Author: Violet Gray

What Every Transportation Freight Company Should Know about Factoring


calculator-385506_640Waiting days to receive payment on customer invoices can create an unnecessary financial strain on any business, especially firms in the transportation or freighting industries. Toiling to pay shippers, suppliers, and other third parties immediately while experiencing long wait times for payment for services can hinder business growth, or even put a transportation or freight company completely out of business.

How to get Started

To be eligible for invoice factoring, your company must issue bill or invoices on terms not exceeding 60 days. Any company can submit their bills (not a just truck or freight companies) as long as they meet this requirement. Once you have some invoices that haven’t been paid yet, you send the freight bills and accounting receivables that you wish to receive cash for to a truck or freight factoring company.

Get Paid Fast

As soon as you have been approved (it’s usually a very short approval process; some companies qualify in as little as 24 hours), the freight or truck factoring company will then advance you a percentage of the total amount of your customer invoices, minus a small cost or fee. These values are determined by how quickly your customers submit payment for invoices, the total volume of invoices to be factored, the total monetary sum of the bills, and the length of the contract.

Solve Your Cash Flow Problems

Factoring provides quick funding that you can use in any way for your business. With a loan or line of credit from the bank or other traditional lending institution, you are usually required to specify exactly what you will be doing with the money you receive. But with factoring you can do whatever you want – it’s your money after all. Some of the many things you can pay for with the funds you receive include (but are not limited to):

– New trucking, freighting or transportation equipment
– Rent
– Licenses and tax deposits
– Payroll
– Office equipment
– Advertising and marketing materials and services

There’s Nothing to Repay

Factoring is not a loan or credit line, so there are no monthly payments and nothing to pay back. For many factoring companies, once they buy your invoices they take on 100% of the risk. This is known as truck factoring with non-recourse.

Focus on Your Business

With factoring, you don’t have to worry about when payments are going to come in, and you don’t have to spend all your time hassling clients to pay. You are entirely free to focus your time and company resources on more profitable things than accounts receivable activities. Once your cash flow has improved, you can stop sending in your invoices. (Assuming you have agreed to a long-term contract.)

Trucking companies and freight brokerages play a vital role in our country’s economy, but because of the nature of the business, many transportation companies struggle. There is a way out, however. Let invoice factoring services solve your cash flow problems today.
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The Importance Of Knowing Financial Details In Running A Truck Deliveries Company


locuri-de-munca-pentru-soferi - CopyWhen you start your truck business then there may exit a lot of query. Do you have more money a month in order to put fuel into your one truck? Do you have sufficient money to pay for truck repairs for a month? Do you have sufficient money to pay for unforeseen expenses?

If you are planning about starting up, or previously run your own trucking corporation and require cash while you wait to get paid, you require to get set up with one of the most excellent truck factoring companies so you can gather early on your accounts receivable i.e taking help of factoring services.


Factoring defined by the vocabulary is when a company sells its accounts receivable to a financial institution so as to receive cash in order to operate their business.

If you are bearing in mind going out on your own and become an owner operator then you may need a number of operating funds to keep you afloat. A lot of of the customers take 30 to 60 days to pay the truck drivers. Even the big trucking outfits lose out when a client goes belly up.



If you put a few hundred dollars in the fuel tank only 25 times in one month then that is roughly is about 15K. This is not set in stone but it is not out of the normal. How can you probably have that much cash to put into the truck if you don’t have a few operating money? The factoring business will buy your bills images (9)from you and after that front you about 80 percent of the total amount of the bills. Your longevity and the amount of risk that you obtain when accepting loads will also factor in to how a lot they will give to you.


The dimension of your fleet will also be a factor. If you are all by yourself a few of the companies won’t even give you a chance to work with them. If you can enter with one then you are also required to call them every time you accept a load from a new client. Not all clientele pay. When that happens the factoring business is going to desire their money back. Usually they will give you approval to use a business and then they guarantee payment. An instance may be a load that pays few thousand and the factoring business has a limit with this particular business of more dollars. If the client didn’t pay for whatever reason then the factoring business eats the non-payment party and then sues the non paying client.

Once the purchaser pays and everything is cleared after a preset time between you and the factoring business they will return more of your funds to you. Once more this is determined in the contractual Motorcycle-Truck-Tractor-Tr - Copyphase. Remember we said that they paid you around 80 percent and the other is kept in reserve. After the phase is over they may send another 10 to 15 percent. Maybe even additional, but you have to make certain prior to entering into the agreement with them.

The Most Excellent Way To Run Your Transportation Business

The most excellent way to run your transportation business is use of factoring services. Factoring is a mainly good option if you have limited or a poor credit history: as qualifying is based on the credit of your clientele, as opposed to your own
Hence from this article it is clear that Factoring is a very good option to start a new truck business