Freight factoring is something every trucking company should take advantage of. It’s an excellent way to maintain proper cash flow, save on things like gas and maintenance, streamline your accounts receivables, and allow you to focus on the things that matter.
If you’re a new trucking company or are finally considering freight factoring as an extended service of your company, you may be wondering what the factoring application process is like and how you can best prepare yourself for it. Don’t worry; we have some answers that should make the process painless and easy for you.
What Your Factor Wants
First off, it’s essential to know what the factoring company will be looking for out of you. They will almost always be after the two same things — your company’s aging report and information about your clients — but certain factors may require more.
The aging report will give the factor a glimpse at your accounts receivables, the amount of the outstanding invoices, and how long the client typically takes to pay. Giving the factor your client’s information allows them to view more information on the company’s reliability and trustworthiness.
If you want to be prepared for the factoring application process entirely, we have three major tips for you. Those consist of having your financial data ready, always meet with a professional beforehand, and don’t shy away from asking questions if you get confused.
Let’s take a closer look at each of these tips and how they can help you with a smooth factoring application process.
Have Your Financial Data Ready
You’re probably asking, “What financial data should I have ready?” To be honest, it’s always best to have all your data ready.
Be ready to not only answer what type of freight deliveries you handle, but also how many clients you have, monthly revenue, amount of outstanding invoices, and whether you have any liens or judgments against your business.
As we mentioned above, information on your clients and having your aging report handy will also be required by most factors.
Meet With a Professional
Many business owners will try to rush the process of finding a freight factoring company that works for them. We understand owner-operators are busy people, but this is a process you’ll have to take your time with.
Before you make any decisions, it’s always best to meet with a professional. Many factoring companies will try to do everything online, but this shouldn’t take away from having the opportunity to speak with someone directly.
Ask Questions If Confused
When you get your opportunity to speak with a professional, don’t hesitate to ask questions when something doesn’t make sense or if you need further clarification on something. They might try to use big fancy words and move quickly, but you have to remember that you’re in control.
The freight factoring application process might seem complex, but the right factor will make it easy for you. If you need help finding the factor that will best serve you, we can help! Visit our website to learn more about the freight factoring companies we recommend!
References
Reuter, Sarah. “Apply Now.” OTR Capital, OTR Capital, 23 Aug. 2019, otrcapital.com/online-application/.
“Complete Guide to Choosing a Factoring Company.” Complete Guide to Choosing a Factoring Company | RTS Financial, www.rtsinc.com/articles/complete-guide-choosing-factoring-company.