Checking Credit Scores with Freight Brokers

Finding the right freight broker for your business is essential to the success and growth of your company. It is important to work with a brokerage firm you can trust and communicate openly with. Not all freight brokers are the same; vet each brokerage firm you are considering thoroughly. There are a few factors that you should consider when selecting a broker for your shipments. One big indicator of a brokerage firm’s reliability is a freight broker credit check. 

What is a Freight Broker?

Freight brokers act as middlemen between shippers and carriers. The freight broker facilitates communications between the shipper and the carrier, they do not at any point take possession of the freight. Essentially, freight brokers ensure a safe and timely freight handoff between carriers and shippers. A good freight broker selects reliable carrier partners and has expertise in managing the logistics of each shipment they are responsible for.

Why are Freight Brokers Beneficial?

Shippers rely on their freight brokerages' network of carriers to transport their shipments. Shippers save a lot of time by using a reputable broker that coordinates with each carrier directly. All shipments routed through a freight brokerage are overseen by that brokerage from start to finish. 

What is a Freight Broker Credit Check?

A broker credit check is very similar to credit checks for individuals. A credit check gives an overview of financial history. For a brokerage firm, this credit check can give insight into how reliable they are in paying their clients on time. If their credit check shows a history of not paying clients on time or not paying them in full, they are considered to be a high-risk broker to work with. 

How Do Brokers Build Their Credit?

Brokerage credit is dynamic; it can increase or decrease over time. The key to building better credit is to be consistent. Taking the right steps consistently over time keeps your credit score up and the risk of doing business with you low. 

Freight Brokers Maintain Good Credit By:

• Using Electronic Invoicing & Payments

  • Electronic bookkeeping allows for quicker payments. 

• Developing Strong Working Relationships With Carriers

• Staying Organized & Paying On Time

• Resolving Shipping Discrepancies Quickly 

Why is it Important to Check Freight Brokers Credit Scores?

Freight brokers are trusted and strategic business partners for carriers. Choosing a credit-worthy broker is essential to the success of your business. A great broker can help elevate and grow your business while the wrong broker can have a negative impact on your business and your reputation. 

Pre-screening a freight broker shows how risky they may be to work with. As a carrier, it is important to find a freight broker that has a history of paying in full and on time. 

What is a Good Credit Score for a Freight Broker?

Credit scores for freight brokerage firms are also similar to an individual's credit score; it has a scale to it. Brokerage firms can be considered high-risk, medium-risk, and low-risk. The higher their credit score number, the lower risk they are to work with. 

High-Risk Freight Brokers

A freight broker with a credit score of 0 to 69 is considered high-risk to work with. There are a few circumstances that would cause a broker to have a low credit score such as: not paying customers on time, not paying customers at all or they are a new company. New companies may not have had enough time to build up their credit scores. For newer companies, using customer reviews can help determine if they would be risky to work with.  

Medium Risk Freight Brokers

A freight broker with a credit score of 70 to 86 is considered a medium risk to work with. A medium-risk brokerage firm may have a few circumstances of not paying on time or at all. They may also have undergone a management or policy change recently and are working to build their credit back up. Checking customer reviews and researching company history can give more insight. 

Low-Risk Freight Brokers

A freight broker with a credit score of 87 to 100 is considered low-risk to work with. These brokerage firms have a history of paying on time and paying in full. 

How Do You Check a Broker's Credit Score?

Carriers can use a third party to run a credit check on their desired freight brokerage firm. Engaged Financial offers a credit analysis to give you a piece of mind that your company will get paid on time for their shipments. 

Choosing a low-risk freight broker with a good credit score may be more expensive than working with a low-credit score brokerage firm. How much risk are you willing to take with your shipments and your company? Ultimately, paying a small percentage more for a reputable and reliable freight broker will save you time and money in the long run. There are many low-risk, high-credit score freight brokers that are reasonably priced.
Engaged Financial is here to help you choose the right firm; our diverse freight solutions can help you grow your business. Request a free quote today at Engaged Financial where the experts help you and your company be the best it can be.

Top 6 Ways OTR Drivers Can Improve Fuel Efficiency

Fuel expenses are hugely important in any truck driver's budget, so improving fuel efficiency is top of mind. Fuel consumption can be costly and it can slow down the delivery of a load if constant fuel stops need to be made. So how can fuel efficiency be improved? Follow these top 6 tips to improve fuel efficiency and reduce fuel consumption.

Use A Fuel Saver Card

Getting the best value for fuel is essential, especially with fluctuating fuel prices; you want to make sure you’re getting the best price that you can. Using a fuel-saver card can save an average of $0.20 per gallon.

Keep Your Truck Well Maintained

Keeping your trucks well-maintained ensures that your fleet runs at peak efficiency and performance. This will help save you money on fuel costs and help you get to your destination faster since you won’t have to make multiple stops to check anything out.

Minimize Idling Time

Minimizing idling time can improve fuel efficiency. 1 hour of idling can burn up to a gallon of gas. It can be easy not to turn off your truck while making a quick stop at a truck stop, rest stop, or gas station, but in reality, it all adds up. Use truck stop showers and other amenities to reduce the need to idle your truck.

Plan out Your Route

Planning your travel route in advance might seem like a simple thing to do, but it is so effective in not only increasing your fuel efficiency but also cutting down on travel time. Plan your route around the shortest route, gas stations to fill up, and rest stops. If you’re stopping at a gas station to fill up, then go ahead and also plan to get any necessary items, such as snacks or a bathroom break instead of having to stop somewhere else 30 minutes later.

Keep Tires Well Inflated

Well-inflated tires are fuel efficient, whereas under-inflated tires can decrease fuel economy. For every PSI drop in pressure, your fuel mileage can be reduced anywhere from 0.2%-0.4%. While this might not seem like a lot, it can quickly add up, especially for something that can easily be fixed.

Maintain Consistent Speed

Use features like cruise control to maintain a consistent speed, maintaining a consistent speed is important in avoiding things such as speeding which can greatly increase fuel consumption and can result in costly speeding tickets. Finding the “sweet spot” of your engine can increase your fuel efficiency and help decrease the wear and tear on your trucks.

While keeping your trucks well maintained, reducing idling time, and maintaining a consistent speed are all great ways to increase your fuel efficiency, fuel saver cards help ensure that you’re not only being efficient but also saving on fuel costs. Engaged Financial offers fuel saver cards with benefits that included pre-negotiated fuel discounts and an array of products that are designed around growing your business. Apply Now and get started on saving on fuel.

What is Recourse vs Non-Recourse Factoring

Freight Factoring also known as trucking factoring or transportation factoring, turns your invoices into immediate cash and eliminates the wait of getting paid after each load has been sold. Engaged Financial offers both Recourse and Non-Recourse factoring to our clients, and in this article we describe the difference between the two so that you can make the best decisions for your business.

Recourse factoring is when you are responsible for the debt if your customers don’t pay the invoice. Regardless, the factoring company will do its best to collect payment from your customer. However, if your customer does not pay, you assume the nonpayment and must repay the funds owed. A Recourse factoring invoice usually involves lower factoring fees since there is a lower risk for the factoring company. 

Non-Recourse factoring is when the factoring company becomes responsible for the nonpayment of approved clean invoices due to bankruptcy or financial inability to pay. With a non-recourse factoring agreement, the factoring company assumes a higher risk because we take responsibility for a broker, shipper, or customer filing bankruptcy or having financial issues. Because of the risk involved with non-recourse factoring for a factoring company, typically a higher factoring fee is involved. There is also typically a more rigorous application process because you’ll need to show that your customers have consistent records of on-time payments.

How to choose the right factoring for your business

There are pros and cons to both Recourse and Non-Recourse Factoring. When trying to figure out which factoring is best for your business, it’s essential to keep in mind the type of customers you work with and the risks involved. 

Is Recourse or Non-Recourse Factoring Best For Me?

If you work with some customers that may not have the strongest records of on-time payments then you might prefer Non-Recourse factoring. But if you mostly work with reliable customers then you might prefer Recourse factoring. With Non-Recourse factoring, the factoring company would assume the responsibility for a non-payment based on the reasons above while with Recourse factoring the responsibility for a non-payment will be yours. 

The biggest difference between Recourse and Non-Recourse factoring is who will be responsible for non-payment. If non-payments haven’t been an issue for your business then you might want to consider other factors as well. Typically with Recourse factoring, there are lower fees involved and higher advance rates. But you will be responsible for any non-payments if they do occur. If you want the extra security of not being responsible for the financial problems of a broker, shipper, or customer then Non-Recourse factoring is for you. However, typically there might be high factoring fees and lower advance rates.

See how Factoring Works with Engaged Financial

At Engaged Financial, we work closely with our clients to ensure that we find the best factoring type for them and their business. Whether you prefer Recourse or Non-Recourse, we offer both. Not completely sure which type of freight factoring is for you? We’ll help give you all the facts you need to make the best decision. 

How to Choose a Factoring Company

There are many components to choosing a factoring company that is right for you. It’s essential to review things such as their time in business and online reviews. But beyond that, it’s important to know if their contract length works for you and your business and if there are any hidden fees or termination agreements. Working with a freight factoring company has the potential to streamline your company’s cash flow so it’s important to work with the right one.

Choosing a Factoring Company that best fits your needs

Every factoring company is diverse in the way that it does business and in partnering up with smaller companies. Some factoring companies serve various industries while others only focus on a specific target niche. No company is one-size-fits-all. For example, at Engaged Financial, we understand the pressures for trucking companies and provide fuel cards so truckers can benefit from a necessary expense. The time that a factoring company has spent in business is also important when figuring out its industry expertise. Are they a new company or do they have years of experience? Choosing a trucking freight factoring company that has experience and expertise in your industry is detrimental to the growth of your business. So is choosing a freight factoring company that offers transparent reporting and is up to date with modern software. At Engaged Financial, we know the value of being able to have tools that include cloud-based factoring software and providing detailed reporting of fuel savings along with other critical customer management needs. We also provide customers with the business credit reporting through credit data software and provide real-time access to global databases for companies of any size, industry, and market.

Contract Length and Hidden Fees

At Engaged Financial, we believe in transparency and no hidden fees. It’s important for every business to have all of the information especially regarding pricing and contracts before choosing a factoring company. We do not believe in charging factoring fees that diminish your profits. We want to help you save, earn and grow. We provide competitive rates tailored to your business and needs. Request a free quote today for a personalized quote from one of our agents.

Customer Reviews and Satisfaction

What other people have to say about a business can be enlightening as to what your experience with a company will be like. Sources like Google Reviews and Better Business Bureau (BBB) host plenty of customer reviews about specific factoring companies. Choosing a highly-rated freight factoring company and knowing consumer reviews can save you and your business a lot of time.

See how Engaged Financial Can Help Your Trucking Business

Engaged Financial understands that each business is unique, and it’s important to find a trucking factoring company that suits your specific needs. We provide competitive rates tailored to your business and needs. Request a free quote today for a personalized quote from one of our agents. No matter which route you choose, ensure you do your research to make sure the trucking factoring company you choose will work with your short-term cash flow goals in mind.

What is Freight Factoring?

What is Freight Factoring?

If you're in the trucking business, you know that cash flow is everything. After all, you need to keep your trucks on the road to keep business moving – and that takes money. Freight Factoring, also known as transportation factoring or trucking factoring, turns your invoices into immediate cash and eliminates the wait of getting paid after each load has been sold. Freight Factoring is a great way to get paid on your freight quickly. Unlock money you’ve already earned and reinvest in your business by being able to put funds to use right away.

Is Freight Factoring right for my company?

Freight factoring can provide funding in as little as 24 hours, but it can also take longer if there are issues with the invoices. If you are considering freight factoring, be sure to speak to an expert to learn more and weigh all of these factors carefully to decide if it is right for your company. This is why many companies turn to Engaged Financial to benefit from solutions that meet cash flow needs, for low rates and easy setup. The process is designed to help streamline funds for transportation companies in as little time as possible. We’re here to help build comprehensive solutions for improving cash flow needs in the best way to help expand your business. 

How does Freight Factoring work?

Getting paid quickly is essential to business growth. Having available funds instead of waiting 30-90 days after a load gets sold can help make your business successful. A freight factoring company takes a percentage or rate out of the invoice when purchasing it from the driver/ company. 

Here's how it works: when you deliver a load, you send an invoice to the shipper. Then, you contact a freight factoring company and they advance you a percentage of the invoice amount. The remaining percentage is held in reserve in case the shipper doesn't pay the invoice. Once the shipper pays out the invoice, you'll receive the rest of the money, minus a moderate fee charged by the factoring company. This type of arrangement can provide much-needed cash flow for trucking businesses.

1. Your truck driver delivers a load like usual.

2. You submit your rate confirmation, bill of lading (BOL)/proof of delivery, and other paperwork for your hauled loads to your factoring company.

3. The factoring company verifies the delivery with the brokerage/shipper.

4. After they’ve verified, the factoring company deposits the payment in your account using your preferred funding option. Depending on the method, you can get this payment overnight or instantly.

5. Once you’ve received the payment for the load, the factoring company will be responsible for collecting the payments for the lifetime of the invoice.

6. When the customer has paid, the factoring company will collect a fee and close the invoice.

Benefits of Freight Factoring:

Factoring for trucking companies is all about cash flow. Cash flow keeps a transportation company in business. Freight Factoring is about having ready funds for fuel, payroll, repairs, and more. It’s an easy way to manage cash flow for your trucking company. We buy invoices for freight that you’ve already delivered, so it’s money that is advanced on accounts receivable. Freight factoring keeps the cash flowing so you can keep hauling.

Another benefit of using a factoring company is the support for your back office. If your trucking company is new to the industry, you may need additional help with managing the communication, billing, and collections for invoices. With factoring, the factoring company will handle these tasks, removing the burden on your trucking business. By giving the back-office work to the factoring company, your team can focus more on delivering loads. Overall, freight factoring can be a helpful tool for businesses to improve their cash flow and grow their business.

 At Engaged Financial, we offer many benefits for your Freight Factoring business needs. 

• Quick Cash Flow

  • Engaged Financial eliminates the worry and stress of waiting to get paid after delivering a load instead of waiting 30-90 days after each load has been sold. 

• Offers Flexibility

  • At Engaged Financial, we work to build comprehensive solutions that work best for you and your business needs. We work closely with companies to eliminate uncertainty and streamline cash flow. 

• Better Business Growth

  • By Streamlining cash flow, Engaged Financial can help you expand your business at a faster rate than waiting weeks to unlock funds you’ve already earned. Invest in yourself and your business growth.

Why do companies use Freight Factoring?

Many companies use Freight Factoring to help support some back-office items that they might struggle with as a small company. Other Companies enjoy the cash flow assistance that Freight Factoring provides. Whether your company is big or small, there are many factors to think about when considering a freight factoring company. You might be thinking about cost, debt, and time. While it might be stressful to think about these factors, the good news is that Engaged Financial offers easy and simple solutions for you.

Cost

One of the first questions you might be asking is about cost. How expensive is factoring? Determining what your factoring fee will be is quite simple and we offer rates as low as 1%. We also don’t check your credit and work with any size fleet. 

Debt   

Next, you might be thinking why should my company freight factor instead of taking out a loan? A bank loan process can be complicated, lengthy, and include monthly interest fees. At Engaged Financial, we take pride in having a simple, easy-to-understand process to make sure you’re making the best decisions for your business. With factoring, you can get approved within 24 hours. Factoring is a smart alternative to a bank loan which can cause a lot of debt. 

Time

         Another question you might have is about how time-consuming the signup and application process will be. At Engaged Financial, our team works diligently to ensure that the process is quick and easy because we value your time. Simply fill out the contact form and we’ll contact you as soon as we can to start the application process.

Engaged Financial supports trucking companies like yours

Freight factoring can be an important tool for any business that works with freight. This service allows your businesses to improve cash flow and manage finances more effectively. While there are many benefits to using freight factoring, it is important to understand how it can work best for your company. The experts at Engaged Financial are here to help you with this and other financial solutions to help you build your business effectively.