Towing Merchant Cash Advance & Business Funding
Merchant cash advance for towing companies.
Towing companies can get a merchant cash advance based on deposits from motor clubs, police rotation work and cash customers. National staffing in towing is flat all year, so the risk funders watch isn't seasonal. It's a truck going down, or a motor club changing its pay schedule. Trucks and repairs are the common uses.
How do funders read towing companies?
Funders look at how many trucks you run, how much comes from motor clubs, and whether any one club is most of your revenue.
How does money come in for towing companies?
Money comes from motor club dispatches paid by ACH on the club's schedule, police and municipal rotation calls, impound and storage fees, and drivers paying by card at the scene. Motor club payments can lag and arrive in batches.
Which months are slowest for towing companies?
This table shows how many people private motor vehicle towing (NAICS 488410) businesses employed each month, as an index where the year's average is 100. It comes from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the most recent full year available. Staffing is a stand-in for how busy a business is. Deposits can move more or less than headcount, so read it as the shape of the year, not your numbers.
| Month | Staffing index (average = 100) | |
|---|---|---|
| January | 100 | |
| February | 100 | highest |
| March | 100 | |
| April | 100 | |
| May | 100 | |
| June | 100 | lowest |
| July | 100 | |
| August | 100 | |
| September | 100 | |
| October | 100 | |
| November | 100 | |
| December | 100 |
The low point is June at 99.7 and the high point is February at 100.4, a swing of 0.7 points. The line barely moves at all.
| Quarter | Total payroll index (average = 100) |
|---|---|
| Quarter 1 | 98 |
| Quarter 2 | 97 |
| Quarter 3 | 100 |
| Quarter 4 | 105 |
Payroll by quarter can rise at year end for reasons like bonuses and overtime, not only more work.
What do towing companies use merchant cash advances for?
- A wrecker or flatbed.
- Engine, hydraulics or winch repairs.
- Insurance premiums.
- Storage lot improvements.
- GPS and dispatch systems.
What does an advance payment look like in a slow month?
Staffing barely moves through the year here, so the slow month to plan for isn't seasonal. Say a truck is down for a month and deposits come in 20% under average. Say a business like yours deposits $60,000 in an average month and carries a fixed payment of $6,000 a month, 10% of that average:
| Deposits | Fixed payment | Share of deposits | |
|---|---|---|---|
| Average month | $60,000 | $6,000 | 10.0% |
| A month 20% below average | $48,000 | $6,000 | 12.5% |
A fifth less in deposits turns a 10% payment into 12.5%. Keep a cushion for it, or ask how reconciliation works before you need it.
Which funding options fit towing companies?
Each page runs one option against this industry's slow months.
Same-day merchant cash advance for towing companies
Money the same business day for an urgent cost, with the fixed daily debit measured against a slow month.
Business line of credit for towing companies
A draw sized for a slow month, repaid in thirds, with the interest on the balance worked out.
MCA consolidation for towing companies
One payment in place of two, with the share of deposits before and after in a slow month.
Second position MCA for towing companies
What a second advance adds on top of the first, and what both payments take from deposits in a slow month.
Revenue-based financing for towing companies
A remittance that moves with revenue, so a slow month sends less, and the months to reach the repayment cap.
Run a business like this?
Tell us your slow months up front and we'll look for funders that size for them. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.