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Cash flow problems are a perennial challenge in the trucking industry. The reasons are varied, but topping the list is that shippers often wait one to two months after a load has been delivered before issuing payment, wreaking havoc on carriers and intermediaries that can’t afford to wait. One answer to this issue is factoring.
A common tactic for carriers and brokers, factoring is now getting a next-generation makeover, with new entrants aiming to bring a more streamlined, tech-enabled approach to the business.
Digitization Drives Innovation
A case in point is Denim, a New York-headquartered platform that manages financing for freight brokers. Denim, which got off the ground last year, gives small and medium-size freight brokers a cash infusion by purchasing their accounts receivables. Riding a wave of digitization, it also provides back-office automation, assisting customers with invoicing, collections, and carrier payments.
In addition, the company offers a “quick pay” service that sends payment to the carrier at the same time that it advances funds to the broker.
Assisting Smaller Players
Several factors distinguish Denim from competitors, said Bharath Krishnamoorthy, co-founder and CEO of Denim. The company focuses exclusively on freight brokers and doesn’t lock customers into long-term contracts or charge extra for quick pay.
Despite, or perhaps because of, the pandemic, Denim is averaging 40% month-over-month growth in 2020, and this week secured $27.7 million in debt and equity financing. Participating in the round was Anthemis, a global venture platform, and Techstars. Earlier this year, Denim raised a $1.4 million pre-seed round, led by Trucks Venture Capital.
Enabled by technology, Denim will make factoring available to all carriers via freight brokers, regardless of their size, Ruth Foxe Blader, partner at Anthemis, told FreightWaves in an email.
“Just like robo advisors have done for wealth management, Denim is democratizing invoice financing for all carriers by efficiently delivering valuable back-office technology and factoring for freight brokers,” Blader said.
Read the full article here.
Thousands of small transactions make it harder to track financial health.
There’s a better way
Denim’s automated solutions streamline your back-office operations. Explore our solutions to see how Denim can help your business scale efficiently.
Problem: Overcomplicated books with too many manual entries.
Solution: Use accounting software that integrates directly with your factoring and invoicing platform to reduce redundant data entry and improve accuracy.
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