What is Freight Bill Factoring?
Trucking company owners know that cash is king and prompt paying clients are critical to the company’s success. But, what can you do if you get a good client that insists on paying their invoice in 30 days or more? How do you pay fuel, drivers and repairs while you wait to get paid?
In the past, the only option you had was to take the client and grit your teeth.
However, there is an option that has been gaining popularity with the trucking community. It’s called freight bill factoring. Freight factoring eliminates the payment wait and gets your freight bills paid in a couple of days. But, transportation factoring is very different than a business loan. It works by selling your freight bills to a freight factoring company, who pays you for them and then waits to get paid by your customers/freight brokers.
Transportation factoring can be easy to use and works as follows:
- You deliver the load and issue a freight bill
- You sell the freight bill to the factoring company, who pays you a first installment of 90% to 95% of the freight bill
- You get immediate money while the factoring company waits
- Once the factoring company gets paid, any remaining reserves (less a small fee) are returned as your second installment
Freight factoring rates vary, but they go from 1.5% to 3% per 30 days depending on volume, duration of transactions and customer selection. A factoring line can be established in a little as 3 days, provided you have all your company documentation in order.
Factoring rates as low as 1.5% (based on volume). For an instant factoring quote please click here or call toll free at (877) 300 3258 to speak to an associate
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