Factoring Services for the Transportation Industry

Freight Factoring Services Helps You Get Paid Faster

What is Freight Factoring?

Freight factoring is a financial service tailored specifically for the transportation industry, allowing trucking companies to receive immediate payment for their invoices. Instead of waiting for weeks or even months for customer payments, trucking companies can sell their outstanding freight invoices to freight factoring companies. These factoring companies then provide a cash advance, typically covering up to 98% of the invoice value. This immediate influx of cash helps trucking companies maintain a consistent cash flow, ensuring they can cover essential expenses like fuel, payroll, and maintenance without delay. By leveraging freight factoring, trucking companies can focus on growing their business rather than worrying about cash flow issues.

Freight Factoring Services Helps You Get Paid Faster

Get Same Day Cash for Your Trucking Company

New to the trucking industry, or feel like you don’t have enough cash on hand to grow your business? Freight factoring is a simple solution that can help your trucking company get paid faster for loads you haul. Factoring is a popular source of financing for the transportation industry — and it’s easy to see why. Transportation factoring gives truckers fast cash to pay for fuel, cover payroll, and fund any on-the-road expenses. Rather than waiting months to be paid for loads you’ve already hauled, a trucking factoring company puts cash in your wallet today.

Freight Factoring Services That Work For You:

  • Same day funding on copies or faxes
  • Low, flat rates from 1%
  • No monthly minimum volume requirements
  • Free credit checks
  • Fuel advances & fuel cards

The Process of Factoring Freight Bills

The transportation factoring process is far more simple than traditional financing. The initial paperwork process is easy and generally only takes 3-5 days for approval. After that, you can receive cash for factored freight bills in as little as a few hours!

How Does it Work?

On a basic level, factoring is the process of selling your outstanding invoices. First, you complete a freight delivery as normal. Next, simply submit a copy of the freight bill to the transportation factor. The factoring company verifies the invoices and advances you up to 98% of the total invoice. Then, the factor will work with your clients to collect payment for the original invoice. Once paid in full, your business will receive the remaining reserve minus a small factoring fee. Be sure to understand all factoring contracts and agreements. (Please note that no reserve programs are available.)

What Documents Are Needed to Apply for Factoring?

In order to be approved by transportation factoring companies, you’ll need to complete an application and provide the following documents:  operating authority, proof of insurance, Articles of Incorporation, and a current customer list. Approval is quick and only takes a few short days.

Types of Freight Factoring

When it comes to freight factoring, trucking companies have two main options: recourse and non-recourse factoring. Recourse factoring means that if a customer fails to pay the invoice, the trucking company is responsible for repaying the factoring company. This type of factoring usually comes with lower fees but higher risk for the trucking company. On the other hand, non-recourse factoring transfers the risk of non-payment to the factoring company. If the customer doesn’t pay, the factoring company absorbs the loss. While non-recourse factoring typically has higher fees, it provides greater peace of mind for trucking companies by mitigating the risk of bad debt. Understanding these options helps trucking companies choose the best fit for their financial needs and risk tolerance.

Qualifying for Freight Factoring

To qualify for freight factoring, trucking companies generally need to meet specific criteria. These may include:

  • Minimum Monthly Invoice Volume: Factoring companies often require a minimum volume of invoices or freight bills each month.
  • Customer Credit History: A customer base with a good credit history is crucial, as factoring companies assess the creditworthiness of your clients.
  • Reasonable Days to Pay: Customers should have a reasonable payment timeline, typically within 30 to 90 days.
  • Percentage of Invoice Needed: Determine the percentage of the invoice amount you need to operate your business effectively.

Factoring companies may also evaluate the trucking company’s credit history and overall financial stability. Meeting these requirements ensures a smoother approval process and access to the benefits of freight factoring.

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The Process of Factoring Freight Bills

The transportation factoring process is far more simple than traditional financing. The initial paperwork process is easy and generally only takes 3-5 days for approval. After that, you can receive cash for factored freight bills in as little as a few hours!

How Does it Work?

On a basic level, factoring is the process of selling your outstanding invoices. First, you complete a freight delivery as normal. Next, simply submit a copy of the freight bill to the transportation factor. The factoring company verifies the invoices and advances you up to 98% of the total invoice. Then, the factor will work with your clients to collect payment for the original invoice. Once paid in full, your business will receive the remaining reserve minus a small factoring fee. Be sure to understand all factoring contracts and agreements. (Please note that no reserve programs are available.)

What Documents Are Needed to Apply for Factoring?

In order to be approved by transportation factoring companies, you’ll need to complete an application and provide the following documents:  operating authority, proof of insurance, Articles of Incorporation, and a current customer list. Approval is quick and only takes a few short days.

Easy Funding for the Transportation Industry

Bad Credit? No Credit? No Problem!

Don’t let bad credit or past financial troubles hold you back from obtaining the cash flow you need to succeed in the transportation industry. Factoring companies look at the credit worthiness of your customers, therefore, approval is based on the ability of the shippers and brokers you’re hauling for to pay their invoices. Your credit won’t be a problem. Factoring helps both new and established trucking companies by providing steady cash flow to compete against the larger carriersLearn more about building your credit with transportation factoring.

Funding When You Need It, Without Debt

Transportation factoring is not to be confused with a loan. You won’t incur more debt or pay high-interest rates. Simply put, factoring is a cash advance for outstanding freight bills. Approval criteria for bank financing aren’t easy and are particularly tough for start-ups and small trucking companies. Even if you’re approved, the process is long and you’re saddled with debt that must be repaid.

With freight factoring services, you can choose which clients you’d like to factor and how often. Factor Finders offers both recourse and non-recourse truck factoring programs. If you’re a small fleet or owner-operator just starting up, factoring is a smart way to access working capital for growth.

Transportation factoring is debt-free and the amount of available funds grows with your trucking business. You also have the freedom to factor as-needed thanks to no minimum volume requirements. Trying to find the best factoring service for your trucking business?  We’ve got you covered.

Same Day Cash.. And More

Same Day Cash.. And More

We’ve been helping trucking companies just like yours with customized factoring services for years. Freight bill factoring enables your company to buy more trucks, hire additional drivers, and haul more profitable loads, thanks to the support of a freight factoring company. Thanks to factoring, you can attract new customers by offering longer payment terms. Transportation factoring also benefits freight brokers.

We work with an array of top-notch freight factoring companies all over the U.S. and Canada. We pride ourselves in learning about your company so that we can match you with the best transportation factoring company for your fleet.

The factoring company will handle all your account management, billing, and back-office tasks in order to allow you the time to grow your business and increase your profits.

Fuel Advances & Fuel Cards

Freight factoring companies give you more. Truckers can take advantage of fuel advances and fuel discounts that are available through factoring. Fuel advances provide funding upon load pickup. Fuel cards are accepted at nearly all major truck stops in the U.S. and Canada and provide significant discounts on fuel.

Common Questions

Here are some common questions about freight factoring:

  • What is freight factoring? Freight factoring is a financial service that allows trucking companies to receive immediate payment for their invoices by selling them to factoring companies.
  • How does freight factoring work? Trucking companies sell their outstanding invoices to a factoring company, which provides a cash advance. The factoring company then collects payment from the customers.
  • What are the benefits of freight factoring? Benefits include improved cash flow, the ability to cover immediate expenses, and the elimination of long wait times for customer payments.
  • What are the different types of freight factoring? The two main types are recourse factoring, where the trucking company is responsible for non-payment, and non-recourse factoring, where the factoring company assumes the risk.
  • How do I choose the right factoring company? Consider factors such as experience, reputation, transparency, contract terms, and fees.
  • What are the requirements for qualifying for freight factoring? Requirements typically include a minimum monthly invoice volume, a customer base with good credit history, reasonable days to pay, and a percentage of invoice needed for operations.

Freight factoring companies give you more. Truckers can take advantage of fuel advances and fuel discounts that are available through factoring. Fuel advances provide funding upon load pickup. Fuel cards are accepted at nearly all major truck stops in the U.S. and Canada and provide significant discounts on fuel.

Additional Resources:

Factoring for Owner-Operators

A Trucker’s Guide to Online Load Boards

Starting a Trucking Company? Here’s What You Should Know

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