Why Choose a Freight Factoring Company Rooted In Experience?
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Fact-checked by: Bruce Sayer
Trucking is a capital intense industry. For a majority of trucking companies, reliable, flexible funding is an absolute necessity to keep hauling. To grow the business, expanding credit limits and uninterrupted access to working capital are often needed. A financial partner who understands this and is willing to work with you to support your financial goals can make the difference between success and failure. To serve as a trusted financial partner, your factoring company needs to understand the complications of the trucking industry and have the capacity to respond expediently when needs arise. As a result, the best factoring company suited for your trucking business should be resilient and solution-focused, a forward-thinking team of industry specialists with deep roots in transportation financing.
Experience and reputation
There are many invoice factoring companies, all looking to attract your trucking company as a new client. They all promise fast cash to keep your trucks moving, but how do you weed out the pretenders and identify the best invoice factoring company for your trucking business? One of the best metrics for recognizing a dependable financial provider is sustainability – look for an invoice factoring company that has lasted the test of time with decades of experience. If this experience is accompanied by a solid reputation for excellent customer service, put them on your list as a serious contender to be your factoring company.
Why does experience matter?
As a person managing or operating a trucking company, you know the value of experience – company leaders have generally seen it all, done it all and are well prepared for the road ahead. The financial partner you choose to work with should be equally experienced in all financial matters related to trucking. This experience is needed to ensure seamless and uninterrupted funding to your financial needs, whether they are of the everyday variety, urgent, or even those that are unexpected.
If you have been in trucking long enough, you know something down the road will cause a cash shortfall and trigger a financial challenge or even a crisis. It could be a costly repair, an unexpected tax bill, a recalled bank loan, or a growth opportunity that stretches financial resources. Whatever the circumstance, your trucking company needs to know that the invoice factoring company you work with will step up to the plate and have your back. The few invoice factoring companies with decades of industry experience have proven their value as specialized financial partners by enduring the same market conditions that have shaped the trucking industry. These are the invoice factoring companies that have played an integral part in the evolution of freight factoring as a specialized form of accounts receivable financing: A product that is custom built to meet the rugged demands of a volatile industry.
How has freight factoring evolved?
The financial crisis of 2008/2009 and the economic slowdown that followed motivated banks to restrict lending for small and medium-sized businesses and begin a campaign of recalling loans that were considered unprofitable and risky. This pretty much ended the era of commercial bank lending to owner operators, small fleets, and freight brokers and began a new era in which invoice factoring became a mainstream financial strategy.
As commercial financing to the transportation industry faded, a specialized form of invoice factoring evolved to fill the funding gap. To better serve the industry, a select few invoice factoring companies with a history in transportation developed tailored services to meet the exact needs of truck company owners. Freight factoring emerged, providing benefits that far surpassed the banking system’s restrictive lending terms and conditions.
Of the expansive list of alternative lenders, very few have the trucking experience and resources to pioneer specialized financial products, services, and operational teams that actually make the lives of truck company owners easier. These are the companies that survive today and boast decades of dedication to the transportation industry.
Non-Recourse Factoring
Another option to consider when shopping for invoice factoring is non-recourse factoring. Unlike traditional factoring, in non-recourse factoring, the 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.
Why choose experience over rates?
It’s a trick question – you don’t have to choose one over the other. Those freight factoring companies with decades of trucking history are today’s leaders driving innovation and setting new market norms. Their infrastructure and organizational efficiencies have been refined over time to provide excellent overall value: this includes a very competitive balance between excellent rates and outstanding services.
It is essential to understand that the lowest rates do not necessarily equate to the best service in the freight financing world. Be wary of any invoice factoring company that is willing to slash rates to win your business — these are the factoring companies most likely to stall funding or fail to respond quickly and efficiently to unexpected financial difficulties. On the other hand, long-standing freight factoring companies more often have a proven record of building customer loyalty with dependable funding and additional support if and when needed.
Technology and innovation: A new driver of excellence
The primary considerations when selecting a freight factoring company have traditionally been:
- Overall customer service
- Cost of financing
- Speed and dependability of funding
- Flexibility and rapid response to an urgent need
- Trucking industry experience
These considerations have helped define a well-rounded financial partner who is aligned to meet your cash flow needs.
However, today a sixth consideration is being added to the mix; a consideration that is rapidly elevating the standards of service across our industry:
- The innovative use of technology to improve customer experiences
Of the above-listed considerations, the innovative use of technology is becoming a discriminating measure that can highlight a freight factoring company’s ability to lead the pack in the future as a valuable financial provider. With roots in the trucking industry reaching as far back as the late 1900s, eCapital is a major contributor to the development of freight factoring. Our culture of innovation continues to push boundaries and set new industry standards for seamless funding. Through the application of technology and innovation, we are now able to provide customers with uninterrupted cash flow 24/7. Our trucking clients benefit from greater financial flexibility and a leg up on their competition through superior access to real-time cash flow through this approach.
eCapital’s most recent contribution to the advancement of fast funding is the introduction of a new funding platform in partnership with Visa. This collaboration with the world’s leader in digital payments has shattered previous standards for fast funding! The eCapital platform is a paradigm shift in how working capital is delivered to trucking companies. The current industry standard is limited to funding clients using ACH (direct deposit), wire transfers, and other legacy technologies that are generally reliant on East Coast banking hours. Now, as soon as invoices are submitted and verified, your money is instantly available to control and disperse as you will within the client portal. eCapital has changed the speed of funding from fast to warp speed! No longer are trucking clients waiting for banking hours to transfer funds. Instead, clients gain direct connections to funds in real-time, can access more money with a pre-approved line of credit to bridge the gap in day-to-day business cash flow, and gain all the conveniences of a Visa Commercial Card.
eCapital’s Roots in the Trucking Industry
eCapital is deeply rooted in the trucking industry. With over two decades’ experience in transportation financing, our organization is structured on a foundation of industry knowledge. Adapting resources to respond to your company’s working capital needs, our team of industry experts are thorough, expedient, and extremely easy to get along with!
The eCapital organization has evolved through organic growth plus the acquisition of other industry innovators. The result is a highly trained team, well experienced in freight transportation, and operating in a solution-focused culture. Our mission is to empower our clients with flexible funding solutions to keep on top of their businesses. Building relationships based on integrity and trust, we deliver cash flow you can count on, every day, every month, every year we remain partners in your success. Making the complexity of financing disappear and pushing the speed of funding to new limits, eCapital is setting new standards in freight financing. In this space, trucking companies are paid at the click of a button.
When investigating financial partners, look for industry experience and use a checklist to help choose the best factoring company. For more information about freight factoring for your trucking business, visit eCapital.com
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.
eCapital Corp
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.