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What to Look for in a Factoring Company for Your Trucking Business

What to Look for in a Factoring Company for Your Trucking Business

Max 5 min read
Finding the right factoring company is essential when running a trucking business. Freight factoring can be a great tool in bridging payment cycle gaps, but the company you choose will make a world of difference.
For this post, we discussed a brief guide of what you need to know before hiring a factoring company. Make sure you read the points below before signing the factoring agreement to ensure that your fleet is in the right hands. Because when it comes to your business’s finances, you simply can’t take chances.

What is Factoring for Trucking, and What are its Benefits?

Factoring for trucking is a financial option that gives trucking companies the necessary cash flow they need to run smoothly by providing them with immediate funding for unpaid freight bills. Rather than trusting that clients will pay fast, factoring gives truckers their much-needed funds immediately.
This way, they will have working capital to cover operational expenses instead of taking time off the road to handle the collections process. At the same time, factoring also gives truckers the financial confidence to deliver more hauls and plan their business growth, thanks to the predictable funding.
One of the critical benefits of factoring is it suits almost all trucking businesses. It doesn’t matter if you have a low credit score or still recovering from a bad debt. You can always open an account and factor in invoices once you are approved – not to mention that you have the freedom to choose which invoices to factor in and when you want to do so.
With Factoring Express, you can enjoy these benefits and more. Aside from funding trucking invoices fast, we also offer fuel advances, fuel card program, dispatch services, and accounting services to streamline your business. With us, you get more than just instant cash to grow your business, whether you’re a single truck owner-operator or the owner of a big fleet.

Choosing the Right Factoring Company for Your Trucking Business

Choosing a factoring company is a critical choice for trucking businesses trying to improve their cash flow and overcome their financial challenges. With a variety of variables to consider, it can be challenging to find the best factor to partner with. To help you out, we’ve discussed here a few key considerations to add to your list:

1. Industry Experience

The foundation of a fruitful partnership with a factoring company lies in how they interpret the trucking business’ subtleties and complexities. Search for a company with a long track record in the trucking industry, like Factoring Express, a factoring trucking company, who has years of expertise providing flexible funding in the transportation sector.
Overall, a factor of expertise in the trucking industry will ensure that your business receives personalized service. It also means that they are skilled in the collections process and how to deal with brokers or shippers.

2. Quick and Reliable Funding

The capacity to access immediate cash flow is one of the primary benefits of factoring. While assessing factoring companies, focus on those that offer fast and dependable funding options. Ideally, funds would be deposited into your account within 24 to 48 hours once the pending invoice is verified. 
This way, you’ll have the working capital to cover primary expenses like fuel costs, driver payments, and so on. With fast funding, you no longer have to rely on traditional collections, not to mention that the factoring company will take over the collections process.

3. Flexible Terms and Contracts

Flexibility is crucial when picking a factoring partner, particularly in an industry as unique as trucking. Stay away from long-haul contracts or inflexible plans that limit your capacity to adjust to your business’s changing needs.
Instead, look for factoring firms that can tailor their contracts and terms to your company’s requirements. For example, Factoring Express doesn’t impose long-term contracts or monthly minimums, so you can factor invoices on your own terms. Also, we don’t have termination fees, and we are 100% transparent with our pricing.

4. Dedicated Customer Support

Brilliant customer service is a sign of a reputable factoring company. You should always search for companies that prioritize their customers’ concerns and have a dedicated platform where you can easily reach them.
At Factoring Express, all our clients have exclusive access to our portal, where they can check customer credit, aging reports, paperwork, and factoring reports. It’s a one-stop platform where they can also contact our customer support team for any inquiries.

5. Recourse and Non-Recourse Options

It’s important to know that there are two types of factoring: recourse and non-recourse. Make sure that you read the contract and check which one the company offers.
With recourse factoring, you are financially liable if your client fails to pay the invoice. In that case, the factoring company will ask you to pay back the factored amount. The good thing is that this risk can be minimized through client credit checks, which Factoring Express offers for free.
On the other hand, non-recourse factoring is a no-obligation setup, where you won’t be held liable even if the factor fails to collect the invoice. Instead, they will just count it as a loss. However, non-recourse factoring tends to have higher fees and equally stringent criteria.

6. Transparency and Integrity

Trust and transparency are primary standards in any business relationship, and factoring is no exception. Make sure that the factoring company you’re partnering with doesn’t charge hidden fees and has a transparent reporting system.
It will also help to check the factoring company’s reviews to have a first-hand account of their service quality. From there, you can assess their integrity as a financial partner for your business.

7. Technology and Online Access

A factoring company with a fully digital system is a convenient choice for busy truckers. Instead of dropping by their office all the time, you can send them all the paperwork online as you deliver hauls anywhere in the US.
This means you’ll save a lot of time and money, which you can funnel into improving your trucking business. Above all, you’ll find it easier to manage your documents instead of having to manually file receipts or invoices.
For example, at Factoring Express, we have a digital portal where our clients can perform all their needed requests. From sending invoices, they want to factor to credit checks and more, we offer a fully digitized factoring experience. So even if they are miles away, they will remain on top of the finances.

8. Factoring Rates and Fees

While cost shouldn’t be the sole determinant in choosing a freight factoring company, it remains a critical consideration. You should look at their pricing model and see which one suits your trucking business best. With Factoring Express, you can get rates for as low as 1.99% of your invoice after we check the client’s credit score, factored amount, and type of funding you need.
Unlike bank loans, factoring doesn’t have interests and it won’t hurt your credit lines. Instead, it will give you fast and instant funding by selling your invoice for a discounted rate. Overall, the small factoring fee is just a tiny sacrifice compared to the convenience and steady cash flow you will enjoy.

Partner with a reliable factoring company today!

A reliable factoring company can be the secret sauce to your trucking business’s success. And if you’re looking for someone you can trust in the long haul, Factoring Express is here to help.
Instead of searching endlessly for a ‘factoring company near me‘, you can contact us today to consult with one of our specialists. We work with small to medium-sized fleets anywhere in the US, ensuring that your invoices will get paid as fast as possible.
So why struggle with long payment cycles if you can turn your invoices into cash in as little as 24 hours? If this sounds good to you, contact us today at Factoring Express to start your 7-day free trial!
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