What is Freight Factoring?
Questions about freight factoring? Wondering if it’s right for you? Check out our FAQ section below. Better yet, give us a call and talk to one of our factoring experts. We’re always ready to answer your questions.
Frequently Asked Questions About Factoring for Truckers
What is freight factoring?
Factoring is a popular financing tool for owner-operators and trucking companies. Trucking companies sell freight invoices at a discount to factoring companies for immediate cash. The freight factoring company collects payments from the customers of the trucking company. This frees owners from worrying about bad credit and helps trucking companies grow.
What is recourse and non-recourse freight factoring?
Recourse factoring provides the highest available advances and a low starting rate. Under a recourse arrangement, the rate grows the longer the invoice is unpaid and trucking companies are responsible for repaying the factor if customers do not. With non-recourse factoring, the factors take on the credit risk but charge a slightly higher fee. Even if customers do not pay invoices, the factor will take the loss under a non-recourse freight factoring arrangement.
Are start-ups eligible for freight invoice factoring?
There is no required amount of time a business has to be open to receive factoring. Factoring provides funding for owner-operators who are just starting up! Even if your trucking business just opened, freight factoring companies will provide the funding you need.
Does freight factoring require a sign-up fee?
Nope! No start-up fees are required to start factoring freight bills.
Does my credit score affect my ability to factor?
No, freight factoring companies collect payment from your customers, so truckers with poor credit are eligible for freight factoring.
How long does the factoring application process take?
Applications for freight invoice factoring are typically processed within 24 hours unless a faster turnaround is requested. Trucking companies who qualify for freight factoring get the cash they need the same day they apply.
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.
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 at 1-855-322-8671 to get started immediately. Simply answer a few questions to develop a factoring program that is tailored to fit your company’s needs. A trucking company has to send a copy of the rate sheet and proof of delivery to get their invoices funded.