Running freight involves keeping track of a lot of logistics. You could want to take advantage of helpful services such as truck factoring to help.
Here are some answers to common questions about trucking factoring.
Factoring Basics FAQs
It’s important to start by understanding the bare fundamentals of factoring — what it is, how it works and its benefits.
What Is Freight Factoring?
Freight factoring is a way for a trucking company to get a constant cash flow without having to wait days for their invoices to be paid. A spot factoring company — known as the “factor” — buys freight bills from the trucking company at a discount and provides immediate funds for unpaid invoices. Once the invoice is paid, the factor takes a small fee.
What Are the Benefits of Factoring?
Many freight companies utilize factoring for its speedy cash benefits. Instead of waiting weeks or even months to get paid an invoice, a factor can provide immediate funds — usually within 24 hours — so the trucking company has a constant flow of cash to rely on. When a delivery is finished, the trucking company can get paid without waiting for vendors or clients to pay invoices.
This gives a company the ability to stay efficient and flush with cash. A factor can also handle invoices, taking some stress off of the company’s shoulders.
How Do I Know the Status of My Invoices?
Many factoring companies will provide you with an easy-to-access platform that lets you see all of your invoices and their current status. This lets you stay on top of invoice factoring to know where your company stands.
Do I Have To Factor All My Invoices?
You likely won’t have to factor all of your invoices, and you have full control over which clients you want to factor. However, if you decide to factor an invoice of one of your clients, it’s a good idea to factor all of their invoices for convenience and efficiency.
How Much Does Factoring Cost?
One of the main questions people have is about freight factoring costs. Trucking factoring costs differ based on the company you use. Usually, the factoring company will take a fee when an invoice is paid.
It also depends on the type of factoring you choose — recourse or non-recourse factoring. In non-recourse factoring, the factoring company handles all the risk of unpaid invoices — if a customer doesn’t pay, then they’re responsible for the debt. This type of factoring will cost more. The cheaper option is recourse factoring, which puts the responsibility on the trucking company to repay the debt if the customer doesn’t pay.
Some factoring companies may also include discounts with their services, offering factoring fuel cards, military discounts for veterans and more.
Application Process FAQs
Another common question is the application process. While some may be intimated by the process of submitting a factoring application, it’s actually a relatively simple process.
How Do I Work With a Freight Factoring Company?
The first thing you’ll want to do when working with a factoring company is research different companies and see which one has the experience, reliability and commitment to customer service.
When it comes to freight factoring, it’s important to find a company you can rely on. Once you find the company you want, you can fill out an application, and the company will likely run a credit check. Once you’re approved, you can start the factoring process.
What Do I Need to Be Approved For Factoring?
You’ll need to fill out an application for your company to work with a factor. One of the most important things you need is a good credit score — factoring companies use this to see if you’re in good credit standings and a reliable company to work with.
Where Can I Apply For Freight Factoring?
There are plenty of factoring companies out there — it’s important to find a reliable, trusted company so you can take full advantage of factoring. FactorLoads is a great choice for your factoring needs.
Customer Relationship FAQs
Many freight operators are concerned about how factoring may impact the relationship with their customers. This can be especially important for those small to mid-sized businesses that rely on customer relationships to thrive. You may be wondering if you’ll still be able to retain those relationships with your customers. Here are some common answers to those worries.
Will I Still Work With My Customers?
Your customer relationships will stay the same, and you’ll still be able to develop, retain and build new and lasting bonds with your clients. The factoring company will simply take over the invoice responsibilities and let you have more time to actually communicate and work with clients to better meet their needs.
How Will Customers Pay Their Invoices?
Invoices will be marked with payment instructions for how to pay the factoring company. In most cases, the factoring company will handle this part to ensure you have a smooth transition from direct payments to payment to a factoring company.
Why Choose FactorLoads
One of the most challenging parts of running a freight company is finding other companies you can trust to help you run your business. With the right partnership, you can keep your trucking company thriving. At FactorLoads, we strive to make our clients’ businesses grow using our experience and commitment to quality and by building a trusting relationship:
- Experience: We’ve been in business for over two decades, so we know what it takes to offer our clients what they need. We started out helping small-sized trucking companies and have since expanded to include medium-sized companies as well. We can offer the competitive advantage those smaller companies need to gain an edge over the bigger competition.
- Commitment to quality: At FactorLoads, we’re committed to doing a great job and helping out clients do great work. Every step of the way, we ensure we’re accurately tracking invoices and communicating with our clients so that everything can go smoothly.
- Trusting relationships: Our company is built on the relationships we have with our clients. Our process is transparent, with no hidden fees or heaps of contracts to sign. It’s factoring on your terms.
With experience, commitment to quality and trusting relationships with our clients, we can help your trucking business thrive. Our company is made of pioneers in the trucking industry — we’re dedicated to helping your small to mid-sized business flourish.
Get Started With FactorLaods
FactorLoads is ready to help you start gaining the advantages of freight factoring. We are your experienced, reliable option for a freight factoring service. Start factoring or learn more about the benefits today!