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Trucking Factoring / Freight Factoring
Trucking companies all across the nation depend on freight factoring to run and operate their businesses. Freight factoring stabilizes your cash flow by giving you immediate cash for your freight bills upon load delivery. You don’t have to wait 30 to 60 days for your customers to pay, which enables you to handle more deliveries.
Freight bill factoring provides a complete financing alternative to negotiating with every single freight broker for which you deliver goods. Freight factoring companies handle all your invoices, no matter how many brokers you have. This is especially important for trucking companies that work with a large number of freight brokers such as C.H. Robinson, TQL, or XPO Logistics.
If you operate a trucking company, and your shipping customers and freight brokers have good credit but are slow paying their freight bills then you should consider hiring one of the top freight factoring companies to help you. Not only do you get cash advances, but you often receive other benefits such as fuel cards (e.g. Comdata, WEX Fleet One); fuel discounts; tire and maintenance discount programs, and free freight-matching load boards versus paying for loads on boards like DAT or Truckstop.com.
Freight factoring rates
Truck factoring companies offer rates as low as 1% for the largest carriers. Owner-operators and truck companies with one to five trucks can expect to pay at least 2.5 to 3% for freight factoring services, depending on monthly volume and customers. Freight factoring rates are very competitive, so shop around to find the best rates.
Trucking advance rates
Trucking companies enjoy the best advance rates in the factoring industry. Other types of businesses such as staffing or construction often carry advance rates of 85% or less, but trucking cash advance rates are often 95% or more. Some freight factoring companies fully-fund 100% of your freight bills, advancing the entire invoice amount less factoring fees.
Many freight factoring companies offer the option of non-recourse factoring which is a credit guarantee that protects you from customer non-payment due to credit issues. Non-recourse factoring usually costs more than recourse, but it may give you the peace of mind you need to sleep at night. Recourse and non-recourse factoring pertain only to non-payments resulting from credit issues such as insolvency or bankruptcy. You’re still liable for disputed claims, non-delivered goods or incorrect billing.
How freight bill factoring works
- Complete the delivery of goods to your customer and send your freight bill (or bill of lading) to your freight factoring company.
- The freight factoring company purchases your freight bills and sends you cash for up to 100% of the invoice (less factoring fees) within 24 to 48 hours.
- The freight factoring company collects payment from your customers and sends you any reserve as final payment.
Truck factoring companies advance you cash to keep your trucks on the road, but they also do much more. Trucking factoring companies typically provide back office functions such as credit checks on brokers and shippers; invoice generation and submission; receivables processing and accounting; as well as professional collections. These services are extremely helpful to any trucker, whether your a single owner-operator or a large carrier.
Speed is critical in the trucking industry, especially when you need to get paid for your deliveries. It’s why the entire trucking industry depends on freight factoring. Whether you’re an independent owner-operator, mid-size fleet, or large carrier, you’ll benefit from freight bill factoring for consistent cash flow. Freight factoring is the fastest way to get paid by your shippers and freight brokers, so you can deliver more loads and grow your business.