If your trucking business has ever dealt with late invoice payments, you know the struggle. When a long-haul carrier accepts a load, they will invoice a freight broker to move a shipment of goods. Often, it can take several weeks or months for the freight broker to pay the invoice. Late invoice payments create anxiety surrounding cash flow and occupy your time that could be better spent running your business.
That’s where freight factoring comes in to save the day. But what is freight factoring, and how can it help your business? Whether you’re intimately familiar with this process or have never heard of it before, keep reading to find out five things every freight broker should know about freight factoring.
Freight factoring saves you time and energy so you can earn more.
If you’re not sure how factoring works, don’t worry. We are happy to explain it for you. Freight factoring companies send companies an advance worth around 85% of the unpaid client invoice. The freight company then does its best to reach out to the customer to get the invoice paid ASAP.
Once the client pays the invoice, the freight factoring company will return the rest of the unpaid invoice and take a small cut. As you can see, you won’t need to be involved in this part of the process, so it will allow you to focus on the things that matter most—finding new clients and increasing cash flow!
The quality of factoring services has improved over the years.
Over the years, the quality of factoring services has dramatically improved. Many factoring companies offer credit services, fuel-purchase programs, equipment, insurance financing, mobile applications, and more. Just to add a few more reasons why you should sign up with a factor, besides making it easier for your business to get paid promptly.
There is a difference between recourse and non-recourse factoring.
Non-recourse coverage is when the factoring company assumes the risk of an invoice not being paid. Recourse is the opposite. If a broker does not pay the invoice, the trucking operator has to repay the factoring company.
The Notice of Assignment (NOA) is critical.
A Notice of Assignment (NOA) informs your customers that future payments should be paid to the factoring company.
Finding the best freight factoring company doesn’t have to be a challenge.
The idea behind freight factoring is to make your life easier and your business run more smoothly, right? So, why should finding the best trucking factoring company for your business be any different?
That’s where Top 5 Factoring comes in.
Let us help you find the best factoring company for your freight business!
If you want to give your trucking company a boost, get started with freight factoring today! Head over to our ratings so you can see the best freight factoring companies for trucking businesses you should consider signing a contract with. If you have further questions about freight factoring rates or the best factoring company for you, contact us today, and we’ll assist you!