Freight factoring is a common funding method in the trucking field. But many companies are not familiar with the specifics of this form of funding.
Here is a look at 8 things you need to know about freight factoring.
#1. It’s quick.
You get immediate funds when you use freight factoring. You no longer have to worry about when you will get paid after delivering the load.
#2. It’s efficient.
Many freight factoring companies actually handle the entire invoicing process, saving you staff time and resources. They do the invoicing, process the invoices, pay the postage and collect the money.
Most companies will send funds based on copies that are faxed or scanned. You don’t have to worry about sending hard copies.
#3. It puts your assets to work.
Using freight factoring is smart. Your assets can become a source of funds, without putting you in debt.
#4. It saves money.
You can save on fuel with fuel cards when you factor. Use the money you save to grow your business.
#5. It’s a good way to handle overhead.
Get peace of mind knowing that the factoring money will pay for maintenance, fuel, payroll and other overhead expenses.
#6. It’s easier than a bank.
Banks approve loans based on your credit history. With factoring, this is turned around. The freight factoring company looks at the creditworthiness of your customers.
#7. It gives you leverage.
If you have an opportunity to negotiate a better rate for your loads or in another area of your business, you can take advantage of it. That’s because factoring provides immediate cash flow with no delays.
Factoring stabilizes your finances. This means you can do a better job of budgeting, planning and forecasting future expenses. You can safely take on new clients to grow your trucking business.
#8. It works with all types of trucking.
Just about any company that works with invoices qualifies for freight factoring. It is common in flatbed, refrigerated trucking, specialized loads, dry van and others freight work.