Consider a situation – Your trucking company is running well. You earn good profit from the business. However, sometimes you experience a hard time when customers do not make payment on time. Does this happen quite often?

Factoring Trucking is a good financial solution for trucking companies. A trucking company doesn’t have to wait for 60 to 90 days to receive its payment, after freight delivery, if it avails factoring service from a reliable company. There are many companies in the United States who offer factoring service to trucking companies.

About factoring

Factor, a third party, is a financier who buys invoices from various companies at concessional rate and makes the payments on behalf of the customers. Later on, the factoring company collects that payment from the end users. Many businesses avail this service whenever they are in urgent needs of finance.

What are the advantages of factoring trucking

  • Companies don’t have to wait too long for their payment. Factors buy their invoices to offer them instant, trustworthy, and flexible cash flow solution.
  • Instant cash enables the trucking companies to deliver uninterrupted trucking services.
  • Factoring for trucking is available for small to medium-sized business.
  • It is the factor who assumes the risk burden to provide advance payment to clients.
  • Once cash comes in hand, a client can give extra focus on their business.

How does factor work?

A client carries freight to the destination and generates bills. It handovers the bills, order documents, etc. to a factor. The factor goes through the documents, customers’ credit history and signs an agreement with the trucking company. It makes payment as soon as the verification is complete. Meanwhile, that seller informs its customers about the factor.

Factor also forwards the photocopies of all statement accounts, receipts, remittances, etc. to the customers before payment collection.

The other side of this story

As we know that there are two faces of a coin, similarly factoring trucking has also its own limitations which are given below:

  • A risk factor is involved. But with the right factoring agency, this is eliminated to quite an extent. 
  • It may not be economical for small entities or recent start-ups.
  • However, if you have a strong and reliable clientele base, factoring can be an excellent opportunity to grow more. 
  • This facility is not for those who have a lack of professionalism and have customers with poor credit history.
  • In case the customer fails to pay the bill, the client will be responsible for it. In that case, it will have to repurchase the bills from the factor with some penalties.

Don’t wait, avail factoring service for instant cash

Getting money to support your business has become so easy. Entrepreneurs can make payment to their employees on time, even though they themselves do not receive their payment on time. Factoring Trucking is an easy way of getting finance against your invoices. A company doesn’t have to worry about payment after unloading of goods as factors are there to take all the risk and pay the bills. It is financial service which gives you cash without any interest and lengthy paper works.