When it Comes to Factoring Freight, Bad Credit is OK

Many single owner-operators and other small or start-up trucking companies struggle to get funding because they have little or no business credit. Criteria for traditional bank loans include a long and stable credit history and assets that can be pledged as collateral, two things that many freight companies lack. Fortunately, freight factoring for bad credit provides cash flow solutions without the hoops and hurdles presented by conventional lenders.

There are a number of ways that freight factoring can benefit companies with bad credit:

Factoring for owner-operators

Factoring for start-up freight brokers

Approval Doesn’t Depend on your Credit Score

Freight factoring for bad credit is not a loan, so you can qualify even if your credit rating is insufficient to obtain a traditional business loan. Transportation factoring companies collect payment directly from your customers and thus base their funding decisions on your customers’ creditworthiness. Your freight factor will evaluate each of your customers and approve them for a credit line based on your billing amounts and their reliability in making payments. You can request credit increases as you build your sales and your customers build a solid payment history.

Personal Bad Credit Doesn’t Matter

During the underwriting process, freight factoring companies will focus on your business’ financial history to set up your account. As long as your trucking company is incorporated, it is a separate entity that poor personal credit does not impact. Companies that provide freight factoring for bad credit are able to work with a number of difficult financial situations within a business, but for best results your business should be free from any liens or judgments that would prevent the factor from receiving payments.

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Freight Factoring can Reform your Bad Credit

The greatest advantage of freight factoring for bad credit is that the rejuvenation of your cash flow can help you rehabilitate your credit rating! Most bad credit situations are caused by a lack of working capital, so by factoring your freight bills and applying the cash you receive to existing debt you can remove it from your balance sheet and improve your credit score. Turn your business around with freight factoring!

Non-Recourse Options Available

If slow-paying customers have compromised your financial position, you may be able to start a non-recourse freight factoring program. Non-recourse freight factors offer your company a full up-front advance of your freight bills. For a slightly higher factoring fee, your freight factor will assume all the credit risk of non-payment by your customers so you can avoid troublesome repurchases that could threaten your cash flow down the line.

Instead of drowning in your company’s poor credit history, keep moving ahead with freight factoring for bad credit. Freight factoring companies are eager to help your company get the fast cash it needs, regardless of your past credit history. Freight factoring for bad credit is a great way for any trucking company to boost their working capital to haul bigger and better loads. Cover fuel, maintenance, and driver pay with the fast funding you receive from freight factoring.

Looking for a freight factoring company for bad credit financing? Call 1-855-465-8869 or fill out our online contact form and we’ll get you started on the right path to growing your business.