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Our freight bill factoring financing program allows you to turn your slow paying freight bills into immediate cash - eliminating the wait. We provide you with the money to make critical payments to drivers and suppliers, while we wait to get paid by your customer. Freight factoring is very easy to qualify for, quick to set up and inexpensive to use.
Freight Factoring
Freight bill factoring is easy to use and widely accepted in the transportation industry. Here is how it works:
There are few businesses that are as cash flow intensive as a trucking company. The list of ongoing expenses can be endless and can easily overwhelm small and medium size trucking companies. There are fuel expenses, truck repairs, rentals and salaries. Although most trucking companies are very profitable, few can afford to wait the usual 30 to 60 days it takes to get paid for their freight bills.
Unless the trucking company has a significant cash cushion in the bank, waiting 30 to 60 days to get paid can cause serious problems. It can jeopardize existing operations and furthermore, it can prevent you from growing your business. The only way to get out of the cash flow rut is to find a way to capitalize on your slow paying invoices. The best tool to do this for a trucking company is called freight bill factoring.
Freight bill factoring enables the trucking company to get paid for their freight bills within a day of invoicing, eliminating the usual 30 to 60 day wait.. With a factoring agreement in place, you can stabilize your company’s cash flow and eliminate the stress of not knowing when you’ll be paid. Since freight bill factoring eliminates the worries of waiting for your payment, you will be free to focus on what you do best: running your business.
How can my Company qualify for freight bill factoring?
Most small and mid size trucking and transportation companies should qualify for receivable factoring. There are two main requirements to qualify fo factoring receivables. First, your company must do business with reputable clients or freight brokers. Second, your company must be free of tax problems. If you meet these two criteria, more often than not you will qualify. Most factoring companies are comfortable working with new businesses, so you should be able to qualify even if your company is a start up. Best of all, you can get a financing agreement in place within a few days.
What services does a factoring company provide?
The main benefit of working with a factoring company is that this will provide you with advanced funds on your freight bills. That means you can get paid very quickly after invoicing. However, most factors will also provide you with collections and credit protection as part of their services. This enables you to focus your energies and your staff on growing your company rather than on expensive and time consuming back office work.
Use Freight bill factoring for growth
Although many truck and transportation operators initially obtain factoring financing to avert the problems of dealing with slow payers, eventually most owners realize that invoice factoring can help them grow their business. It eliminates their biggest worry by ensuring that invoices get paid immediately, freeing up cash and enabling the owner to grow the business.
Trucking companies are one of the most cash hungry businesses in the transportation industry. There are driver expenses, equipment expenses and fuel expenses. However, trucking companies can also be very profitable, if cash flow is managed properly.
One of the main challenges that trucking company owners face is that freight bills can take as long as 60 days to get paid. This puts them in a tough spot, because unless the company has a significant amount of cash in the bank, it usually cannot afford to wait to get paid.
Usually, the owner will try to go to the bank to obtain financing hoping that a loan or line of credit might solve the problem. Unfortunately, banks will seldom finance businesses that have less than three years of audited financials that show consistent profits. Of course, if the trucking company could provide three years of financials that show profits, it would not need financing.
A better solution is to use freight factoring. Freight bill factoring enables you to convert your slow paying freight bills into cash by selling them to a factoring company. This provides you with immediate financing and allows you to cover all your ongoing business expenses. Also, as opposed to a business loan, freight bill factoring automatically grows as your sales grow, providing you with flexible business financing.
Want to get a free freight bill factoring quote? Call (866)931-5846. Capital Note Exchange
The process is simple. The factoring company buys your invoices and pays for them up front. The transaction is typically done in two installments. The first installment is called the advance and the invoice factoring company provides you with up to 90% of the amount. The remaining 10% is held as a reserve to cover disputes or charge backs. The remaining 10% (less a fee) is rebated as a second installment, once the invoice is actually paid.
The factoring fee is based on how long the invoice is factored for and the monthly volume of factored invoices. Discount rates average between 1.5% and 4% per month based on these parameters.
Most factoring companies buy invoices using a non-recourse invoice factoring. Under a non-recourse agreement, the factoring company bears the risk of nonpayment if your client becomes insolvent or goes out of business. This is a nice benefit of factoring and increases the peace of mind of business owners.
Freight bill factoring is an ideal solution for a new and emerging trucking company, and provides you with the necessary financing to operate and grow your business.
Want to get a free freight bill factoring quote? Call (866)931-5846. Capital Note Exchange
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