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.
Your truck driver delivers a load like usual.
You submit your rate confirmation, bill of lading (BOL)/proof of delivery, and other paperwork for your hauled loads to your factoring company.
The factoring company verifies the delivery with the brokerage/shipper.
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.
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.
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.