Bank Loan vs Freight Factoring

The recent economic crisis in the US has hardly affected the trucking industry insofar as volume goes; while market forces shift depending on prevailing consumption, there will always be the need to transport goods from one place to the other. A well-managed trucking business will survive no matter what.

What has become a matter of concern for all businesses in general and including the trucking industry is the difficulty in getting ready capital. This is especially critical for those in the trucking industry because good cash flow keeps the wheels turning; when the cash stops, so does the business.

Traditionally, one would open a line of credit or an outright business loan with a bank, using the company’s assets as collateral. Lately, though, it has become more difficult to get the bank to take the risk as more and more people are defaulting on loans. According to the website of TBS Factoring, an alternative to a bank loan that has become more popular of late is that of freight factoring, and this is because of some crucial differences.

Credit Rating

Banks are concerned with the ability to pay of the borrower, or the trucking company owner, so if you have a less than stellar credit score, you won’t get approved for a business loan no matter how well your business is doing. Freight factoring companies, on the other hand, are more concerned with the credit rating of the client because this will determine if the invoice will be paid.

Flexibility

Banks deal with everyone, so they tend to be more rigid in the programs they offer. Freight factoring companies deal solely with freight transportation, so they have a better feel for what works in the industry and can offer options that will answer the needs of the company more effectively.

Repayment

Bank loans have to repaid; factoring does not because it’s not a loan. The trucking company owner basically sells the invoice so unless it is recourse factoring and the client doesn’t pay, that’s the end of that. In non-recourse factoring, even if the client doesn’t pay, the factoring company cannot demand that the owner make good on the invoice.

Overall, bank loans are not the best solution for trucking companies with temporary cash flow problems. They take too long to process, and there are no guarantees of getting approval. Freight factoring is definitely the easier and smarter way to go.

Understanding Patents

The main purpose of patents is to protect the rights of the inventor for an invention, whether it be a process, formula, or machine which is new or a significant improvement over an existing process, formula, or machine. It restricts non-patent holders for a specific period of time (usually 20 years in the US) from benefiting from the invention without the express permission of the patent holder subject to specific conditions. For example, a drug that can cure cancer can only be produced and sold by the patent holder until such time as the patent expires, or the patent holder conveys rights to others.

A patent protects ideas or designs instead of the actual physical invention, which makes it more complicated and restricted than, say, copyrighting a song or novel. There are many requirements for an idea or design to be considered patentable.

Many inventions today are based on a previously existing invention that may already be patented but sufficiently innovative to be distinct from what it has built on. A good example is a camcorder, which is a hybrid of the tape recorder and the video camera.

A patented idea should also be non-obvious such that a reasonable person with the requisite skill in a particular field would not be able to come up with the same design. For instance, a toaster with just one slot or three slots is not patentable, because it is obviously possible to have less or more of the standard two slots.

For an idea to be patented, there should also be a working model to demonstrate its purported function, and that function must not be immoral or illegal. An idea for a machine that will produce a chocolate shake from nothing but water cannot be patented, although as part of a fantasy model it can be copyrighted.

Enforcement of patent rights is completely up to the patent holder. For instance, Dallas intellectual property lawyers can be retained to file or fight an infringement lawsuit for the unlicensed use of an online shopping cart, such as the more than 130 cases against online retailers brought by EDekka LLC. Some consider this patent trolling, in which a patent holder takes advantage of the vague language used in some older patents to interpret it in an advantageous way. Such issues are why it is important for both patent holders and those who are accused of infringement should retain knowledgeable and experienced patent lawyers to protect their rights under intellectual property laws.