Choosing the Right Trucking Factoring Company
How to Choose the Best Truck Factoring Company
Simply put, the best truck factoring companies know the ins and outs of the trucking industry. You want to do business with a truck factor who knows that wheels aren’t the only thing that keeps trucks moving. In other words, you need a factor who can get you the green so you can stay on the blacktop.
Carriers use factoring as a way to get paid sooner for loads delivered. Trucking factoring companies buy your freight invoices at a discount, giving you instant cash from your invoices. The money is yours — you’re just getting it faster in order to pay expenses and grow your business.
What is Trucking Factoring? How Can it Help You?
Factoring provides immediate funding for your unpaid freight bills. This ensures you’ll be paid the same day, instead of waiting weeks or months for your customers to pay. Many companies choose freight factoring because it provides the reliable cash flow necessary to haul more loads and grow your business. If your company is continuing to grow at a rate that you can’t keep up with, truck factoring could be extremely beneficial. There is also no need to be worried about the current state of your credit. There is a good possibility that you could be approved and receive funding within 24 hours with little or no credit history.
There are over 50 invoice factoring companies in the US that provide services for truckers, so it’s important to find the factor that best fits your needs in the transportation industry. Freight factoring rates, services, and programs vary, but we’ve highlighted a few things to consider when choosing the best factoring company for your trucking company.
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What Truckers Should Look for in a Freight Factoring Company
The best truck factoring companies will get the cash in your hand in as little as 24 hours. If you’re currently factoring loads, but not receiving the funds within 24 hours, it’s time to find a new factoring company that can make the process faster for you.
Working with a truck factoring company is supposed to be quick and easy. Even if you have been rejected by traditional lenders, the best freight factors should approve you with no problem as long as your customers are creditworthy. Many trucking factors offer no application fees. So, if you don’t want to pay a setup fee, know there are lots of factoring companies that do not require it.
You don’t do business with a company, you do business with people. A good truck factoring company for trucking will assign you a personal account manager to help keep everything running smoothly on your behalf. The account manager should be available to answer any questions you have. After all, you are paying for the service.
You should have the option of choosing between two types of freight factoring: recourse (you are liable for unpaid invoices), or non-recourse (the factor is liable for unpaid invoices). The factoring company should discuss the pros and cons of both programs and let you decide which option works best for your business. Keep in mind that non-recourse trucking factoring will be slightly more expensive.
The top truck factors should offer additional truck factoring services for owner-operators and small fleets. Additional freight factoring services may include:
- Fuel card programs
- Free credit checks
- Complimentary load board access
- 24/7 online account access
- Professional collections services
- Insurance assistance for new trucking companies
Funding on Copies
Fast cash is essential for truckers. That’s why it’s important to find a truck factoring company that accepts copies, faxes, and scans for funding. Submitting originals for funding isn’t just a pain, it’s also expensive.
No Minimum Volume Requirements
You should have the freedom to choose which freight bills to factor and when you want to factor them. If you haul for certain brokers or shippers who pay on time, you shouldn’t be required to factor for all of your clients. Flexibility is important when choosing a truck factoring company. Find a freight factor that’s willing to fund on your terms.
Is upfront cash for fuel a must-have? If so, choose a trucking factoring company that offers fuel advances for truckers. Many factors offer up to a 50% cash advance for fuel upon pick-up of a load. Fuel advances ensure that you’ll always have cash on hand to keep your tank full and accept better-paying loads.
Flexible Contract Terms
Before signing a factoring agreement, know the contract terms. If you don’t want to be locked into a year-long contract, find a factor that offers a month-to-month agreement. There are plenty of these truck factoring companies out there that offer this type of flexibility.
What About Freight Factoring Rates?
Without a doubt, cost is important. So, what should you really expect to pay? To start, freight factoring companies calculate rates based on billing volume. The higher your volume, the lower your fees. Many truck factoring companies offer a flat fee structure with no reserve. This means you pay a one-time fee no matter how long your customers take to pay. It also means that you’ll get the full advance upfront.
Truck factoring rates also vary by whether it’s a recourse or non-recourse program.
- Non-recourse trucking rates can range from 3%-5% on average for 1-5 trucks.
- However, with 5-10 trucks, non-recourse rates from 1.5% – 2% are often available.
- Typical recourse factoring rates range from 2%-3% for 1-5 trucks.
- A company with 5-10 trucks can find funding that ranges from 1%-2%.
Please note that these are average freight factoring rates and that fees will vary based on the funder and deal specifications. If you’re looking for the best freight factoring rate, let us know. We know where to find them.Get a Quote
How to Find the Best Freight Factoring Companies for Trucking
You do enough running (errr.. driving?) around. Let us do the “legwork” for you when it comes to funding your business. We specialize in freight bill factoring, and our account managers will work tirelessly to get you the cash you need with no hassle or hidden fees. Worried about a credit check? Don’t be. Even with a poor credit history (or no credit history), you’ll likely be approved for factoring. Currently factoring? Let us find you a better factoring deal.
Tell us what you want & we’ll help you find it.
It’s that easy.
How Does Factoring for Trucking Work?
The process of trucking factoring is simple, which is why it’s such a popular form of funding in the transportation industry.
Step One: 1. Find the best factoring company for your trucking company. This is where we come in.
Step Two: 2. Serve your customers as usual.
Step Three: 3. Submit the invoices you want to fund to the factoring company
Step Four: 4. The truck factor will verify the invoices with your customers.
Step Five: 5. You will receive the cash advance for the invoice within 24 hours.