NEW YORK (PRWEB) January 27, 2020
Axle, the financial partner for the modern freight broker, today announces that it has received $1.4 million in pre-seed funding led by Trucks Venture Capital. Axle modernizes factoring, an alternative to lending, which gives small businesses the cash flow required to pitch, win and service competitive contracts. The round will help grow the Axle team of transportation and finance experts, to reach more small businesses who need help managing their cash flow, and also included Plug and Play Ventures, 37 Angels, Fontinalis Partners, and Techstars.
“Our goal is to even the playing field, so the smaller businesses that employ most Americans can compete and thrive,” said Bharath Krishnamoorthy, Axle CEO and co-founder. “It’s difficult for small businesses to finance their operations and growth today. We want to do everything we can to get them on the same footing as their larger competitors.”
Poor cash flow management is the second most common reason small businesses fail, with two primary ways they're vulnerable against large competitors:
- First, they don't have the same access to bank or equity financing, so they rely entirely on sales revenue;
- Second, they don't have the scale and leverage to demand favorable terms, so they often have to wait 30 or more days for payment after work is completed.
Factoring arose to bridge this gap and is a longstanding, essential part of small business financing. In 2018, private lenders purchased over $3 trillion in invoices across a wide range of sectors. But while everything in business has changed, factoring has not: it’s always been done with paper and pen, and that process simply can’t scale to fit the needs and pace of today’s businesses.
Axle’s platform provides funds upfront for unpaid invoices, so businesses can keep working.
“We’ve been working toward the automation of long haul trucking for years, because of heavy downward trends impacting our economy’s essential connective tissue,” said Reilly Brennan, founding partner of Trucks Venture Capital. “Axle frees up significant capital to support the businesses and individuals responsible for getting goods around our country.”
Freeing up the Freight Industry
Axle is optimized for any small business whose sales and payment cycles don’t match, giving them the kind of working capital required to operate among bigger competitors. Currently, the team is focused on freight brokers - the folks responsible for ensuring products move through trucking services. There are over 16,000 freight brokers in the United States.
Freight brokers are in a tough spot within an already tough industry. Demand exceeds the supply of truckers, with a trucker shortage of 60,800 drivers. This puts pressure on freight brokers to compete by offering truckers the ability to get paid fast. If small freight brokers don’t get paid efficiently, they can't take on new customers or pay their carriers on time, further slowing an already strained industry. With lean margins, these small brokers are often only a few slow-paying customers away from missing payroll and shutting down.
How Axle works
Axle modernizes the factoring process, bringing automation and financial technology to freight brokers who previously used a largely outdated paper and pen process. Axle offers easy credit reviews and quick funding, transparency into payment status, and automated payment processing, invoicing and collections. Freight brokers interested in working with Axle can find out more here.
Axle’s features include a fully-online application and on-boarding process, as well as a dashboard to add customers, submit documentation, and track payments.
Axle is a next-generation carrier payments platform. We are modernizing supply-chain payments, starting with factoring for freight brokers. We help small businesses compete, giving them the kind of cash flow required to pitch, win and service competitive contracts. For more information please visit http://www.axlepayments.com.