Freight Bill Factoring – Right or Warning for Your Business

Shaw Capital Factoring and Management of Loans Freight Bill factoring Tips - One of the most difficult aspects of managing a trucking company – especially a small trucking company – is the cash flow. Cash flow is all about how money moves through your company. Unfortunately, when you have clients that pay 30 to 60 days after you have shipped for them, the cash flow can become a little strained. This is because, even though your customers have not paid yet, you still have daily expenses: truck maintenance, pay checks to personnel, fuel costs and more. So how do you cover these expenses when you do not have the ready capital to hand? One solution can be freight bill factoring.

Freight bill factoring v. traditional loan financing

Shaw Capital Management and Factoring, Right or Warning for Your Business - If you are a small trucking company (and maybe even a medium sized or large one), you know that sometimes it can be tough to get traditional loan financing. Often, especially if you are start up, or if you are going through a rapid period of expansion, you just do not have the available credit for traditional loan financing – and you still have the need for cash.

In such cases, freight bill factoring can help you obtain the capital you need. In freight bill factoring, a financing company – called a factor – basically buys the freight bill from you and advances you the cash. Often, the factor will in turn collect from the customer, meaning that once you turn the invoice over, it is also no longer something you need to worry about.

Basics of freight bill factoring - Freight Bill Factoring – Right or Warning for Your Business

Even thought there is not the same approval process that you would have to go through with the bank, the factor will still want to make sure that payment from your customers is likely. Your customer list may be scrutinized, and those that pass muster can provide the freight bills for factoring. It is possible to set up a regular arrangement with the factor so that cash flow remains regular. Here are some of the things you need to keep in mind about freight bill factoring:

Documentation. Proper documentation will be needed when you present a freight bill for factoring. You will need an original bill of lading, as well as other documents that the factor may request.

Fees. Be aware that you will be charge a fee for the advance. This is typically between three percent and five percent of the total. The fee depends on how reliable your customers are, and sometimes can depend on how quickly they pay their invoices.

Reserve. Sometimes, a factor will hold a reserve from the advance on the invoice. In such cases, many of them will pay between 85 and 90 percent of the freight bill up front. This is the advance. The rest is held in reserve, just in case the invoice is not paid, or if other fees need to be collected. When the invoice is paid, the rest of the freight bill (minus the fee) is paid. For example, if you have a bill for $1,000, the company may only advance you $900 on the spot. (Remember, though, this is better than the $0 you be getting otherwise.) If the fee is three percent of the total, $30 would be subtracted from the remaining $100 when the customer pays the invoice, leaving you with an additional $70.

Recourse v. non-recourse. It is very important to determine whether or not the factor you are working with offers recourse or a non-recourse agreement. This is because it can make a very big difference in the rights the factor has in collecting on an invoice that is not paid. In a recourse agreement, the factor can require this article has all rights reserved and is copyright by 100 Best you to pay some or all of a freight bill if the customer does not pay. In a non-recourse factoring agreement, once freight bill is turned over to the factor, it is solely the factor’s responsibility. You are in the clear if the customer does not pay – you can keep your money (although you may not get the reserve back).

Getting your money from the factor. You need to find out how the factor will pay your advance. With freight bill factoring, the most common methods are wire transfer, ACH transfer and check. It is important to note that the funds may not be available for immediate withdrawal from your account. In same cases it may take 24 to 48 hours for the money to become available to you.

Freight bill factoring can be very beneficial to trucking companies. It allows you almost immediate access to capital, and can keep the cash flow in your company more liquid.

Shaw Receives Full Notice to Proceed on Duke Energy's Dan River Combined Cycle Plant

BATON ROUGE, La., Mar 01, 2011 (BUSINESS WIRE) -- The Shaw Group Inc. (NYSE: SHAW) today announced it received full notice to proceed on a new gas-fired facility at Duke Energy's Dan River Steam Station in North Carolina.

Scheduled to begin operation in late 2012, the new 620-megawatt natural gas-fired combined-cycle generating unit will replace two older units at the facility. At the peak of construction, the project will employ more than 400 workers.
"This project demonstrates Duke's commitment to providing cleaner energy and jobs for its local communities," said Clarence Ray, chief executive officer of Shaw's Power Group. "Shaw is proud to help Duke ensure an affordable, reliable and cleaner energy supply for the future."
In March 2010, Duke awarded Shaw an engineering, procurement, construction and commissioning services contract for the construction of the new facility, and Shaw began working under a limited notice to proceed.
The undisclosed value of the contract will be included in Shaw's Power segment's backlog of unfilled orders in the second quarter of fiscal year 2011.
Also as a part of Duke's long-term plan to add new generation, modernize the fleet and maintain a diverse fuel portfolio, Shaw is constructing a new 620-megawatt gas-fired unit at Duke's Buck Steam Station in North Carolina, which is scheduled for completion in late 2011. The similarities and close timing of the two projects allow for maximum use of design replication and other synergies that are resulting in significant savings to Duke Energy.
The Buck and Dan River projects will use state-of-the art environmental control technology to minimize plant emissions. These controls, combined with the retirement of the older units on the two sites, will help reduce environmental emissions of NOX and SO2 at the sites.
The Shaw Group Inc. (NYSE: SHAW) is a leading global provider of engineering, construction, technology, fabrication, remediation and support services for clients in the energy, chemicals, environmental, infrastructure and emergency response industries. A Fortune 500 company with fiscal year 2010 annual revenues of $7 billion, Shaw has approximately 27,000 employees around the world and is the power sector industry leader according to Engineering News-Record's list of Top 500 Design Firms. For more information, please visit Shaw's website at www.shawgrp.com.
This press release contains forward-looking statements and information about our current and future prospects, operations and financial results, which are based on currently available information. Actual future results and financial performance could vary significantly from those anticipated in such statements.
Among the factors that could cause future events or transactions to differ from those we expect are those risks discussed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2010, our Quarterly Reports on Form 10-Q for the quarters ended February 28, 2010, May 31, 2010 and November 30, 2010, and other reports filed with the Securities and Exchange Commission (SEC). Please read our "Risk Factors" and other cautionary statements contained in these filings. Our current expectations may not be realized as a result of, among other things:

• Changes in our clients' financial conditions, including their capital spending;
• Our ability to obtain new contracts and meet our performance obligations;
• Client contract cancellations or modifications to contract scope;
• Worsening global economic conditions;
• Changes to the regulatory environment;
• Litigation or arbitration decisions;
• Failure to achieve projected backlog.

As a result of these risks and others, actual results could vary significantly from those anticipated in this press release, and our financial condition and results of operations could be materially adversely affected. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, the occurrence of certain events or otherwise.
SOURCE: The Shaw Group Inc.
Media and Financial Contact:
The Shaw Group Inc.
Gentry Brann, 225-987-7372
gentry.brann@shawgrp.com

Shaw Capital Management Korea: Indian’s Economy

The Indian economy will grow by 7.2% in fiscal year 2010 (April to March) as a surge in manufacturing and a rebound in services blunt the impact ofa drop in farm output. The recovery became increasingly private sectorled during the second half of the fiscal year, which bodes well for its sustainability. The government expects the Indian economy to grow by 8.5% in the next financial year that begins April 1, 2010 and to reach itsgoal of 10% annual economic growth in the coming years.

Shaw Capital Management Korea: Indian’s Economy - Inflation in India has spurted in recent months, as the worst rains in nearly four decades exacerbated supply shortages. The wholesale price index rose a provisional 8.56% — higher than the 8.5%, which the Reserve Bank of India expects to be reached by the end of the year through March. As petrol and diesel prices have been raised in the last week of February, the inflation rate may rise to 9.8% by the end of March. The IMF expects the wholesale inflation rate to reach 8% by March, before easing to 5.5% in March 2011. India’s exports rose sharply in January while non-oil imports also surged.

Higher growth in non-oil imports vis-à-vis exports shows that domestic investment and consumption demand continues to be strong, outpacing rising global demand for Indian exports.

Shaw Capital Management Korea: Exports in January rose 11.5% from a year earlier to $14.34 billion, after having increased 9.3% to $14.61 billion in December. Imports surged 35.5% in January to $24.70 billion while oil imports galloped 56% to $7.05 billion. The steady recovery in shipments, coupled with rising bank credit and accelerating inflation, may prompt the RBI to raise policy rates at its next review meeting in April.

The central bank had refrained from raising overnight rates at its last meeting in January but ordered banks to set aside a greater share of deposits as reserves, absorbing 360 billion rupees ($7.84 billion) from the banking system.

Shaw Capital Management Korea: The Finance Minister presented his budget on February 26th. He reduced personal taxation in middle-income households and rolled back some of the fiscal stimuli provided to industry. He increased excise taxes and brought more services under the tax net. In the world of rising concerns over sovereign debt, he projected the deficit to come down to 5.5% in FY11 from a revised 6.7% in FY10.

Markets have approved the government’s actions, as it laid out a medium term plan for fiscal consolidation, aiming to reduce the deficit to 4.8% in FY12, and to 4.1% in FY13. The deficit is 6.9% in the current fiscal year. Ratings agencies have also liked the proposed fiscal consolidation road map, but are in no hurry to change the country’s rating.

Shaw Capital Management Korea: The government borrowing — which would have crowded out credit markets this year, making it difficult for the private sector to raise capital and putting pressure on interest rates — has been contained to net borrowing of about $80bn (£52.5bn).

This figure is 20% lower than many industry figures and analysts had expected. The stock market has gained more than 3% since the budget was presented.