FinTechs are improving their offerings for small trucking companies
It’s been a tough year for smaller players in the trucking industry, owner-operators and small fleets that only operate one or two trucks.
First there was the surge in the price of diesel, which only recently started to fall. Then there was the decline in truck rates, which were down from last year’s highs.
“These two things happening at the same time are definitely straining some of these companies,” CloudTrucks co-founder and CEO Tobenna Arodiogbu told PYMNTS.
Cash flow smoothing
CloudTrucks offers truck owners a business management solution that helps them generate revenue, manage cash flow, reduce costs, and stay compliant and safe. With its CT Cash offering, the company pays drivers within two hours of completing a job, instead of the industry standard 30 days.
CloudTrucks added CT Credit, a Visa credit card for owner-operators and small fleets, on July 6.
Read more: Trucking Management Company CloudTrucks Launches Visa Card
“Given the high cost of running a trucking business, the high cost of fuel, the high cost of maintenance, sometimes people have to [smooth out their cash flow]“said Arodiogbu.
This is the challenge that the new Credit CT is supposed to meet. It offers enough credit to these trucking contractors so they can smooth their cash flow between jobs, buy fuel and pay for maintenance while building their business credit.
Meet the needs of trucking contractors
About 70% of those using CloudTrucks own one or two trucks, and a growing number own five or more.
The new credit product joins the company’s existing factoring solution, CT Cash. With CT Cash, drivers can get their money back as quickly as possible, especially on nights and weekends. If they were to complete a job Friday night and get paid through an automated clearinghouse (ACH), they wouldn’t receive that money until the following Tuesday, Arodiogbu said. With CT Cash, they get it within two hours, no matter what time it is.
Credit to construction companies
CT Credit’s new offer aims to meet another need, that of drivers who have started a job but have not finished it and who need money to pay for expenses in the meantime.
“The challenge a lot of these people have is maybe their business is still new — they’ve been truck drivers for a long time, but their business, their [limited liability company]just started a year or two ago – and they haven’t really built that business credit,” Arodiogbu said.
CloudTrucks sees its offerings as a foot in the door. Its credit limit starts at $500 and can increase from there depending on CloudTrucks’ understanding of the customer’s cash flow.
“We are not a bank,” Arodiogbu said. “Our job is to provide them with enough money to help [smooth] take out that cash flow, build their business credit, and then they can go to a more traditional lender if they’re trying to buy another truck, trailer, or something like that.
Composition of business metrics
Looking ahead, Arodiogbu said CloudTrucks will increasingly offer business management products focused on revenue, cash flow, cost, safety and compliance, all aimed at helping trucking entrepreneurs face today’s macroeconomic challenges.
“We expect things to be a bit difficult, but CloudTrucks is definitely here to help,” Arodiogbu said. “We were really designed for this type of environment where it’s even more important to understand all of your business metrics and really try to integrate them.”
See also: CloudTrucks Raises $115M in Series B Funding Round
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