Trucking company owners have been relying on freight factoring for decades, but the benefits of factoring extend far beyond same day funding. Thanks to fuel advances and discounts as well as free risk mitigation through credit checks, freight factoring saves trucking companies a considerable amount of time and helps them manage their cash flow.
No matter the size of your trucking company or its credit score, freight factoring can help you stay in the black in a number of key ways.
The flexibility of factoring plans helps you access working capital you need right away while helping control your costs, without the challenges that are typically involved in obtaining traditional bank loans. Because freight factoring is in fact not a loan at all, you’re able to turn your freight bills into immediate cash without creating new debt. An experienced freight factoring company will offer plans that are custom designed for the trucking industry.
Advantages of Freight Factoring
Freight factoring companies offer top rate services to trucking businesses nationwide, and qualification is nearly guaranteed regardless of the financial history of your business. Factors largely make their funding decisions based on the credit rating of your customers, so as long as you are working with reliable and established shippers, you are more likely to be approved. The application can be completed in as few as 48 hours, and once you begin factoring your invoices you can receive same day funding.
The cash flow provided by freight bill factoring gives you a number of key advantages:
Take on more deliveries: factoring improves your cash flow right away and allows you to take on new contracts and new customers. The equivalent of a quick pay from the factoring company provides you the funds you need to meet overhead and other expenses required to take on new contracts.
Improved customer credit: Because factoring companies review the credit quality of your current customers as well as new customers you plan to take on, factoring helps you mitigate risk, allowing you to work with only the best.
Cash within 24 Hours
Whether you’re an established name or you’re just starting a new trucking company, freight factors only require a small number of supporting documents in order to complete the due diligence necessary, and once your account is set up you can begin factoring your invoices right away. Freight factoring companies will advance you upwards of 97% of the value of your invoices the same day you apply, and most factors accept scanned or faxed copies of the actual freight bills, which saves you on mailing costs and get you the cash you need faster.
Factoring freight bills can certainly help companies solve short-term cash flow issues, but many owners are thinking long term and are establishing freight bill factoring as a monthly alternative to cash freeze outs. Rather than waiting 30 or 60 or 90 days to get paid by your customers, a factoring line will help you grow your business because you’ll never be in want of cash to cover your needs.