The streets of New York City aren’t the only thing that’s tight for trucking businesses – even more so their cash flow due to delayed payments. This isn’t surprising as the freight industry is notorious for long payment cycles that can stretch for 30, 60, or even 90 days. Unfortunately, many owner-operators and fleet managers don’t have enough financial buffer to wait this long. The upside is that factoring companies in New York City can offer truckers like you a more convenient alternative.
In this post, I’ll discuss how factoring companies work and why trucking businesses like yours should consider partnering with one. Keep reading to see how this service provider can help boost your fleet!
How do factoring companies in New York work?
New York factoring companies like Factoring Express help trucking businesses receive the profits tied to their pending invoices. If you’re a trucker, you can sell your freight invoices to us, and we will advance up to 97% of the total invoice amount in as little as 24 to 48 hours.
This way, you can get your working capital fast instead of chasing after shippers or brokers who take forever to pay. The best part here is that we will also take over the collections process, so you can focus on delivering more loads instead of doing follow-ups.
Once we’ve collected your invoice, we will send you the remaining balance minus our small factoring fee – it’s a win-win situation for us, as the factor, and you, as the trucker who needs a steady and predictable cash flow.
But take note! Factoring isn’t a kind of loan. It’s a type of financial solution where we give you a cash advance in exchange for a small fee, which means there are no interest rates or long approval processes involved.
And since factoring isn’t a loan, we don’t check your credit score. Instead, we check the credit score of whoever’s named on your invoice to ensure that they have a good payment history. So, if your trucking business is new or you’re still recovering from a bad debt, our factoring company in New York might be the partner you’re looking for.
Why partner with a New York factoring company
There are many benefits you’ll enjoy from partnering with New York City factoring companies. In fact, your competitors are already enjoying the following perks:
1. Get your working capital fast
Instead of putting your working capital at the mercy of your broker or shipper’s willingness to pay quickly, you can take more control with factoring. By selling us your accounts receivable, you’ll get your funds within a day or two, which means you’ll have enough cash to cover fuel expenses, maintenance costs, driver salaries, and other operational expenses. The best part is you no longer have to open another loan just to have enough funds to keep your wheels turning.
If this sounds good for your trucking company, feel free to reach out to us at Factoring Express. Our New York factoring company will give you a 1-week free trial, so you can test and see if our service is the perfect fit for your fleet.
2. Keep your credit lines intact
As we’ve mentioned earlier, factoring gives you enough funds, so you don’t have to rely on another loan. And since factoring itself isn’t a loan, you no longer have to worry about paying inflated interest rates, which means that you can keep all your credit lines intact for bigger business opportunities in the future. Aside from that, you can keep your borrowing capacity at an ideal range once you’re ready to expand your trucking business by buying new trucks, hiring new drivers, and so on.
For example, instead of using your business loans for operational expenses, you can allocate it to buy a new truck or open new routes.
3. Make your cash flow more predictable
Since a factoring trucking company in New York will give you instant access to cash, you can easily predict your business finances. In turn, you can also make better growth plans for your company instead of waiting for shippers to pay before you can make a move.
Overall, factoring services can help reduce the uncertainty from customer payments, which makes day-to-day operations much easier to manage. At the same time, you’ll have an easier time performing financial forecasting since you can receive the amount tied to your invoices within a predictable timeframe.
4. Have more time to deliver loads
Since New York factoring companies will take over the collections, you no longer have to chase your customers for payments, which means you can focus on finding and delivering more loads while we collect your invoice.
This is a big help for owner-operators who often have to take time off the road just to go through collections. And as we know, the more time you’re off the road, the more revenue you’re bound to lose.
Aside from that, you won’t be pressured to deliver fast just to get more cash quickly. Instead, you can deliver on time while also ensuring road safety.
5. Get free customer credit checks
Factoring companies New York has to offer, like Factoring Express, provide free credit checks for your brokers or shippers. This way, you’ll know their payment history and if their invoices are viable for factoring.
Aside from that, this will give you an idea of who among your current customers is good for your business, which helps you make decisions about finding new customers or who you should retain on your load board.
6. Eliminate the stress of collections
As we’ve mentioned earlier, New York truckers spend a lot of time following up with their customers just to get payments but this wouldn’t be the case if you partner with a factoring company like ours.
The moment you sell your invoice to us, you also pass on the responsibility of collecting the amount. This eliminates a huge burden on your shoulders, which translates to more time and energy to get more loads.
Tips to make the most out of New York City factoring companies
Partnering is a wise move for your trucking business, especially if you’re struggling with delayed payments. You can also maximize its benefits if you keep the following tips in mind:
1. Know the factor’s specialization
First, you should partner with a factoring company that specializes in funding freight and transportation businesses. This way, you’ll have a partner who knows the needs of your fleet and understands the regulatory aspect of your industry.
For example, here at Factoring Express, we’ve been funding freight invoices since 2017. Before that, we owned a trucking business where we learned the ins and outs of the industry. With us, you’re partnering not only with a financial solution, but also a former trucker who knows how late payments can stall a business’ growth.
2. Know what recourse vs. non-recourse is
Next, you have to know whether you’re signing up for recourse or non-recourse factoring. Both these terms could work for your business, but they come with different terms.
With recourse factoring, you’ll enjoy lower fees, but you’ll have to pay back the advanced amount in case your client fails to pay the invoice. The good thing is that the risk is very low since we will be conducting a thorough credit check.
On the other hand, non-recourse factoring frees you from most of the liabilities if ever the shipper doesn’t pay the invoice. In most cases, you won’t have to pay back the entire amount we advanced. However, the catch here is you’ll have to pay higher fees, and not all invoices can be factored under these terms.
3. Understand the pricing model
Factoring companies either charge through a percentage rate or a flat fee. Make sure you review both options to see which one suits your trucking business best.
Most of the time, a percentage rate is much lower, but it grows bigger the longer your invoice remains unpaid. On the other hand, a flat fee can be a good thing, but it can be more expensive, especially if your shipper pays immediately.
4. Check the termination clause
Lastly, always check the termination clause of your contract with the factoring company before signing the fine print. You should be aware of whether they charge any fees and how long they will lock you in on the agreement.
Overall, be careful of factoring agreements that are longer than 6 months. If you’re still testing the waters, it’s best to opt for short-term agreements that you can renew as you like.
Why partner with Factoring Express?
If you’re ready to improve your fleet’s cash flow, you can contact Factoring Express today! We can turn your invoice into cash in as fast as 24 hours with a simple application process.
Above all, we don’t have long-term contracts or monthly minimums – you can factor in any invoice or cancel the service anytime. With us, you have full control over your choice of funding, so you can grow your trucking business without relying solely on delayed payments.
Ready to get started? Contact our factoring for a trucking company in New York today to claim your 1-week free trial!
