Freight Factoring FAQ

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If you’re considering freight factoring for your business, we’ve got the ultimate Q&A to help you make an informed decision.

Read on as we answer all your frequently asked questions about factoring.

What will EZ Freight Factoring do for my trucking business?

Consider EZ Freight Factoring a matchmaker. We will pair your trucking business with a factoring company that best fits your wants and needs. Instead of your business spending hours trying to find the lowest rates or the fastest turnaround, you can sit back and focus on your business while we do the work for you.

Are startups eligible for freight invoice factoring?

Yes, start-ups are eligible for freight invoice factoring. Factoring even provides funding for owner-operators who are just starting up!

Does freight factoring require a sign-up fee?

No, freight factoring does not require you to pay a sign-up fee.

Does my credit score affect my ability to factor?

No, your credit doesn’t affect your ability to factor. Freight factoring companies collect payment from your customers, so even those with poor credit can freight factor.

Do I have to factor all of my freight bills?

No. You choose which loads to factor. Freight bill factoring provides trucking companies with flexibility and does not have any minimum volume requirements.

Will I be locked into a long-term factoring contract?

No, you will not be locked into a long-term factoring contract. If you want to stop factoring, you will just have to give the factoring company a 30-day notice.

How is the money sent to me?

Money is typically sent directly into your account electronically by bank wire or ACH. Direct deposit and wire transfer provide immediate cash. Clients can also have funds sent directly to fuel card accounts.

How can I start?

Fill out our quick online application or call us to get started immediately. Simply answer a few questions and we’ll match you with a freight factoring company that fits your business’ wants and needs.

What are the benefits of switching freight factoring companies?

Switching freight factoring companies can bring several benefits that can greatly impact your business. One major advantage is the potential for lower costs. By migrating to a new factoring company, you may be able to secure better rates and fees, allowing you to keep more of your hard-earned revenue. This can significantly improve your bottom line and provide you with more financial flexibility.

What should I check in my current factoring contract before switching companies?

When evaluating the prospect of switching factoring companies, it is important to thoroughly review your current factoring contract. By doing so, you will gain insight into crucial factors that should be considered before making a switch. Here are several key elements you should evaluate in your current contract:

1. Termination Notice: Understand the notice requirement for terminating the contract with your current factoring company. Take note of how much advance notice they require and the specific method through which this notice should be given.

2. Documentation: Check if there are any specific documents or paperwork that need to be provided when terminating the contract. This may include written notification or the submission of certain forms or records.

3. Terms and Conditions: Examine the terms and conditions of your existing factoring contract. Pay close attention to the length of the contract term, as well as any provisions related to early termination or switching companies. Familiarize yourself with any potential penalties or fees associated with canceling the contract before the agreed-upon term is complete.

Why do I need non-recourse factoring if my customer is credit approved?

Non-recourse factoring plays a crucial role in safeguarding your trucking company, even if your customer has a credit approval. While your customer may be deemed creditworthy at a given time, credit scores and the financial stability of businesses can fluctuate rapidly. Just as it is essential to drive with insurance to protect yourself, it is equally prudent to employ non-recourse factoring to shield your trucking company from potential losses in the event that your customer becomes insolvent. This type of factoring acts as a safety net, ensuring that you can avoid unnecessary expenses and protect your business’s financial health when faced with debtor insolvency. By utilizing non-recourse factoring, you can mitigate risks and maintain peace of mind, knowing your trucking company’s financial well-being is safeguarded, regardless of your customer’s credit status.

What will my clients think if I use freight factoring?

When it comes to the perception of your clients towards your use of freight factoring, it is important to note that their opinions may vary. However, in most cases, clients tend to have either a neutral or positive view of freight factoring, especially if it is managed effectively. Here are some key points to consider regarding how your clients might perceive freight factoring and how to maintain a positive relationship with them:

1. Familiarity and Acceptance: Freight factoring is a well-established and widely accepted practice in the logistics and transportation industry. Many clients are familiar with it and understand that it is a common financial tool used for cash flow management. They are likely to view it as a professional and established practice.

2. Indication of Financial Management: Clients may see your use of freight factoring as a sign of proactive financial management. It demonstrates that you are taking steps to ensure steady cash flow, which can be reassuring for them and suggest stability and the potential for long-term business growth.

3. Operational Efficiency: Factoring can provide you with the necessary funds to maintain or improve operational efficiency. This can lead to better service for your clients, such as on-time deliveries and consistent quality of service, which they are likely to perceive positively.

Do factoring companies offer same-day funding?

Factoring companies often provide same-day funding options for businesses. After verifying and approving the invoices, most factoring companies advance funds quite quickly. Typically, businesses can expect to receive the funds within 24 to 48 hours.

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