If your trucking company is constantly dealing with overdue payments from clients, factoring services could very well be the missing piece that keeps your business in good standing. Of course, that will largely depend on which factoring company you choose to partner with.
When trying to find the best freight factoring company for your trucking business, there are several essential qualities you should be looking for. These will include:
- No waiting on advancements
- Experience working with trucking companies
- Superb customer service
- Factoring rates that don’t hinder your business
We’ll go into more detail on each of these qualities so you have a better idea of what the best freight factoring company will provide your business.
No Wait, Hassle-Free
When utilizing factoring services, you’ll receive an advance on any invoices your clients have failed to pay on-time. These will typically be clients that you know will pay eventually, but seem to take forever to send payment.
Since you’ve already been waiting on your client for so long, the last thing you want is to be waiting on your factoring company to send you the advance. In fact, that would completely ruin the entire point of partnering with a factoring company.
Before you sign any contracts or agreements with a factoring company, ask them how long it will take to receive the advance!
Experience in the Industry
There are a lot of factoring companies in existence today. Some will offer their services to businesses in multiple industries, while others will exclusively serve one specific industry. When possible, it’s always best to choose a factoring company that has experience working with trucking and freight companies.
Keep in mind that the factoring company will be communicating with your clients. The more experience they have dealing with clients in your field, the more efficient they’ll be at getting the final payment from the client.
The factoring company will act as a middle man, so they will need to have frequent communication with both you and your clients. Much like any other service, you don’t want to choose a company that’s continuously rude to you and your clients.
Before selecting a factoring company to partner with, always check their customer feedback and reviews to ensure you’re working with someone that shares your standards.
Rates, Rates, Rates
At the end of the day, you will be giving a certain percentage of the invoice to the factoring company. Since this expense won’t be calculated when you put the invoice together, that means you’ll essentially be taking a small loss on that particular invoice.
These rates will play a critical role in whether that factoring company will provide any value to your business. After all, you don’t want to lose so much money that you defeated the purpose of using a factoring company.
If you’re looking for the best freight factoring company for you and your clients, we have a team of professionals that have put a list of the Top 5 Factoring companies for your trucking business. Feel free to contact us today with any questions!
Landrum, John. “What to Consider When Choosing the Best Factoring Company.” OTR Capital, OTR Capital, 10 July 2019, otrcapital.com/best-factoring-company/.