Frequently Asked Factoring QuestionsYou've got questions about factoring for trucking? We've got answers.
What is Freight Bill Factoring?
Simply stated, freight bill factoring is the exchange of creditworthy freight bills, once the load has been completed, in exchange for immediate cash. Typically, funds are disbursed the same day that you present the freight bill to your factoring company.
I’m leased on to another carrier. Can I factor my loads?
Under these circumstances, because the load is not tendered to you under your motor carrier number, you will not be able to take advantage of factoring.
What are the factoring application requirements?
Getting set up is quick and easy. Simply complete our online application and then upload your supporting information:
• Copy of Driver’s License
• Copy of Articles of Incorporation/Organization
• Copy of Operating Authority
• Copy of Insurance Certificate
It will then take 1 to 2 hours for us to process the application. Once we approve your application, we will then send you our Factoring Agreement for signatures. And, once the Agreement is signed, we will be ready to begin looking at invoices for funding consideration.
Will I need to sign a long-term contract?
No. For most clients, our factoring agreement is open ended, and can be terminated at any time by giving us 30-days advanced notice of your intent to terminate. We are confident that you will like our service, and if not, you are free to leave without any termination fee or penalty.
Will my customers think that my business is struggling if I factor my freight bills?
No. Factoring is a widely used alternative source of business financing. Most freight brokers and shippers are familiar with factoring and how it benefits the motor carrier.
What other services do you provide?
Freight bill factoring is our primary focus. But, we know that cash flow isn’t the only thing that you need to succeed. We also offer:
• Fuel Cards
• Fuel Advances
• Online Credit Checks
Plus, our experienced staff can connect you with trusted sources for a myriad of other trucking-related services.
What is working capital?
Simply stated, working capital is the cash available for the day-to-day operations of your business. Often times your cash is not available because you are waiting for your customers to pay your invoices for services rendered. This is where factoring comes in. With a factoring program in place, you will no longer have to wait the 30 to 45 days it normally takes your customer to pay – the factoring company will give you cash now in exchange for your creditworthy accounts receivable. Voila – working capital!
How do I apply for factoring?
You can apply for factoring with Express Freight Finance by filling out our application form, and emailing us some documents. You can find out how simple it is and apply right now, here >
How will factoring help my business?
Factoring is really a cash flow tool. When you factor your freight bills, you are accelerating your cash flow – you get cash from us now and then we do the waiting for your customer to pay. Factoring your freight bills will give you steady, predictable cash flow to meet your monthly financial obligations. Plus, factoring will help you build and maintain your business credit because you will have the cash available to meet obligations on time. Additionally, factoring can help your business grow by providing the cash flow needed to take advantage of opportunities that you previously passed on due to extended payment terms. And finally, because your factoring company provides collections and credit management, you are freed up to focus on doing the things needed to grow your business.
Do I need more than 1 truck to be eligible for factoring?
Factoring your freight bills is an excellent way for the single-truck owner operator and the large fleet owner alike to ensure they will have the cash flow to keep their trucks rolling. As long as you run under your own motor carrier authority, and have the loads tendered directly to your company, you should be eligible to factor your freight bills.
What if you receive a payment on a load that I did not factor?
This is something that happens on a daily basis. If we receive a payment on a non-factored load, provided that your account is in good standing, we will forward that payment to you. Because you will have access to your account through our online client portal, you will always know when we received and posted payments on your accounts.
Do you offer a Full Advance?
Yes. Based on the overall risk, we can offer a deal structure where we hold no reserve. Our appetite to offer a full advance depends on your type of hauling operation. This is something that we typically offer to carriers hauling general truckload or less than truckload freight. Carriers who operate in other, more specialized segments of the transportation industry may not be eligible for a full advance do to the increased risk of short paid invoices or longer payment terms.
How can I tell if my customer is eligible to factor?
We will check credit for you on all of your customers for free. Additionally, you will have 24/7 access to our online credit checking database. This way, you will be able to confidently take a load any time of the day. Our free credit checking services will allow you to know up front if your customer is or isn’t a good credit risk. Now you can make an informed decision on whether or not to accept a tendered load.
Is factoring good for a small business or a startup?
Factoring is like rocket fuel for a small business or start-up. Trucking businesses get funding from factoring programs based on their debtors credit standing, not their own — so a business with little or no credit history can benefit from factoring. At Express Freight Finance – weather your fleet is one truck or 50 – we work hard to get you the working capital to be more competitive and to make real growth possible.
What if I have more questions?
Talk to us! We have the experience and know-how to answer your questions. Contact us here >
How long does it take to get set up?
This depends largely on how quickly you can complete and submit a complete application. We will move at your pace; but if you can move quickly enough, we can go from application to funding in as little as 24 hours.
Do I need good credit in order to qualify for your factoring program?
In most cases, no. Our primary focus is the credit strength of your customer. Our credit requirements are slightly different than what you might see with a bank. We are not overly fixated on your FICO score, but rather look at the comments in your credit report. Here, we are trying to gauge what we could expect in the event an invoice goes bad – will you help us recover? So, you may have a low credit score, but qualify with no problem.
Do you offer Non-Recourse Factoring?
Yes. Under a non-recourse program, we will assume the risk of non-payment should your customer fail to pay an invoice for credit reasons (i.e. insolvency or bankruptcy). Please note that with our non-recourse program, your factoring fee will be slightly higher due to the added risk that we assume.
Do I have to factor all of my accounts?
No. You may pick and choose the customers that you factor. Once you start factoring a specific customer, all payments from that customer will come to us.
Once I start factoring, how does my customer know to remit payment to the factoring company?
The first time that we see invoices to a particular customer, we will reach out to their accounts payable department and send them a Notice of Assignment (NOA). The NOA informs your customer that the right to payment on your invoices has been assigned to your factoring company, and that your customer is now obligated to remit payment directly to your factoring company until told otherwise by your factoring company.
Do I need great credit to get funding from factoring?
Your trucking business does not need great credit to get funding from factoring. We fund your accounts receivable, at a discount, based on the credit of your debtors.
Define factoring in finance.
In business finance, factoring your accounts receivable is the easiest and quickest way to create or accelerate cash flow. Setting up a factoring program is simple and quick – find a factoring company that offers the features that best suit your company needs, complete their set-up process, and then begin submitting your accounts receivable to the factor in exchange for immediate cash. At Express Freight Finance, we will work hard for you to get you the working capital you need to run your trucking business.
What is factoring?
Factoring is a type of business finance that has been used for centuries. With factoring, you are able to get cash out of your invoices several weeks before your customer pays your invoice. One definition of the word “factor” is – someone that actively contributes to an accomplishment, result or process. As your factor, let Express Freight Finance contribute to your success by giving you cash now for your creditworthy freight bills.