After producing and selling your products, you must figure out a way to get them to your clients. Investing in your own fleet of vehicles requires lots of startup capital or loans, which are hard to receive if your business is small or new. Here are a few ways to jump into the transportation industry without ruining your budget.

Use Transportation Factoring

If you usually don’t get paid until your goods reach your clients, then it takes a while to receive the payment you need to cover shipping costs. Cut out this gap between shipment and payment by using transportation factoring. This process works similarly to other kinds of factoring, also known as accounts receivable financing. You apply for a bank’s factoring program, and if your credit score and banking history are reliable, you receive approval. Once you ship an order, you sell the invoice to your factor, who gives you the value of your order except for a fee. When your client completes payment, that money goes to the factor. This strategy allows you to put your profit to work immediately rather than waiting for your payment to come in. For business owners who struggle with cash flow and don’t want to take on more debt, transportation factoring is a great solution.

Apply for Alternative Financing

In addition to transportation financing, there are a variety of ways to get the funding you need in the transportation industry. If your products meet a need in an underserved community, look for government grant programs for which you qualify. Unlike loans, grants do not have to be repaid, and they do not affect your credit score. For business owners with large professional and personal networks, consider crowdfunding. Ask your contacts to contribute a small sum and use the profits to cover your shipping costs. Because crowdfunding is time-consuming, this strategy works best for large-scale purchases rather than everyday cash flow problems. Finally, apply for a line of credit from a bank. This financing option works similarly to a credit card; the bank approves you for a set amount of spending each month, and you use as much as you need. At the end of the month, you repay the balance plus interest, making this method ideal for cash flow shortages.

If you’re new to the transportation industry, it’s easy to be overwhelmed by shipping costs. With a little creativity, though, you can find the funding you need.