Freight Factoring Tips

Running a trucking or transportation business places a high level of importance of getting "cash in hand" as quickly as possible. You need funds before services are rendered for gas, salaries, maintenance and more. Freight invoices with a waiting period of 30 to 90 days often won't cut it. So, many trucking companies tide over cash flow issues and slow-paying customers by making use of freight factoring.

What Is Freight Factoring?

Freight factoring is a way to speed up cash flow. A freight factoring company, called a factor, handles freight bills and sends you an advance until the full payment comes in from the customer. These advances usually run from 90 to 95 percent of the bill total, and in return you pay a fee to the factor for their services.

Why Is Freight Factoring Beneficial?

Freight factoring is a flexible financing option that gives you quick access to funds. Since it's based on your invoices, it doesn't have the limitations of bank loans, nor does it send you into debt like loans. When you receive money quicker, you can not only continue business operations, but you can also expand the business. Not to mention, having a factor deal with customers eliminates the need for you to do so on a regular basis.

What Do I Need to Know?

Like any business endeavor, you should do your homework when it comes time to choose a freight factoring company. A company's reputation is extremely important, since they will be dealing directly with your customers. You certainly don't want to choose a company that has a poor track record of customer service, as that will reflect badly on your company. A bit of research, as well as talking to peers and mentors within the industry, can help you choose a reputable factor.

Don't forget about protecting your company as well. Call Integrity Network Insurance Group, LLC at (512) 989-6006 for more information on the trucking insurance policies we offer.

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THURSDAY, JULY 14 2016 4:19 PM