Are you in need of more cash for your business? Are you thinking of getting a bank loan in order to get upfront funds? Before you drop by a bank branch and explore the idea of a traditional bank loan, consider a lesser-known way of gaining upfront cash: freight factoring (also known as invoice factoring or freight bill factoring).
Factoring is simply an easy process that quickly turns your invoices into cash, which allows you to gain the funds you need for fuel and other immediate operating expenses. While factoring may not be a well-known freight financing method to some, it has helped thousands of trucking companies grow their businesses and thrive, even during typically slow seasons.
So why consider factoring your freight bills over talking with your bank?
Factoring doesn’t create debt. Unlike a bank loan, invoice factoring does not create debt because you’re not borrowing any money. Instead, you’re basically getting an advance on money that you’re owed.
No “hidden fees” with factoring. Bank loans typically have several hidden fees that they charge. With factoring, all fees associated are disclosed up front, so you never have to worry about finding a random ancillary fee popping up in your paperwork.
Most start-ups usually qualify for factoring services. Most banks won’t touch start-up companies, which makes it difficult for them to get off the ground. Fortunately, start-ups usually qualify for factoring, which will give them the cash they need to grow their business.
Factoring provides back office support. Most factoring companies provide complete back office support, such as billing, customer credit checking, and collections at no additional charge. This allows you to focus on increasing your loaded miles and finding new customers.
Sign up is quick and easy. Most people are familiar with the lengthy and time-consuming process of signing up for a bank loan. With factoring, it generally takes about 2 days and minimal paperwork to set up an initial account.
Factoring companies have vital industry knowledge. Most freight factoring companies know the transportation industry and understand the challenges you face on a daily basis. Most also offer additional services that are tailored to the needs of your trucking business.
Want more information on why you should factor your freight bills and invoices rather than get a bank loan? Contact one of our friendly factoring consultants for more info.
Continue to check back on our blog for more tips and info on how you can improve your company’s cash flow!