Advantages Of Freight Factoring Over Open Invoices

calculator-178127_640You must have realized that although it is quite easy to start your own trucking business, it is quite difficult to keep it running. You might have credit clients that pay their dues between 30 to 60 days, while on the other hand there might be fuel bills, drivers’ wages and other expenses that might need to be met on a daily basis. A long lasting solution would be to get a regular flow of cash, even while you extend credit to your clients.

The invoices method of raising money would be to approach a bank, to procure an open invoices. However, if you are a start-up trucking company, the bank might foresee a higher risk and might ask you for a larger collateral against the loan. You might also need to furnish the account statements of your company for the previous three years, which anyway would not be possible. The loan amount would also be a fixed amount that would need to be paid back within a set time, by way of fixed monthly installments. Hence, a bank loan could be accompanied with rigid conditions that would have to be met during and after the loan has been sanctioned. In case you do require an additional amount, then that too would be quite difficult since you might have to wait until the first loan had been cleared.

On the other hand, freight factoring involves companies that just ‘buy’ your credit invoices from you and, in turn, pay you the invoice amount within one to two days. These freight factoring companies retain a ‘factoring fee’, ranging from 1.5% to 5% as their service fee. This fee will depend on the credit rating of your client as perceived by your factoring company, the number of credit days that you have extended to your customer and the total volume of business that you can furnish to your factoring company. Essentially, this implies that you get your money immediately, even though you may have issued a credit invoice to your client. This will enable you to pay your fuel bills, your drivers’ wages and meet other expenses immediately rather than waiting for your payments to arrive.

These factoring companies can also take over the collection activities of your business. They can thus collect the payment from your client on the due date. This will free your mind from the tensions related to collections, and you will be able to focus your energy on increasing your sales rather than chasing outstanding payments. The advantage of freight factoring is thus multi-fold. You will not need to provide any collateral.

The amount that you receive will be directly proportional to your invoice value. There will not be any repayment schedule since the amount will be wired to your account after the factoring fees have been deducted. This method of finance will thus increase along with your business. You can also factor all or part of your invoices with the factoring company. You cannot only handle all your expenses immediately but can also take in new hauls, which otherwise would not have been possible due to lack of ready funds.

Freight Factoring And Its Benefits

maxresdefaultUsing freight factoring services is a method for you to acquire the cash that you want for your trucking business to continue working. The excellent part of using this kind of system is that by using a dedicated freight factoring company you obtain the cash you require, without having to wait for the bills to be paid.

There is very a small waiting time involved, and you do not have to be anxious regarding having ideal credit the way you would if you were dealing with a bank. Previously to employing a company like this, there are some things that you require to be familiar with and certain things you require to do, to find the corporation that is good for you and your needs.

Ways to Find Out the Best Freight Factoring Services

First, you have to search on your favorite search engine, like on Google, for freight factoring companies that offer this kind of service for your type of business. You desire to look for freight factoring companies, invoice-factoring companies, and other combination of words that are appropriate. Select the keywords that you think it will assist you in finding the service you are looking for.



Next, you will desire to select more than just a few sites to review. Select just those sites that present contact information – like email and a phone number. You will also desire to see if the site has a frequently asked questions sections – this will answer some of your queries easily, without having to ask someone about them.

While you are analyzing, note any issues concerning that company that are significant to you. This will assist you to remove a large part of the companies until you find the one that you camionfiche__087182500_1216_07082014desire to work with.

Factors to Choose Freight Factoring Companies

Here are some aspects that you will have to pay attention to when choosing among more options for this type of service: how quick will they take the delivery of your currency and in what format – i.e. from check, direct deposit, or by some other means; what extra services does that corporation present; how much is the service expense; what type of businesses does the corporation serve; which statements will the corporation factor if you want to be able to select; how will bank loans and lines of credit influence funding your invoices and even what type of client service does the corporation offer and how they will treat your clientele.

All these are important and you need to know about them right from the start.

Other Factors to Find Best Freight Factoring Companies

You also desire to consider whether or not the freight factoring company requires a long-term contract. If you can keep away from a long-term contract, then it would be better to choose this type of service. This way, if you change your mind for any cause, or you simply desire to stop doing business with that company, you have the alternative of going to someone else.

Again, as you evaluate the info on these websites, note down any further questions you may have. Once you have finished your investigation, you can contact every one of these companies and have them answer your questions.

This will offer you a taste of what their client service is like. You need to make certain that your clientele is well served, and this will permit you to test the system.

Now it is time to begin weeding out the companies. Look at those issues that are most significant to you, as you want to select the company that most suits your requirements. There is no one-size-fits-all resolution here, so keep away from any companies that may deal you that way.

19aec3cWhen you have chosen the company you desire, then it is time to contact them and have them set up your account. You have an alternative here – if the company has a website set up properly, you may visit the site and begin there, or, if they do not have a website, you can contact them directly. You’ll be able to ask them for their services and query them what info they need to start your account.

Take complete info from their executive and start your account to avail best freight factoring services – this can help your business more than you can realize, as having the right flow of cash is always important in this type of business.