Improve Cash Flow Instantly with Truck Invoice Factoring
Have you heard about invoice factoring for trucking companies?
Ever wonder how this alternative lending option can help your business?
Even the most successful transportation companies deal with cash flow struggles. Trucking factoring is a fast and affordable way to achieve steady working capital. If you have truck factoring questions, we’ve got answers. We’ve compiled a handy guide to cover all the basics of invoice factoring for truckers. By the time you reach the end of the page, you’ll be on the road to becoming an expert on the ins and outs of factoring.
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The Ultimate Guide to Truck Invoice Factoring
What are the advantages of truck factoring?
Trucking companies choose invoice factoring when they don’t have cash on hand to cover their expenses, usually because of slow-paying customers. Truck factors will purchase your open bills of lading and advance you cash against them, so you can cover your expenses even if your customers take 30, 45, 60 days or more to pay.
What is the truck invoice factoring process?
The freight factoring process is simple, designed for truckers to complete even while they’re on the road. When you deliver a load, send a copy of the bill of lading to the truck factoring company. They will verify it and deposit a percentage of the invoice amount directly into your bank account. You can use those funds to run your business, and the factor will collect payment from your customer. Once the factor collects, you get the remaining amount due you minus their fee.
How do I apply?
Start here. You can get started with truck factoring by filling out a simple application. You will also need to send your company’s Articles of Incorporation, a customer list, and a current aging.
Will I qualify for trucking factoring? What if I have bad credit? Or no credit?
You can qualify for truck factoring even if you are just starting up, have poor business or personal credit or no credit at all! Trucking factoring companies look at your customers’ credit and payment history to make their decision. If you have an authorized motor carrier number and valid unpaid freight bills, you can get started today. Learn more about factoring freight bills with bad credit.
What are the costs of factoring trucking invoices?
Factor Finders’ truck factoring partners offer industry-low rates for service. Fees are structured as either variable, a small percentage for the amount of time a freight bill goes unpaid, or flat, a one-time fee regardless of how long the freight bill remains open. The factor will take their fee from the payment before sending you any remaining balance.
Example of variable factoring fees: 2 percent for every 30 days the freight bill remains outstanding.
Example of flat factoring fees: 3 percent of the invoice, whether the invoice is open 30 days or 90 days.
Transportation factoring fees vary on multiple factors including your monthly volume and whether you choose a recourse or non-recourse program. (Hint – recourse factoring tends to have lower fees)
How fast can I get cash ?
Truck factoring is one of the fastest ways to access cash to operate your business. Once approved, the factoring company verifies your freight bills and deposits your advance within 24 hours. You can request same-day or next-business-day transfers. You can also have the funds deposited on your fuel card.
What additional services do truck factoring companies offer?
Truck factoring involves more than a cash advance. Your truck factor will offer back office support, such as credit verification for your customers, as well as online reporting you can access no matter where you are. Other freight factoring services include:
- Fuel cards that you can use at thousands of refueling stations across the United States and Canada, which are eligible for discounts and rebates
- Fuel advances of up to 50 percent of your freight bills when you pick up a load
- Free credit checks
What is the difference between recourse and non-recourse factoring?
Truck factoring companies provide recourse and non-recourse factoring options:
- Recourse truck factoring requires you to assume the risk of an unpaid freight bill. A bill that goes beyond the recourse period in your contract will become your responsibility to buy back. Lower fees are a benefit of recourse programs.
- Non-recourse truck factoring puts the risk of unpaid freight bills on the factor, so you get (and stay) funded whether your customer pays or not. This method of funding uses a flat fee structure, so you get all of the cash you will receive on that freight bill up-front.
How can factoring invoices help my trucking business grow?
A thriving business is the most important reason for factoring trucking invoices. Here are a few ways you’ll benefit:
- Avoid adding new debt to your balance sheet.
- Pay your bills on time and take advantage of early-pay discounts to save even more money and build your credit.
- Use fuel advances to cover the cost of more lucrative loads.
- Connect with new customers through your factor’s load boards.
- Take advantage of free online credit checks for your customers.
- Save big on fuel costs with fuel discount cards. Fuel cards can be used at almost all major truck stops nationwide.
Ready to Start Freight Factoring & Grow Your Trucking Business?
Our team understands the transportation industry and we’re ready to assist with your funding needs. Our freight invoice factoring services are flexible and designed for trucking companies of all sizes and stages. Get the freight factoring services and programs you need – with the low rates you want.