Owning a trucking company will entail you to consider a few things. One of the important matters you will need to think about would be the flow of cash and payment upon performing your delivery services. Whether you are helping move families’ furniture or delivering goods for companies, you will be paid a certain amount and usually upon delivery. The problem is, you may need to maintain your truck and drivers while on the road, which will cost money. While you can take a dip into your capital investment, another good solution to obtain your funds for truck maintenance would be through freight bill factoring. But what exactly is freight invoice factoring, and how can it help benefit you and your trucking company? In this article, we show you all you need to know about factoring for trucking companies and how it can help sustain your business.
Who Needs Factoring For Trucking Companies?
The cash flow of your business is important, especially for trucking companies. This is because you aren’t only financing your employees, but you will also need extra funds in order to care for your equipment and the load it is carrying. It doesn’t matter if you are an independent driver or work for a company. Money is very important before, during, and after the whole delivery process. However, you may be dealing with customers who pay slowly. This does NOT help your business at all!
While you will be able to look for bank loans or work with credit cards in order to stay afloat until your customers pay, it may not be the most feasible solution. Not only do they have long processes, but they can also end up having high interest rates that would make you lose money in the long run. Fortunately, there is a solution. This is where factoring comes along.
What is Freight Invoice Factoring?
Freight factoring will be able to help get you the quick cash you need for your trucking company. Factoring itself means that you will be selling your invoices or accounts receivable to trusted companies to get the money you need to continue financing your company. The invoices are sold at a discount, with rates depending on the company you are working it.
How It Works
Truck Factoring has a certain process, but is known to be quick and easy. Here is how the whole transaction with freight factoring goes:
– Once you have received an order from your client, you’ll be sending in details about your customer, the transaction and load, as well as how much the rate your client will be charged.
– The factoring company will notify you to see if your customer is approved for freight factoring (meaning, if he has good credit and will be sure to pay within a given time).
– You will continue the transaction and do your part of the service.
– Once you are done and completed the trucking service, you will provide the invoices regarding the load to the factoring company.
– Depending on the invoice factoring company you worked with, you will get a certain amount of what you sold your invoice for. At Carter Funding, you could get up to 90%.
– When the customer has fully paid the invoice, you will receive the remaining balance.
It’s that simple! Just make sure that you find a reputable factoring company to work with, and the process will go smoothly.
Benefits of Factoring
Factoring may seem like a bit of a hassle. It actually isn’t and holds a lot of benefits.
– It will be able to have you get the money you need immediately after finishing a load. This helps for those who are paid slowly.
– You will not need to borrow money or use credit cards, which may end up ruining your credit score if left unpaid. You will be earning the money you make, so there’s no need to worry about any debt coming your way.
– Carter Funding offer factoring for trucking at rates as starting at 1%.
– You will be able to get the capital and cash to sustain your business. This avoids you from postponing payrolls and making sure your truck is in good, running condition. You prevent the chance of late payments and pay off any obligations.
But with these benefits being said, it isn’t for everyone. This all depends on how much you will need the cash to help sustain your business. While it’s still recommended to wait for your clients to pay you straight and avoid the process of being approved for factoring, this is best for those who cannot wait for payment from “slow” clients.
Logistics factoring is a very important service that would definitely benefit many truckers, especially those who need the money immediately after performing their services. Business is business, after all. It’s the reason why many businessmen opt to get paid before the service. But of course, that may not always be the case for truckers, especially those who haven’t created a name for themselves yet. It isn’t rocket science and easy to understand. As long as you work with a good company and are knowledgeable with the basics, then you’ll have a smooth transaction and the money you need.
If you would like to find the best truck factoring company, then all you need to do is contact Carter Funding. So what are you waiting for? Do you need the right factoring services to keep the steady flow of your trucking company? Then find the quality and legitimate one you need today.