Freight factoring for the transportation industryPosted by Brewer Jones on June 17th, 2021 Managing cash flow is critical for a trucking business. Truck payments, maintenance, fuel, insurance, payroll, and taxes are costs that do not go away. The best solution is freight factoring. Freight factoring is when your company's accounts receivable are converted into cash by selling outstanding invoices of freight bills of lading to a factoring company. Instead of waiting 30, 60, or 90 days for a load to be paid out, a factoring company will get you that money immediately for a service fee. What is freight invoice factoring, and how does it work? Freight factoring is a simple way for small and large fleet owners, brokers, and owner-operators to sell unpaid invoices to a factoring company at a slight discount. You get to infuse cash into your trucking business right away—no more waiting weeks or months to get paid. Simply put, freight invoice factoring gives you up to 98% of your unpaid invoices within 24 hours so you can get back on the road and take on more loads. By partnering with a factoring company, you can keep your wheels turning and continue growing your business every day. Freight invoice factoring can quickly give your trucking business the boost it needs to grow. Here is a quick overview of how freight invoice factoring works: 1. Deliver the load: You pick up the freight, deliver it, and get your paperwork signed. freight bill factoring company 2. Send over the paperwork: Submit the invoice, rate confirmation, and bill of lading to the factoring company who will verify load delivery. The factor then knows there are no freight claims or issues preventing payment. 3. Get paid in advance: The factor buys your invoice and pays you an advance of up to 98% of that invoice within 24 hours. It is usually deposited directly into your bank account. Or, if you prefer, it can be applied to your fuel card. 4. Receive the reserve: The unpaid remainder is called the reserve. You get it minus a small fee when your customer pays the invoice. What are the benefits? Freight invoice factoring can help a wide range of transportation businesses, including freight brokers, large fleets, and owner-operators. It offers a simple solution for freight companies to increase cash flow and better predict when payments will come in. Bank loans require good or established credit and might be a non-starter for owner-operators or fleet owners just getting started or others who might have hit a rough patch. Freight factoring gives you the ability to have your invoices advanced to you without putting your company in debt. You can use freight invoice factoring to help you pay your drivers, pay for gas and repairs, and even buy new trucks. The best part is that it is your own money you are using. It has just been advanced to you. There is no debt you need to worry about.Like it? Share it! |