Fuel, insurance, maintenance, and driver pay don't wait for an invoice to clear, and that reality makes carriers particularly vulnerable to the cash-flow risk, according to survey results released by altLINE.
In fact, if a business's single most significant client is 90 days late on payment, more than one-third of SME owners say the impact would be critical or severe.
"For a carrier, having one or two major customers can create a lot of exposure when payments are delayed," says Jennifer Lockett, freight factoring operations manager at altLINE. "The truck still needs fuel, insurance, maintenance and repairs, and drivers still need to be paid whether that invoice has been collected or not. A 90-day delay can turn what started as a payment issue into an operational problem very quickly, particularly for smaller carriers without a large cash reserve."
Key takeaways:
- Among small business owners who'd been paid late in the past year, more than two in five say they'd need financing, debt, or asset sales to cover just one month of delayed payments.
- 88% of small businesses paid late in the past year say it affected their operations in some way; more than a third covered the gap with personal savings.
