How to shop for a factoring company – 6 must-ask questions
Is it time for new equipment? Do you need to hire more drivers? Maybe you’re experiencing slow paying customers and are wondering how to finance your business needs. With so many funding options, how do you determine the best fit for your trucking company?
Ask these 6 questions to comparison shop factoring services:
Do you offer a trial period?
Most factoring companies require a contract for a minimum of 1 year. They may entice you with a sweet introductory offer but once you’re on board, you’re locked in. Be sure you understand the terms and conditions or you’ll have to pay out termination fees.
eCapital provides a 90-day trial so you can kick the tires before making a commitment.
Do I have to factor all of my customers?
So, you have a few customers that take a long time to pay but you also have some customers that pay right on time. You should not be forced to factor all of your customers. Look for a factoring company that’s flexible and allows you to select only those customers that cause you stress.
It’s nice to know that eCapital lets you decide who you want to factor. We give you the ability to boost your cash flow when you need it.
Are there monthly minimums required for volume?
Factoring companies typically require a minimum volume of $10,000+ monthly. Shop for a factoring company that customizes a program to meet your needs.
With eCapital, there’s no minimum monthly fee so you’re not going to be hit with a fee for a month when your volume drops.
What happens when my customer takes 30 days or longer to pay an invoice?
You may receive an incredible rate quote but watch out for rates that go up over time, even if it’s only been a week.
When the fastest you can collect is 30 days, your actual rate becomes much higher than your quoted rate.
eCapital provides flat-rate programs that are predictable so you’re not surprised when invoices reach 60 or 90 days.
Are there hidden fees I need to know about?
It’s so important to know what you’re getting into when you enter a contract with a factoring company. As we mentioned, sometimes the promise of a great rate isn’t all it’s cracked up to be. Reporting fees, postage fees, credit check fees… Be informed about all potential expenses.
At eCapital, we value transparency and are upfront with you so there are no surprises.
What else can you do for our business aside from factoring?
Selecting a company to factor your invoices should be about finding a financial partner that’s invested in your success. Ask about any additional benefits and savings your potential factoring company provides clients.
At eCapital, we have your back… from extended hours to free credit checking, and discounts on fuel, ELD, load board, tires, and more.
Choose a flexible funding partner
To keep your trucks on the road and making money, you need to be able to handle the rising costs of fuel, maintain your vehicles and pay your drivers on time. Factoring is the fast, simple solution that gives you the peace of mind you need to focus on maximizing your loaded miles and increasing your profits. It’s a vital component of a successful growth strategy. Go with a factoring company that partners with you, like eCapital. You’ll get fast and flexible funding that scales with you as your business grows.