FREIGHT FACTORING

Choosing which load factoring company to work with is a big decision for any carrier. While there are many benefits to factoring, it is important that you choose the company that is right for you to fully enjoy these benefits. In order to make the process a little easier, DAT has reached out to several experts to get their feedback on the best factoring companies for truckers.

FREIGHT FACTORING

Freight factoring, also called transportation factoring, trucking factoring, or freight bill factoring, is a process in which the person or business that delivers a load sells their invoice to a factoring company. The factoring company then pays the carrier or owner-operator the full amount of the invoice, minus a small percentage, within as little as 24 hours of receiving the invoice. This is often a better alternative than waiting a month or longer for a broker to pay the invoice. The time it takes to receive payment can depend on a variety of factors, but generally different factoring companies will have different timelines for payment.

OTR Solutions non-recourse factoring program leads the trucking industry in service, features and benefits. The company was founded in 2011 to help carriers and owner-operators maintain a positive cash flow while growing their business. OTR Solutions has experience working with small, medium, and large companies, and is focused on building strong, long-lasting relationships with customers.

OTR Solutions offers the most trustworthy flat factoring rates in the industry with no hidden fees and straightforward factoring programs. With transparent pricing, no long-term contracts or commitments, and customized factoring programs to fit your unique business needs, the company stands out as the number one choice for factoring loads.

altLINE is an extension of The Southern Bank Company and is an accounts receivable-based financing platform for commercial customers. As a bank factoring company, altLINE offers the same benefits as a regular independent factoring company while providing the advantages that come from working with a community bank.

Another standout freight factoring company is Apex. Founded in 1995, Apex is one of the most established factoring companies in operation. Apex provides users with quality customer service that keeps them in the loop about their invoices.

Porter Freight Funding was formed in 2011 with the goal of providing consistent cash flow to small and large trucking companies. In addition to factoring services, the company also offers a dispatching network with pre-approved brokers and shippers. Plus, with Porter, truck drivers can access free fuel cards with fuel advances, as well as discounts at chains across the country.

One of the biggest advantages of Thunder Funding compared to other factoring companies is that they will send you a full copy of their contract before you even sign an application. That means you can see exactly what you are getting into in terms of pricing before you make any kind of commitment.

The only real drawback of Thunder Funding is that its rates are on the more expensive side as compared to the competition. However, they are still a great factoring choice, especially if you are looking for shorter commitments.

RTS offers quality freight factoring in addition to a variety of other services specific for truckers, like fuel cards and software designed to help you manage your business. This software can help with managing your factoring agreement with RTS itself as well as other elements of your operation.

Strengthen carrier relationships and maximize your income with our factoring for freight brokers program. You get the financing you need to run your business while boosting your revenue potential with a built-in, managed QuickPay program. Protect your credit rating, keep your carriers paid and maintain your reputation.

Factoring for the transportation industry is a specialized service that is designed to help owner-operators like you maximize their cash flow, reduce delinquencies and grow their businesses. To learn about our factoring services for transportation companies, contact us today for a free assessment.

• Learn MoreFunding for owner-operators and fleet ownersFreight factoringSame-day funding

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• No hidden fees

• Complimentary TMS

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I'm very proud of working with Summar for the last five years. Picking up the right trips with good money is very important, but so it is to have the money available in 24 hours like you have with Summar. I recommend Summar factoring unconditionally.

Factoring is a financial service whereby a financial institution purchases invoices (i.e. accounts receivable) from a business, the seller, at a discounted rate. The person or company that purchases the invoices is called a factor. The discount amount is called the factoring fee. When you sell an invoice or account receivable to a factor, you receive cash for your invoice immediately and the factor is legally entitled to receive payment for the invoice. Factoring your receivables can give your business the cash it needs to expand and cover day-to-day operating expenses without going into debt or diluting your equity ownership in your company.

Factoring is different from traditional bank financing in many ways. First, your ability to qualify for factoring services is primarily based upon the credit worthiness of your customers, not you. While we generally choose to factor for businesses that are well managed and have a history of demonstrating integrity and honesty, our decision-making process, and that of most other factoring companies, centers around your customers and their ability to pay their bills. Second, getting setup with a factoring company is generally much quicker than applying for and getting approved for a bank loan. Most factors can have you set up in 3 days or less.

There are two types of freight factoring - recourse and non-recourse. Understanding the two types of factoring will help you make the best decision for the success and long-term growth of your trucking business.

Recourse Factoring Recourse factoring is a type of factoring where the seller bears the collection risk. Factoring companies use your receivables as their collateral, and in many cases require additional collateral. If your customers don't pay their bills, then a recourse factoring company has the right to collect the money for the unpaid invoice from you. The factoring company typically holds some of your money in reserve and deducts the payment from the reserves or deducts the payment from other receivables being purchased. You, the seller, are solely responsible for all invoices that are purchased by the factor. Any payments that are not paid in full will be demanded back.

Non-Recourse Factoring Non-recourse factoring is a type of factoring where the factor bears the credit and collection risk on purchased invoices. A non-recourse factoring company purchases invoices and suffers the loss if your customer, such as a freight broker or shipper, doesn't pay. The factor cannot demand payment on any purchased invoices if payment is not received due to credit reasons. Non-recourse factoring also generally doesn't require any additional reserves. Since non-recourse factoring companies don't charge you back when your customers don't pay their bills, there is no reason to hold reserves.

If you are looking to find a fast, but secure way to help stabilize or grow your business, then you should seriously consider talking to us about our non-recourse factoring program. Using a factor will give you access to quick cash when banks aren't willing to lend. Using a non-recourse factor won't come back to bite you if your customers go out of business. For more information about factoring, please give us a call at 855-465-4655, check out our blog, or visit one of our social media feeds.

The freight and trucking industry heavily depends on prompt invoice payments to cover operating costs. Unfortunately, companies may need to wait weeks or even months for customers to pay, creating a cycle of negative cash flow and mounting debt.

Factoring in the trucking industry (also referred to as freight factoring) is when you sell unpaid invoices to a third-party company for a cash advance. Trucking invoice factoring is most commonly used to improve cash flow, pay down debt, hire more drivers, and pay your employees on time, even when customers take a long time to pay.

The best factoring companies generally approve your application within 1 or 2 days. This means you can receive up to 95% of your invoice value almost immediately instead of waiting 30, 60, or even 90 days for customers to pay.

As an owner operator, you sometimes have to sacrifice business equity to capitalize on growth opportunities, but with invoice factoring, you do not have to give up a part of your business to access funding. Instead, factoring companies for trucking operators and fleet owners provide cash advances to help you hire more drivers, upgrade your equipment, and pay down debts, without sacrificing equity.

altLINE accepts all kinds of unpaid invoices for factoring. However, we usually favor invoices for creditworthy customers and large or medium-sized companies. Additionally, we do not factor invoices for customers who consistently make late payments.

Receiving cash advances from truck factoring companies means you do not have to wait on customer payments to fund your business. With truck factoring, you can avoid long payment cycles, unlock growth capital, and accelerate business development.

You should not have to wait for long invoice payment terms to hire more drivers and move more freight. Instead, invoice factoring for trucking enables you to turn unpaid invoices into cash, giving you the freedom and flexibility to grow your team.

Because freight factoring is not a loan, you do not have to worry about going into debt to pay expenses. Instead, you can focus on improving your credit by accessing working capital from factoring to pay down other debts and make on time payments. 041b061a72