How Freight Factoring Can Help grow your trucking company.

Posted in: Freight Factoring News- May 20, 2013 No Comments

Having a trucking company or freight brokerage can be very profitable. At the same time, transportation companies have cash problems. There are expenses like fuel, employees, repairs and many others that need to be paid constantly. However, most customers don’t offer quick-pays and usually pay their freight bills in 30 to 60 days.

This is an extreme business challenge. You have expenses that need to be paid quickly and customers that want to pay slowly. Unless your company has some available funds, you will most likely run into problems which eventually can damage your business.

Many trucking company owners try to address this cash problem by trying to get financing from their bank. Unfortunately, they soon learn that banks rarely provide business loans to small transportation companies. A business loan is not an option for most logistics and transportation companies. So what is the solution?

Today’s Trucking companies have an option that is better that a business loan. It is called invoice factoring. Factoring can provide trucking companies with the financing they need to meet their current expenses and grow as opposed to bank financing. Trucking Factoring is easy to obtain and can be setup in about a week.

What is factoring?

Factoring provides companies with an advance on your slow paying freight bills. This allows them to pay expenses while waiting to get paid by customers.

This is how it works:

1. You company delivers the load and invoices the customer

2. The factoring company provides you and advance of up to 90% of your freight bill

3. You can use the advance to meet all expenses

4. Once your customer pays, you’ll get the remaining 10% less a small factoring fee

The cost of factoring can be anywhere between 1.5% to 3% per month.

The cost is determined by your industry, the quality of your customers (who pay the freight bills)

The amount of financing you’re company requires.

Freight bill factoring is the perfect solution trucking companies or owner operators and can help bring your company to the next level.

To find out if factoring is the correct solution for you call 800.458.6056