Freight Bill Factoring for Trucking

Whether you are a new start up trucking company or you have been in business for 50 years, most logistics companies use Freight Bill Factoring to help with the cash flow needs to cover their day-to-day expenses such as fuel, toll, insurance, maintenance, payroll and the like. If you are considering this for your trucking company you have likely spoken with others about the benefits and drawbacks to using this type of service.

money-finance-bills-bank-notesWhile speaking with others about the idea is good I would like to add some objective points for you to also consider before signing up with a company for your Freight Bill Factoring Service.

1. Be sure the funder is available to you. The last thing you want is to have a company that you cannot reach when you needed to speak with them. It is your money and your income that is being leveraged or in other words, the “life blood of your company” is at stake – be certain they are available to you when you need them.

2. Will the funder be funding you on a schedule that is acceptable to you? Some funders will fund you same or next day on the invoice that has been submitted for Freight Bill Factoring. Some will wait a week to do it or require a minimum value to process them in batches. Again, this is the “life blood of your company”, will they be doing you a service, or disservice?

3. Does the funder have a drop-box on your routes that you can submit your invoices or can you email or fax them in? Some companies require original invoices and if they do not have drop-boxes on your routes, it can delay the submission of your invoices until you can get somewhere to send them in. If they do not need originals then you can fax or email them in on the road which may be a better solution for you.

4. Does the funder have a good grasp on the trucking business? There are many finance companies that can advance on invoices but if they do not have a dedicated team specifically for trucking, how likely are they to understand the nuances of your business?

5. Does the funder have the capacity to fund your logistics company without interruptions? You need to be sure the company you deal with has the financial capacity so that when your invoices are sent into them, they will be able to do the needful and fund you as they say they will. The last thing you will want is for them to have to wait to receive payments from other invoices in order to send out your advances on your invoices

6. Can the factoring company service all or at least most of your customers? Some funders will not fund international invoices and if you ship internationally, this can be a real problem. They may want to carve out those international customers you have and not advance on them. Can you afford this or not? This is a question you need answer.

Freight Bill Factoring can certainly help your business and at the same time, partnering with a finance company that cannot meet your needs and expectations can severely hurt you. Ask questions and verify the answers before you sign up and do not be afraid to ask around.

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Non Recourse Truck Factoring Explained

document-428338_640One of the major challenges that novice business owners will have to come to terms with is that sometimes it is necessary to sacrifice something in the short term, in order to achieve a long term result. Unfortunately, this is one salient aspect of business that many novices do not quite manage to get to grips with, and so the end result is that they miss the big picture therefore meaning that they limit potential growth of their business with a few narrow-minded decisions.

A shining example of this can be noted in regards to the non recourse truck factoring service providers. On a superficial level, a non-recourse factoring service is extremely attractive to the business owner, by virtue of the fact that the business owner need not concern themselves with the risk or possibility that bad debt will have to be paid by them. This is indeed true; however, there is more to the issue than meets the eye.
Although the business owner may feel that they have managed to acquire the better end of the deal, the simple truth of the matter is that the factoring agency that is providing the non-recourse factoring will recoup their losses in other ways. The factoring agency may impose more stringent conditions concerning the repayment of money, as well as the consequences for default on the part of the company that hires them.
The factoring company may increase its prices, and or levy interest rates for accounts that remain unpaid by the company that hires them for the collection process. The lower price schedule charged by the company maybe used to dupe foolish business owners who are more concerned about cutting corners than costs.
Therefore, while non-recourse invoice factoring may seem like the best type of factoring available, a careful review of all the available options to the business owner is in order. After all, given the fact that the factoring agency will already investigate and audit the customers to ascertain their creditworthiness more readily, this means that the risks of bad debt actually arising are minimal.
Furthermore, certain types of business will reserve the right to actually deduct the cost of bad debts from their net profits, i.e. the profits of the company that would otherwise be liable for taxation purposes. With that in mind then, the fact that a factoring agency only provides recourse factoring may not be such an unappealing status quo at all.
It should also be noted that as competitive and commonplace as factoring agencies are, the simple truth is that if a hiring company is looking to rely solely upon an agency that exclusively provides factoring which is non-recourse based, then the business owner has quite a search ahead of them. The reason for this is that the vast majority of factoring agencies only provide recourse based factoring services.
Ultimately, the final judgement call can only ever be competently made by the business owner, who will need to weigh up all the options in front of them.

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Freight Factoring Services A Right Choice For Any Business

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55b95d72e126aMany businesses in the trucking and delivery sector realize that their cash flow is interrupted, as they wait for their accounts receivable to be paid by their clients. Because of this, a lot of trucking and shipping businesses trust on the help of a freight factoring specialized company, and even embrace it constantly.

Freight factors fundamentally pay money for a company’s accounts receivable- providing them the cash they require up front- and then gather the bills from the client at a later date. In exchange for this service, the factoring corporation keeps a small percentage of the bill, which costs indeed low than the loss that it could take place if the bills wouldn’t be paid.


Does a Business require Freight Factoring services?

You should think about a number of features of your business during your choice whether or not to use the help of a freight factoring corporation, including some of the following – the cash flow, the quantity of cash owed to you in bills, the payment terms – 30, 40, or 60 days of every bill, how dependable and credit worthy your clientele is and so on.


Getting Started with Freight Factoring Services

Once you have made the choice to employ a freight factoring company, you need to make certain that you can get started rapidly and simply. You need to make sure that your services are correctly documented by invoices, and make sure that your products have been carried and accepted by the client and all of your services have been completed.addriver

After confirming your accounts, the freight factor is capable to buy the receivables and you are on your
way to a more resourceful business model.


How to Start With a Freight Factoring Company

If you want to use services of a freight factoring company, first of all you have to choose the best company. Once you’ve decided on the company whose services you want to use, then try to contact them. Make certain that you are familiar with their services ahead of time and what info the corporation will inquire from you, and then have this info ready. This way your account set up will go more easily and save you some time.

The account processing should only take a few days. If you have not heard back from the corporation you are planning to use, then call them and find out why. If they make a decision not to hold your business, then move on to the next corporation on your list.

The reason here is to even out your cash flow and have your cash coming in when you require it. Do not waste time waiting on a corporation that is not serving you. Freight factoring will save you a lot of time and cash in your business, and it will also permit you to have your cash flowing in when you require it. This will decrease your pressure and stress and permit you to focus on what is actually significant: serving your clientele.


The Need

96203875Don’t misunderstand that this is not a necessary service – it has proven to be useful for plenty of businesses who are in the trucking delivery sector. As some of the clients seem to forget to pay the bills for the services that they have received, this proves to be very useful when you need your cash flow.

This type of business needs money all the time, as you need to pay for gas, vehicle insurance, drivers and other things that are necessary for insuring a perfectly-working activity. It’s worthy to pay a small amount of money, as the loss could be bigger and you could be waiting for a longer time while the bills are being processed by your clients.

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