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Checklist: How to Choose the Best Factoring Company

Last Modified : May 13, 2024

Fact-checked by: Bruce Sayer

You’ve made a great decision – to leverage your accounts receivable and access fast cash by factoring your invoices. The next step is to find the best truck factoring company to meet your financial needs. It is important to choose a factoring company that understands the trucking industry, provides best-in-class freight factoring, and offers industry insights and expertise to help guide your business to financial strength.

Choosing a financial partner is critical to ensuring reliable cash flow and immediate access to capital when its needed. Know how to choose the best truck factoring company for transportation. Look for an experienced truck factoring company that offers the best factoring rates, cost-saving services, and exceptional customer service.

Aren’t all factoring companies the same?

No! The speed, accuracy, and dependability of funding, as well as the level of service provided by invoice factoring companies, can vary significantly.

The global invoice factoring market was valued at USD $2,740.47 billion in 2022 with an anticipated CAGR of 8.16% from 2023 to 2032. The transportation industry is one of the largest users of this expanding industry. This, in large part, is due to the efforts by the best truck factoring companies to tailor specialized services designed to accelerate cash flow, save money, mitigate risk, and make the lives of truck company owners easier.

Be careful when choosing a factoring company – they are not all the same! Ensure they understand your business and the industry.  The best truck factoring companies have specialized services offering advantages and real value to help elevate your competitive advantage and enhance profitability.

Increase profitability with the best truck factoring companies

In addition to providing fast cash, the best truck factoring companies are specialists in credit analysis and invoice collection. These factoring companies offer expertise and online systems that allow you to verify customer credit information before you haul, seamlessly submit invoices, and track customer payments in real-time. These benefits help ensure reliable funding while significantly reducing incidents of fraud and bad debt to protect your bottom line.

In addition, when you work with the best truck factoring companies, increased profitability is further enhanced with cost-saving services such as a robust fuel discount program.

The best truck factoring companies are rooted in experience

Efficiently managed trucking businesses can thrive and grow even during freight recessions. Trucking companies that leverage financial strength to focus on strategy, operations, and execution to deliver the best in service have a competitive advantage.

The best truck factoring companies are rooted in experience. These reputable lenders offer industry-leading freight factoring, a specialized form of transportation factoring designed to enhance trucking companies’ financial strength.

The best truck factoring companies are experienced and have served the industry for decades. These lenders have led the evolution of fast, efficient funding for transportation companies. Through innovation and technological advancements, these financing specialists have increased the speed of funding to minutes and maximized access to capital. By developing custom online tools and calculators they help improve operational efficiencies and mitigate financial risk. In addition, these experienced lenders have the knowledge, industry insights, and expertise to help guide your trucking company through the challenges of disruption, volatility, and uncertainty.

Most importantly, the best truck factoring companies have been there and done that. They have experienced the same market fluctuations that have rocked the trucking industry since the 2008 Great Recession. These are the lenders who will step forward with a solution-focused approach to ensure reliable funding during financial distress, rapid growth, or transition.

It is essential to find a good fit when looking for a funding partner for your business. Factoring services provide easy and convenient access to working capital, but only if you have chosen a truck factoring company that works well with your organization and customers.

The best truck factoring company checklist

Use the following checklist to assist you in choosing the best truck factoring company for your business:

Integrity

  1. Does the freight factoring company provide full transparency with online accounting and regular reports?
  2. Are the factoring rates easy to understand and simple to calculate?
  3. Do the factoring services come with hidden fees or surprises?
  4. Are there any potential delays in the funding process?

Reputation

  1. Check the factoring company’s website for reviews, testimonials, or case studies.
  2. Ask the factoring company for references. Speak to their existing customers (your fellow truckers) and ask about their level of satisfaction.

Superior Customer Service

  1. Is their customer support service prompt and helpful?
  2. Does the factoring service include a responsive and knowledgeable customer service team to work directly with you and streamline services?
  3. Does the factoring company communicate with you and your customers in a courteous and professional manner?

Experience

  1. How long has the factoring company been in business?
  2. Does the factoring company truly understand trucking…not just from a lender’s perspective, but from actual hands-on experience?

Do they offer non-recourse factoring?

Another option to consider when shopping for invoice factoring is non-recourse factoring. Unlike traditional factoring, in non-recourse factoring, the factor assumes the risk of non-payment by the original debtor. If the debtor doesn’t pay the invoice, the business is not required to repay the factor. This method allows businesses to obtain immediate liquidity without the liability of potential non-payment by their customers. Not all companies that offer non-recourse factoring cover the same liabilities. You can find some things to look out for in our blog, Top 8 Things to Understand Before Signing A Non-Recourse Factoring Agreement.

Who is the best truck factoring company for your fleet?

When looking for the best truck factoring company for your fleet, choose an industry leader with extensive experience in transportation financing. eCapital has been recognized as one of America’s fastest-growing private companies. We have been in business for over 25 years and specialize in providing financial services to the transportation industry. Our low-cost funding solutions improve cash flow are convenient to use, simple to understand and easy to manage.

eCapital’s team of knowledgeable account managers ensures you receive superior customer service. You’ll get trusted advice from industry-experienced staff to help with credit decisions, expedite funding, and answer all queries. Our specialized truck factoring services include fuel discounts, access to an exclusive broker network, and a free credit search tool to reduce risk and maximize your bottom line.

For more information about convenient, cost-effective freight factoring and cost-saving services to improve your profitability, contact us today.

Takeaways

  • Choosing a financial partner is a critically important decision – choose carefully.
  • The speed, accuracy, and dependability of funding, plus the level of service provided by invoice factoring companies can vary significantly.
  • Use a checklist to select a truck factoring company that works well with both your organization and your customers.

 

ABOUT eCapital

Since 2006, eCapital has been on a mission to change the way small to medium sized businesses access the funding they need to reach their goals. We know that to survive and thrive, businesses need financial flexibility to quickly respond to challenges and take advantage of opportunities, all in real time. Companies today need innovation guided by experience to unlock the potential of their assets to give better, faster access to the capital they require.

We’ve answered the call and have built a team of over 600 experts in asset evaluation, batch processing, customer support and fintech solutions. Together, we have created a funding model that features rapid approvals and processing, 24/7 access to funds and the freedom to use the money wherever and whenever it’s needed. This is the future of business funding, and it’s available today, at eCapital.

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eCapital Corp. is committed to supporting small and middle-market companies in the United States, Canada, and the UK by accelerating their access to capital through financial solutions like invoice factoring, factoring lines of credit, asset-based lending and equipment refinancing. Headquartered in Miami, Florida, eCapital is an innovative leader in providing flexible, customized cash flow to businesses. For more information about eCapital, visit eCapital.com.

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