For the past 15 years, if a carrier needed some assistance getting over a rough time financially, there has been help available from lenders who specialize in transportation finance. One of those companies is Marquette Transportation Finance, which just surpassed a milestone of sorts: It’s lent more than $15 billion to companies large and small.
Richard Voreis, CEO, told FreightWaves that the very first trucking customer Marquette, which is a subsidiary of UMB Bank, ever lent to is still a client today. That business was struggling financially at the time, and the loan that Marquette extended helped it survive.
“We position ourselves as a bridge lender,” Voreis explained. “We’re there to finance the gap [to traditional banks].”
Voreis said that the company offers “working capital loans” to help finance cash flow. Sometimes it is companies that are financially strapped for some reason, other times it’s simply a company that wants to smooth out its cash flow. Most of the carriers Marquette works with have $10 million in revenues and up. The company can extend lines of credit up to $40 million.
Companies turn to Marquette for many reasons, Voreis said. It could be that they have just lost a shipper that provided 50% of their revenue, and while they still have the equipment to find new customers, there is a short-term cash crunch as bills still need to be paid. Sometimes companies are able to add new customers, but need cash to add equipment to take on the contract.
Because Marquette is part of a bank it must meet certain banking regulations, but unlike banks, which often will turn down troubled carriers, Marquette works to find solutions, including offering collateral loans in some cases. Despite this, the failure rate of the loans Marquette makes is very low, Voreis noted.
“A business hits hard times and we can give them a lifeline,” he said.
DiAne Reed, executive vice president and director of national sales, said that Marquette tries to work with carriers who need help.
“We’re really a flexible financial arm,” she said, “and want to be that partner.”
As any carrier today knows, there are plenty of outside pressures, including the upcoming ELD mandate, rising insurance costs, and the general cyclical nature of the business. Combined with high capital requirements and small margins and it’s easy for a carrier to fall into financial trouble.
Voreis compared the trucking industry to the farming industry – plenty of small, family-owned businesses that are one disaster away from being out of business.
“It’s important for business owners out there to understand there is financing available,” he said.
Marquette offers accounts receivable financing that will allow a business to access cash when you need it’; traditional commercial lending, and its “Advance Plus” program. The Advanced Plus program operates as a ledgered line of credit with flexible draw amounts, according to the company.
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.