Choosing a freight factoring company that works for a trucking company’s business model can make a huge difference in the profitability and sustainability of the business. Whether a company is just exploring the idea of freight factoring or is looking to switch to a new freight factoring service, it can be complicated to choose the right one.
We’re offering our five top tips for choosing the perfect freight factoring partner.
Top 5 Tips for Picking the Perfect Freight Factoring Partner
1. Determine What You Need from Your Factoring Company
Every trucking business is different. That means that what they need from a factoring provider and the benefits that will serve them the best are different.
When choosing a factoring company, it’s important to consider how a factoring company can best serve you.For example, an owner-operator could benefit from instant payments to make sure a lack of cash flow doesn’t hold up operations. A program like Express Freight Finance’s DropPay can offer instant payments as soon as a load is delivered, 24/7, 365 days a year. Call us at 855.DROP.PAY to learn more.
2. Shop Around
You don’t have to sign up with the first factoring company you look at. Shop around a little. Find a company that is a good fit financially and operationally. Check out several companies and compare reviews. If you can, speak with someone you personally know whose trucking uses or has used the factoring company.Even once you’ve decided a company is a good fit, you may need to choose between different factoring programs. Recourse and non-recourse factoring may be offered, and they may offer factoring services with different levels of support.
3. Dive Deep into Terms and Fees
Different companies and different types of factoring come along with varying terms and fees. It’s important that as you’re looking for the right fit from a factoring company, you’re exploring those terms and fees included in the freight factoring contract and seriously considering what they’ll mean for your business.
Look at the fee structure and consider your true cost of factoring with each company candidate. Include startup costs and how the factoring company will collect on each invoice they collect for you.
Examine the terms to see how long you’ll be locked into a contract with the freight factoring company, what it will mean if you decide you want out of the contract, and the steps you’ll need to take to do that.
4. Learn About Customer Service
Almost everyone has considered switching their cell phone or cable provider due to poor customer service at some point in their life. When customer service is lacking, it can make it difficult to use the product or service as intended if issues arise.
Different companies and even different factoring programs within the same company may offer different levels of customer service. Be sure you understand how a factoring company’s customer service department can help you resolve any disputes or issues before you decide which is best for you.
It’s also important to check reviews and testimonials on a company’s level of customer service. Whether or not they execute well on the promises they make regarding customer service can make or break your experience with the company.
5. Don’t Discount the Extras
The right freight factoring partner will likely offer more than just freight factoring services. Many factoring providers offer things like fuel cards, access to technology like Express Freight Finance’s MarketFit tool, partnerships with other technology companies like TMS providers and load boards, and equipment finance.
By choosing a freight factoring company that offers additional services that will serve your trucking business, you can streamline operations, cut expenses, and improve your bottom line.
Conclusion
Choosing the right freight factoring company can dramatically affect your trucking company’s experience with factoring. By considering what you need from your factoring partner, exploring your options, carefully considering the contract, and taking into account additional services, you can choose the perfect freight factoring service for your trucking company.
