A damaged or malfunctioning vehicle is a challenge that is to be expected from time to time for all freight company owner-operators. However, it can still be a severe problem if it comes at a bad (financial) time.
Not only do you have to foot the repair bill, but you may also have lost out on a profitable shipment. During these tough financial times, that is an expense many freight companies cannot afford.
There is the option of using a conventional financing service to pay for the repair bills. However, since these services finance the repair by using your vehicle(s) as collateral, this is only an option if your truck(s) have enough equity on them to cover the bill.
If your vehicle has no equity left on it, you’re out of luck and must pay the bill on your own. If money is tight, you’ll have to wait until you get paid, which can be a while in this industry.
What is freight factoring?
Most freight company owner-operators know the benefits of freight factoring for assistance getting unpaid invoices paid. If you’re unfamiliar with the process, don’t worry. Essentially, freight factoring takes over the hassle of collecting your payments so that you can focus on operating your business. Oh, and you don’t have to remember to pay them, as they take a small cut of your invoice as their fee (usually no more than 3% of the receivable).
Can you use factoring services to finance truck repairs?
Most freight company owner-operators know the game-changing benefits of factoring when it comes to unpaid invoices, but what about when it comes to the equally stressful hassle of expensive truck repairs?
So, can you use factoring services to finance truck repairs? The short answer is yes! While freight factoring is intended to be a solution for slow-paying invoices, the money you are given by your freight invoice company (like OTR Capital Factoring or Apex Factoring) can be put towards anything, including repairs. (It can also come in great handy for other company expenses like fuel and employee salaries!)
Remember, the point of factoring is preventing tough financial times between payments! Many carriers use factoring regularly to avoid a cash flow shortage when it’s needed most.
Let us help you find the best factoring company for your freight business!
If you are interested in pursuing freight invoice factoring but unsure how to find the best trucking factoring company for you, look no further than Top 5 Factoring! Head over to our ratings to 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 freight factoring company for you, contact us today, and we’ll assist you!