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Factoring Service

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Factoring Service

Truck factoring service — also known as freight factoring — allows carriers and owner-operators to turn unpaid invoices into cash. Essentially, a third-party freight factoring company for trucking will effectively buy those outstanding accounts receivable at an advance rate of usually 80% to 90% of the value and then collect on those unpaid invoices themselves. As the owner of a trucking company, you might feel like you’re playing a constant waiting game when it comes to being paid. Receiving payment for an invoice may take weeks, even months. Unpaid bills can wreak havoc on your cash flow and limit your business’s growth. Our factoring service can give you an advance on your outstanding invoices and collect the payment from your customer when the invoice is due..

Dedicated Lanes

30+

USA STATES

Top Paying Loads

4000+

Loads Booked

Why You Should Consider a Truck Factoring Service

Factoring in the trucking industry means someone else takes the risk of non-payment. For many trucking companies, even getting a discounted amount for invoices is well worth getting a freight factoring specialist for trucking companies since they have immediate funds with which they can pay overhead costs or even take on additional work to make more money.

The Benefits of Factoring for Trucking Companies

Swift capital upfront

There can often be a lag between taking on a job and then getting paid for it. While this is not always a problem — for example, while business is good and while company revenue is high — it can cause serious disadvantages for drivers in leaner times. It’s also not fair, as the truck driver has held up their end of the deal and has still not been paid.

A more reliable source of revenue

Forecasting and projecting for the future can be difficult for truck drivers. Even when orders are coming in, it is likely that many of the payments on these orders will be delayed, meaning that drivers cannot predict precisely when they will receive the money that is owed to them. This is a major issue, particularly when it comes to securing loans or investment for business growth projects. To put it simply, a lack of reliability makes it hard for truck drivers and owner-operators to grow their business in the way they’d like.

With a truck factoring service, this uncertainty is removed. When taking on factored orders and jobs, drivers are securing a reliable stream of income. They can then use this reliable income stream to prove their annual revenue, which makes it easier to attract investors, qualify for loans, and expand the scope and capability of the business.

Better flexibility solutions in terms of income

Some drivers may not like the idea of accepting a factored order. After all, when accepting this kind of order, the driver can only expect to receive around 80% or 90% of the total cost of the order, which may seem unfair as it is the driver who is doing the actual driving. However, the idea of factoring services for a trucking company or driver is that they accept this discounted rate so that they can connect with a more reliable payment.

This gives you flexibility as a truck driver or owner-operator. You can accept factored orders that provide you with a baseline of income — a regular stream of revenue that you can put your faith in. Then, you can enhance this revenue by taking on other orders at full payment. As your situation changes and you become more or less risk-averse, you may decide to shift the ratio one way or another — the choice is yours, thanks to this increased flexibility.

Reduced risk as a better service

An unreliable payment schedule is one thing, but the risk of not getting paid at all is an even more serious concern for truck drivers. Disputes with clients, unscrupulous customers, and a whole host of other factors can contribute to the risk of non-payment. For small trucking businesses or for truck driver owner-operators, this can be catastrophic. Too many businesses have run into serious trouble because they cannot secure the payments they are entitled to.

This is obviously a major benefit for truck drivers. With a truck factoring service, the risk of non-payment is taken on by someone else. You do not need to worry about receiving the money due to you, and you can focus on other — more positive — aspects of running your business.

How Trucking Factoring Works

The general process you encounter with trucking factoring is as follows:

You invoice your client for work done.

You assign unpaid invoices to a truck factoring service. If you are doing contract factoring (high volume), you are assigning all your unpaid invoices to the trucking factoring company. If you are going by way of spot factoring for trucking (low volume), you decide which invoices you will assign for truck factoring services.

The truck factoring company pays you the agreed-upon advance. Once everything is set up, this can be as soon as within 24 hours.

Your client pays the truck factoring service — it is now the responsibility of the factoring company to chase down clients for payment.

Once the invoice is paid, the factoring company will take its fee cut and then send you the balance.

 

Which is best for you: recourse or non-recourse factoring?

Your agreement for truck factoring services can be a recourse agreement or a non-recourse agreement.

If you have a recourse agreement and your customers do NOT pay their invoices, you are required to buy them back. The trucking factoring company may even charge additional fees. 

If you have a non-recourse agreement, once the factoring company is assigned the unpaid invoices, they belong to the factoring company. If the clients don’t pay, it is no longer your problem. As a consequence, the rates charged by factoring companies tend to be higher for non-recourse agreements.

Types of freight companies who factoring

Your agreement for truck factoring services can be a recourse agreement or a non-recourse agreement. Some of the pros of truck factoring include:

  • Few qualification requirements – This type of invoice factoring revolves around how creditworthy your clients are, so you won’t have many qualification requirements.
  • Almost immediate funding – Instead of waiting for the invoice due date to come and go before receiving the monies owing to you, you can get most of the sum upfront through the factoring company.
  • The more your business grows, the more financing you can get – This is because the value of the invoices you assign determines the amount of your advance. So, as you get more established, your advances can become larger.

Some of the cons of hiring a trucking factoring company include:

  • It can be expensive – In exchange for getting funds in advance through the trucking factoring service, you lose a portion of the sum owed to you (that is, the factoring company’s discount rate).
  • It can end up costing more if your client doesn’t pay the invoice – If you have a recourse factoring agreement, you are obligated to buy back the invoice if the customer doesn’t pay, and you will likely have to pay a fee to the factoring company.

Increase Your Trucking Business Revenue !

Apply Online or By Phone Call

Our Simplest Procedure To Help You Get Started

1

Contact Our Team

2

Email Documents

3

Sign Contract

4

Enjoy Loads

You are assigned with a dispatch manager to supervise dispatcher's daily operations and answer your questions anytime.

Required Documents For Truck Dispatch Services

 

 1-FMCSA operating authority  (MC certificate)

 2-W9 form (request for Taxpayer Identification Number   and Certification)

 3- Insurance (Certificate with liability cargo policies with us   listed as a certificate holder)

 4-Sign the dispatch agreement

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United Kingdom- Head Office
United States- 2nd Office
Canada- 3rd Office