FinTechs Tune Up Payments to Keep Small Trucking Companies Humming

It’s been a tough year for smaller players in the trucking industry, those owner-operators and small fleets who might be operating as few as one or two trucks.

First there was the spike in the price of diesel, which has only recently started to come down. Then there was the lowering of truck rates, which cooled off from the highs of last year.

“These two things happening at the same time certainly put a strain on some of these businesses,” CloudTrucks Co-Founder and CEO Tobenna Arodiogbu told PYMNTS.

Smoothing Out Cash Flow

CloudTrucks offers truck owners a business management solution that helps them generate revenue, manage cash flow, lower costs, and stay compliant and safe. With its CT Cash offering, the company pays drivers within two hours of completing a job, rather than the industry standard 30 days.

CloudTrucks added CT Credit, a Visa credit card for owner-operators and small fleets, July 6.

Read more: Trucking Management Firm CloudTrucks Debuts Visa Card

“Given the high cost of operating a trucking business, the high cost of fuel, the high cost of maintenance, sometimes folks need to [smooth out their cash flow],” Arodiogbu said.

That’s the challenge the new CT Credit is meant to solve. It provides enough credit for these trucking entrepreneurs that they can smooth out their cash flow in between jobs, purchase fuel and pay for maintenance while also building their business credit.

Meeting Trucking Entrepreneurs’ Needs

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 as fast as possible, especially on nights and weekends. If they were to complete a job Friday night and be paid via automated clearing house (ACH), they wouldn’t get that money until the next Tuesday, Arodiogbu said. With CT Cash, they get it within two hours, regardless of the time.

Building Business Credit

The new CT Credit offering is meant to meet another need, that of drivers who have started a job but haven’t completed it and need money to pay for expenses in the meantime.

“The challenge that a lot of these folks 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 ago or two years 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 go up from there based on CloudTrucks’ understanding of the customer’s cash flow.

“We’re not a bank,” Arodiogbu said. “Our job is to provide them the amount of money that is sufficient to help [smooth] out that cash flow, build their business credit, then they can go to a more traditional lender if they’re trying to purchase another truck, a trailer or anything like that.”

Dialing in Business Metrics

Looking ahead, Arodiogbu said CloudTrucks will be bringing out more and more business management products focused on revenue, cash flow, costs, safety and compliance — all meant to help trucking entrepreneurs deal with today’s macroeconomic challenges.

“We expect that things are going to be a little bit difficult, but CloudTrucks is certainly here to help,” Arodiogbu said. “We were really built for this type of environment where it’s even more important to understand all of your business metrics and really try to dial those in.”

See also: CloudTrucks Raises $115M in Series B Funding Round

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