance, you can buy tires, mechanical equipment, lights, and other goods in bulk so that you can lower your annual expenses.
Owning a trucking business can be a lucrative venture, and the industry is vital. Without trucks, the cost of moving goods to a specific location would universally increase. Although the industry is clearly here to stay, only some trucking companies will succeed. Applying for additional working capital can help your trucking business pursue its long-term goals and continue to grow.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.