Bank Loans Vs. Freight Factoring

Having a hard time obtaining business funding? You definitely are not alone. A 2014 survey of small businesses said that a full 44 percent of businesses that applied for credit were turned down for various reasons, like poor credit scores, lack of collateral or weak business performance. Working capital has become harder to secure from traditional sources. However, there is an alternative; freight factoring can get you the cash you need quickly and with minimal hassle.    

Freight factoring is also called invoice factoring or invoice financing. These names are pretty self-explanatory. The factoring company advances you cash based on your accounts receivable invoices. Factoring can help reduce risk and sometimes pay less. So, if you need funding, check out factoring.     

Quick approval and fast cash

Loans have long application forms, require lots of documentation, and take several days to a week for approval (or rejection!). Invoice factoring applications are simple, and you generally have your money in 24 hours.   

Low costs and no interest 

With a loan, your interest rate, payment terms and loan amount can drive up the total cost of what you pay back. Conversely, freight factoring allows you to receive cash upfront, make no interest payments or monthly payments. The funds are not a loan; instead, you are selling your invoices for work that is already done at a slightly discounted rate. 

Less risk and stress 

Getting a business loan can be risky. If you do well, and manage the business responsibly, paying back the loan might not be a problem. But what if business is not as good as expected, or you have an unexpected expense? Can you still pay your loan payment? Otherwise, you risk late fees, fines and possible insolvency. With freight factoring, you are simply getting your own money sooner. No debt at all. 

Rinse and repeat

With freight factoring, you can continually sell your invoices to the factoring company. No additional applications or paperwork. As long as you meet the requirements, and your clients pay reliably, you can use freight factoring as part of your growth plan. If your company needs access to quick funds, call us today to get started.