We factor a lot of freight invoices for transportation companies and truckers and therefore get a lot of good questions thrown our way. Here are four of the most common questions we hear regarding freight factoring:
1. Why would a company want to use freight factoring?
Freight factoring is an immediate source of cash. Most transportation companies can’t afford to wait weeks–even months–to get paid. They need strong cash flow to meet immediate financial demands. Freight factoring provides quick, affordable cash and eliminates the hassle of trying to collect from customers on your own. Many transportation companies use the fast access to their cash to grow their fleet or fund their next job. It can be more advantageous to use freight factoring than securing a bank loan for investing in company growth.
2. How much does freight factoring cost?
Typically, freight factoring costs just a few cents on the dollar. We outline a couple of options so you can decide which works best for your company. Our rates are competitive and many companies find freight factoring often pays for itself because they can put the cash to work for their business faster than if they wait to get paid. Keep in mind freight factoring is not a loan; your just getting access to your money faster for a small fee. In fact many transportation companies offer incentives for their client to pay invoices faster such as 2/10 net 60, which means they’ll discount their invoice 2 percent for the client to pay in 10 days rather than 60. With freight factoring you’re paying the factoring company a percentage to get paid even faster – often in 2 days or less!
3. What will my clients think if I use freight factoring?
Freight factoring (and factoring in general) has been around for quite a while; it’s more common than you think. Many of your customers are likely larger firm that have worked with factoring companies before. They understand that a factoring company knows the ins and outs of the accounts payables/receivables process and has years of experience in working with companies for collections. This intimate knowledge of the invoice process makes their jobs easier. In addition, most seasoned factoring companies are positioned to deliver the highest levels of expertise and service – not only to you but also to your customers. This simply means that their job is to not only help you manage cash flow, but manage customer relationships on your behalf. This is certainly in the factoring company’s best interest, but also yours as well!
4. Do you have a trial period?
We do! You can try our freight factoring solutions risk free for 90 days. In that time it’s up to us to show you the benefits that getting fast access to your cash can deliver.
Freight factoring not only delivers faster access to your cash, but there are other benefits for transportation companies and truckers as well. We offer access to a free load board, discounts on tire pressure systems, insurance, truck leasing, tire discounts and roadside assistance. Be sure to check out our freight factoring solutions page on our website for even more great benefits!