5 Ways That Your Logistics or Transportation Business Can Utilize Short-Term Working Capital

When it comes to running your logistics or transportation business it’s important to ensure that you always have the capital on hand to keep operations running smoothly while not disrupting your services, but this can be a challenge especially when large upfront costs eat away at your working capital. What is the best way to be able to meet the needs and expectations of your clients without sacrificing your own capital immediately?

A short-term working capital advance can be a great tool for transportation and logistics business owners to overcome the day-to-day challenges that come with running a successful enterprise. Let’s take a look at five ways that your logistics or transportation business can use short-term working capital to effectively meet the needs of your clients.

What Is Short-Term A Working Capital Advance?

A working capital advance is a type of funding provided to a business to help it manage its day-to-day operational expenses. It is essentially a short-term loan that can cover expenses such as inventory purchases, payroll, rent, and other overhead costs.

The amount of the working capital advance is typically based on the business's cash flow and revenue, as well as its creditworthiness. Sometimes, a lender may require collateral to secure the loan, such as business assets or accounts receivable.

Working capital advances are often used by businesses that have seasonal fluctuations in revenue or need to make large investments in inventory or equipment. They can be an effective way for businesses to maintain their cash flow and keep their operations running smoothly during financial stress.

How Can A Short-Term Working Capital Advance Help A Logistics or Transportation Business?

1. Fleet Expansion

It’s a natural step when running a logistics or transportation business to try and expand your operations. The best way to do this is by purchasing additional vehicles to grow your fleet but this can be an extremely costly endeavor with even the initial costs heavily eating into your capital. 

Logistics and transportation companies can use short-term working capital loans to purchase additional vehicles or upgrade their existing fleet. This will allow you to increase the capacity of your business and meet the growing demand for your services. Using a working capital advance to expand your fleet is also a great way to compete in crowded and competitive markets. 

2. Maintenance and Repairs

Anyone who has ever owned a vehicle will know that eventually, you will need to make some sort of maintenance or repairs. Avoiding this can lead to disastrous consequences that could cost your business a large amount of capital, maybe even resulting in disruptions to your services. However, even routine maintenance can also cost more than your business may be willing to spend upfront.

Luckily, logistics and transportation companies can utilize short-term working capital loans to fund maintenance and repairs for their vehicles and equipment. This will help ensure that your fleet is reliable and in good working condition, reducing the risk of breakdowns and delays.

3. Staffing and Training

We have already mentioned that expanding your fleet is a natural step when looking to grow your logistics or transportation business, but using this method of expansion has another cost associated with it, staffing and training. With your new vehicles, you will need an increased amount of employees who have been well-trained to operate efficiently and safely.

Logistics and transportation companies can use short-term working capital loans to hire additional staff or provide training to existing employees. This will help improve operational efficiency and provide your customers with a better experience.

4. Technology Upgrades

The only constant is change, this has never been more true than when it is applied to technology. Tech companies are constantly innovating and upgrading their offerings in order to make the lives of business owners and employees easier. The only downside is that many of these tech upgrades can cost your business a lot of money when applied to your entire operation. 

Logistics and transportation companies can use short-term working capital loans to upgrade their technology, including tracking systems, dispatch software, and mobile apps. This will help improve the accuracy of delivery times and provide better visibility for customers.

5. Warehouse Space Expansion

As your operation develops you will need to expand your home base and storage in order to accommodate your ever-growing operation. This in itself can be a costly venture but it is a necessary cost in order to ensure that your investments are protected.

Logistics and transportation companies can use a short-term working capital loan to expand their warehouse space to accommodate growing storage needs. This will help improve their ability to store and manage goods, reducing the risk of stock shortages and increasing overall efficiency.

Short-Term Working Capital Advance Options

Backd’s Working Capital: The Financial Tool For Your Logistics or Transportation Business

When it comes to finding a short-term working capital advance to help your logistics or transportation business grow, Backd is here to help. 

Backd’s Working Capital Advance is one of the best on the market with competitive rates and terms that actually allow your business to grow. Backd offers working capital advances of $25K up to $2M with terms of up to 16 months. 

If you’re considering taking out a working capital advance then apply with Backd today. Our application only takes 3 minutes to complete with funding arriving in your account in just 24 hours. Don’t wait to get the funding that your business needs to grow, take the first step and apply with Backd today.