Use Freight Bill Factoring For Your Trucking Company

If you own a truck company you must be fully aware that the intensity of cash flow in this business is much higher than most businesses. The list of ongoing expenses like fuel expenses, salaries, truck repairs, rental charges can be overwhelming for anybody. It is a known fact that running a truck company is profitable but the wait for freight bills to get paid after 60 days can be overbearing even for large profitable trucking companies. This situation is more difficult for small and new trucking companies.

In most cases, owners try to get finance from banks in the hope of solving the problem with a line of credits. But this is not easy as the company needs to show a minimum of 3 years of audited finances with regular profits. If that is the case then why would the owner go to a bank for a loan in the first place?

A better solution in such a case is to opt for freight factoring. In freight factoring you are able to convert your slow paying freight bills into easy cash by selling them to a freight factoring firm/company/broker. In this way you are able to get easy finances and handle ongoing expenses for your business. Freight bill factoring is a more flexible way of getting finances as compared to loans.

The process of freight bill factoring for trucking companies is easy. The factoring companies buy your invoices and pays for them upfront. The payment is done in two installments. The first installment, called the advance, of 90-95% of the bill amount is paid when they take over the invoice. The second installment comes when the customer has paid the invoice amount to the factoring company, who then pays the remaining 10% after deducting their fee. This 10% is held up as reserve money in case of charge backs or disputes.

The factoring fee is dependent upon the time taken to clear the invoice and the monthly volume of invoices provided to the factoring company. Discount rate can be from 1.5% to 4% per month depending upon the given parameters.

It is generally seen that factoring companies buy invoices by the non-recourse invoice factoring method. In such cases, it is the factoring company that carries the risk and bears the losses if a client is not able to pay the bills. This comes as an added benefit of factoring and allows you to concentrate on your business to make it grow.

In many cases factoring companies also provide collections and credit protections as part of their services. This saves you from spending more money and time in back office work and provides you with the benefit of concentrating your time and energy and redirecting your money to grow your business.

Freight bill factoring proves to be a boon for the new and emerging trucking companies as they can make their businesses grow without worrying about payments of invoices. Many truck factory owners started factoring their bills to avert dealing with slow or non payers, have with time been able to put away a lot of tension and concentrate in a more focused manner on their business.

Using Freight Factoring for Your Truck Delivery Business – Pro and Con Reasons

Even the most winning transportation companies deal with a cash flow fight. Trucking factoring is a Self-Driving-Truck1quick and reasonable method to get steady working capital.


What Freight Factoring Is

The freight factoring process is simple, planned for truckers to do even while they are on the road. When you transport a load, delivered you a copy of the invoice of lading to the truck factoring corporation. They will confirm it and put down a percentage of the invoice sum directly into your bank account. You can employ those funds to carry on your business, and the factors will gather payment from your client. Once the factor gather, you acquire the pending sum due you minus their fee.


What are the compensation of truck factoring?

Trucking companies select an invoice factoring when they do not have cash on hand to cover their operating cost, generally because of slow paying clientele. Truck factors will buy your open bills of lading and go forward you cash against them, so you can cover your operating cost even if your clientele will pay after 3 months or even more to pay.



Truck factoring engages more than a cash advance. Your truck factor will present back office hold up, such as credit verifications for your clientele, as well as online reporting you can use no matter where you present at that time.

Other services that truck factoring companies provide can comprise of fuel cards that you can employ at number of refueling stations across the USA, which are qualified for discounts and rebates or fuel theres-a-huge-shortage-of-truck-drivers-in-america--heres-why-the-problem-is-only-getting-worseadvance of up to 60 % of your freight bills when you pick up a load. You can also have access to load boards to find fresh loads.


How can factoring companies assist in trucking business grow?

A flourishing business is the most significant cause for factoring trucking invoices.

Here are a few methods you will benefit from. For example, you can keep away from adding new debt to your balance sheet or do your bills Payment on time and take benefit of early payment discounts to save even more cash and build your credit. You can use fuel advance to cover the cost of more profitable loads or you can connect with new clientele through your factor’s FREE load boards.

You can take benefit of free online credit checks for your clientele or fuel cards can be used at almost all main truck stops nationwide.


Drawback of Factoring Freight:

Freight factoring rates can be higher than the interest rate offered with a straight line of credit. On the other hand, a customary lender will not present the extra services available through freight factoring.

A lot of freight factors require that you repurchase bills that have gone out past their alternative. We do partner with freight factors who present no recourse funding that can defend you if a client fails to pay; in addition, all of our factors conduct credit checks previous to approving your clientele for funding, for your protection.

McLane Distribution Services Ryder fleetFactoring freight invoices with the wrong corporation can lead to months of irritation as you stay for advances and fall victim to predatory terms. Factor Finders deals with freight factoring companies that are highly look upon in the business and that have the expertise to offer the top-notch service you merit.


Prepared to begin Freight Factoring & produce Your Trucking Business?

Freight Factoring companies understand the transportation industry and they ready to assist with your funding requirements. Our freight invoice factoring services are elastic and designed for trucking companies of all sizes and stages. Acquire the factoring services and programs you necessitate  – with the low rates you want.