Trucking Factoring Companies for the Trucking Industry





It's  obvious that  trucking factoring  rates will be  more than loan interest  asked for by a bank.  Yet  remember that you  simply cannot  truly compare  truck factoring (a short-term debt instrument) with a bank loan (a long-term note)  considering that they are two  entirely different  types of funding.


The key to  determining if you can afford to factor is not to look  just at the bottom-line  cost, but to also  look at how your company may  improve its profits through  invoice factoring.  Consider unearned income and lost  business opportunities due to your  shortfall of cash flow.

truck factoring

 In addition,  think about the  financial savings you  could very well experience with truck factoring. You can  cut out late payment  costs and  make use of early payment or bulk purchasing  discount rates.  Additionally,  take into account  whether trucking factoring will  enable you to  downsize your accounting  team by  scaling down the  volume of overtime used on collections and credit checks.

It is  infrequent that companies decide not to factor given that they could not afford to.  Actually, in most cases,  trucking firms decide to factor  since they simply cannot afford NOT to.


Top Ten Trucking Factoring Companies for the Trucking Industry

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 More Trucking Factoring Companies Articles 


How a  Cutting-edge Financial  Finding Made  a Run-of-the-Mill Trucking Company  Outstanding


 freight factoring companies

  Every time your customers take 30 to 90 days to pay an invoice, you are  funding their  enterprise. They are  making the most of the  funds which is actually owed to you to run their  company ... money you could be  utilizing to pay your  workers,  pay for new  machines or grow your  business in  various other ways.


 Trucking factoring companies  let you overcome the  troubles  made by your slow-to-pay customers by advancing to you a percentage of the invoiced amount.  In this way you have  funds  right after your service or product has been delivered, not 45 days later.


 That is unlike  conventional  types of  funding,  like bank loans and venture capital,  factoring companies  essentially look at the  credit reliability of your customers, not you. In short, factors are  likely to say '' of course'' when banks and investors say "no".  Thus,  even though you are a start-up  company,  invoice factoring can  open up previously closed doors to  possibilities and growth.



 Great Credit Management  Recommendations & Advice About Collecting Unpaid Sales Invoices


The survival and  success of all small, medium and large trucking  businesses is  reliant upon receipt of payment from customers in  regard of the product and services that the business  offers and invoice for. It is not  enough to  get the sales order and  supply the product if that sale can not be  transformed into cash. Cash is the lifeblood of every business and if debtors don't pay outstanding invoices promptly it can spell  calamity.


 A lot of businesses are forced to offer credit terms to customers in order to  continue to be  very competitive and win orders but this has a  detrimental effect upon their cash flow. The  harm caused by non payment (bad debts) can also be  substantial, and the longer the period of credit that is offered the more opportunity there is for the customer's  conditions to change, and  as a result payment to be delayed - in some cases permanently. The secret to success is good credit management and credit control.


There are two  facets to  profitable credit management. The first is taking care in choosing the businesses that you will  provide credit terms. The second is to  establish and employ an effective system of credit control  methods to collect unpaid invoices.




The following tips may be helpful when deciding  whether to offer credit terms to a customer:.

•  Regularly confirm the exact trading name of the customer e.g. XYZ Limited; XYZ Plc; Mr X and Mr Y trading as XYZ; or Mr X trading as XYZ.  Everyone these are uniquely  unique and  understanding the  precise trading name  could be  critical in pursing a customer for payment through the legal system, should the need arise. The customer's headed stationery, business cards or brochures can  usually be helpful in determining the exact name, although  keep in mind they  could be  false.


• Offer the minimum credit period that will be competitively  advantageous. The longer the credit period the more chance there is that the customer's financial circumstances may change.


•  See to it that you have all the customer's contact  particulars: addresses, phone numbers, fax numbers, mobile numbers, email addresses etc.  Preferably, take the contact details of the prime movers. These  may be extremely helpful if you need to  call the customer regarding unpaid invoices  down the road.


• Trade references  may be helpful but most businesses will have at least a couple of customers that will  swear by them.


• Credit information about customers can be purchased from a  range of  companies. This can give you insight into the financial position of a business. You can also ask the customer to provide you with financial information about their business.


• If a considerable amount of credit will be at stake  think about visiting the customer to confirm that the address given exists. A great deal of  facts about a business can often be gained just by  checking out their offices and noticing what is going on e.g. are they  swamped or is trade slack?


• Ensure that the customer has  checked out your terms of trade and has accepted the credit terms that you have agreed to offer.


•  Be sure you  have knowledge of the process for  forwarding your invoices and  getting payment from the customer e.g. who do you send them to, when is their check run etc




The following  recommendations and hints may be useful in  making sure that you have an effective credit control process in place to collect unpaid sales invoices:.

•  Learn the customer's payment process and procedures e.g. if you know the date that they  carry out their monthly check run you can time your statement accordingly.

•  Look into "pre-dunning", calling the customer before payment is due to confirm that your invoice has been received and that there are no  causes for non payment.

•  Start a systematic approach to  providing statements,  delivering chasing letters (which gradually become firmer) and calling the customers.

•  Always keep copies of any correspondence and notes about telephone conversations. Confirm conversations in writing and  preferably  obtain the customer's written agreement to any payment  guarantees.

• Try to call back and speak to the individuals concerned  in lieu of leaving messages on answer machines.

• Consider other  approaches of  checking with debtors e.g. text messages to mobile numbers or email and fax.

•  Be sure to remain calm but  self-assertive on the telephone.

• Follow up  immediately on any broken promises of payment.

• Shorten the process by emailing or faxing documents  as opposed to posting.

• If  required consider  putting an end to further  shipments once invoices are overdue.


The field of credit management and credit control is  considerable and these are  several key points to  take into consideration.  Lots of businesses have staff in-house that undertake this work for them but there are  other options.


Trucking Factoring companies specialize in out-sourcing such services for their clients. They have specialist staff that can undertake the collection of your sales ledger for you and in many cases this  could be achieved with cost savings. The cost of  receivable financing should be weighed against the cost of recruiting specialist staff or  dealing with the task yourself.


It is also  feasible to receive bad debt  safeguards (also called non recourse) which can  eradicate the need for you to  bother with which customers are credit worthy. The factoring company will  look into the customers standing for you and they will grant a credit limit  for each and every customer.



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About The Trucking Industry

trucking factoring

Trucking companies provide an essential service to the American economy by transporting large quantities of raw materials, works in process, and finished goods over land typically from manufacturing plants to retail distribution centers.

Trucks are also important to the construction industry, as dump trucks and portable concrete mixers are necessary to move the large amounts of rocks, dirt, concrete, and other building materials used in construction. Trucks in America are responsible for the majority of freight movement over land, and are vital tools in the manufacturing, transportation, and warehousing industries The importance of trucking is communicated by the industry adage: "If you bought it, a truck brought it."

Retail stores, hospitals, gas stations, garbage disposal, construction sites, banks, and even a clean water supply depends entirely upon trucks to distribute vital cargo. Even before a product reaches store shelves, the raw materials and other stages of production materials that go into manufacturing any given product are moved by trucks. Trucks are vitally important to U.S. industry, however, measuring the impact of trucking on the economy is more difficult, because trucking services are so intertwined with all sectors of the economy.

According to the measurable share of the economy that trucking represents, the industry directly contributes about 5 percent to the gross domestic product annually. In addition, the industry plays a critical support role for other transportation modes and for other sectors of the economy such as the resource, manufacturing, construction, and wholesale and retail trade industries.


Trucking Factoring Companies Articles


Advice to Trucking Companies Whose Cash Flow is Troubling

Distinct from a bank loan, a trucking factoring  contract is a customized agreement which  takes into consideration the  unique  requirements of your company.  That is  quite different from the  common banking  record  utilized to  get a loan,  in which is a  typical  arrangement based on the bank's  requirements.

 On top of that,  plenty of  invoice factoring companies do not have maximum  boundaries. If you have  very good, creditworthy  customers and there are no legal  hurdles (like liens, lawsuits or judgments),  receivable factoring companies will  finance all the  receivables you can generate. This contrasts  significantly with a  usual bank situation,  in which every loan  has a maximum limit .

A new client  receives  preliminary approval in  no more than 24 hours, and  money in seven to ten days. By contrast, a loan application to a bank can take  up to 30 to 60 days to cycle through to the loan review committee, with  financing to  come next in yet another 30 to 45 days.

In addition to  speedy  acknowledgment time,  a factoring company does not  lock up  most of your  business's assets (just the receivables) or incur debt.  Firm ownership is not  impacted, keeping your  company as liquid as possible, while  boosting your balance sheet and  total financial position.  On the other hand, banks will, in most cases, not only file a lien against (or hold as collateral)  all your commercial assets, but also against your personal property ( consisting of your house, your dog, and your  tv ).

freight invoice factoring

With  receivable financing,  absolutely no  added debt is  acquired and the credit rating of your  firm  stays protected.  Commonly a  receivable financing  contract can actually  improve a  firm's chances of restructuring long-term debt.  Due to the fact that factoring  brings an infusion of  funds, the  business can pay its bills  on schedule and clear up other  remaining credit  commitments. Basically, this cash may  make it possible for a  business to "get its act together"  in such a way that encourages banks and other financing  bodies to look more  agreeably on  quite possibly restructuring debt or financing new property or construction. It's  certainly not  surprising for a  very good client to " move onto" to bank  finance after a period of "financial adjustment" while  invoice factoring.

While the  benefits of  freight factoring over borrowing money are significant,  the majority of the  firms do not have the  privilege of  same  accessibility to both methods of financing. Banks, with their regulatory controls and inherent inflexibility, do not make it  very easy for  many businesses to approach them for  funding.  Using a factoring company, on the other hand, is the purchase of an asset and,  therefore, is not regulated by state of federal agencies.

 Our company  regularly hear  business enterprise owners  gripe about their banks, and the  belief is  typically the same: the only  folks who can  secure a loan are those who don't  really need one!

The  Initial Rules of the Costs of Truck Factoring Companies

It costs money. It costs more than bank money. Does it cost  much more than investor money? Depends upon  what amount of equity you relinquish to your investor, and  many will  need the lion's  slice.  Still let's  stick to the costs of  using a factoring company.

The Second Rule of the Costs of Factoring

It must be  looked at as a transactional cost  instead of interest charged for a  time frame, for a  many reasons.


 Firstly,  factoring companies must charge more for the money we advance because the length of time the money is outstanding is so short, usually 30 to 45 days. To charge bank rates on transactions of this short  timeframe  rewards only the client; the  invoice factoring companies  earns no  cash, and  actually, would lose his shirt.

In the final analysis, you as a  business owner,  have to ask yourself these two questions:.

1.  Could the cash advanced  make it possible for me to make  a lot more (one way or another) than the fees charged?

2.  Can  a factoring company  permit me to  remain in  operation?

It's the answer to these that should  actually make your  selection for you.

 Additionally note that, for the factors that we're  acquainted with, fees are negotiable. They are a  versatile ( in  good reason) part of the agreement,  yet  just remember, as stated, the  transaction must  work for everyone.

 Our Company has been known to  make a deal with  customers that have special  demands or situations,  for example,:  extremely low profit margins, high monthly sales with (shall we say) less-than-creditworthy customers, commitments of  ensured monthly volume,  capacity for  impressive growth with the  sector, etc. For  this kind of clients,  factoring companies have been known to agree to a high-volume discount schedule.


This is  simply just one  illustration of  exactly how the schedules  may possibly be manipulated to  fit all concerned--  yet please  be aware of, we factors are  more willing to  check out, discuss,  speaking of,  take into account, and  think about  all the possibilities, but they  need to make sense, i.e., you've got to respect our right to earn a fair fee for the services rendered.

The rule is  uncomplicated:  the receivable financing companies negotiate a fee schedule that we  know will  help us both. If,  throughout the course of these negotiations, you feel that you  need to have (or are entitled to-- whatever) a lower rate than we're willing to  give, or vice versa, we're both free to walk away from the table.

 Prior to Proceeding, Feel  Great About Your  Receivable Financing Company.

Keep in mind that as your  factoring company is  checking into you and your clients, you should be  checking into your  factoring company.  Demand references and  very carefully read any  agreements they may ask you to sign.  Very good  factoring services  are present  to assist you  identify  approaches to your cash flow  complications  whilst  delivering  top quality service and charging  honest fees. As you  examine the  documents, ask questions! A  great,  reputable factor will appreciate the time that you are taking to  learn about the process and talk with you to answer any questions you have.

Completing the Application.

 Just one of the most  essential  papers that you will be asked to  endorse is a Purchase and Sale Agreement,  in addition  described as a P&S Agreement.  While a  receivable factoring companies's due diligence process is  far more "client-friendly" than the bank loan process, it  may be  really  costly for the factor.


Trucking Companies-Check the Kind of Bank Account You Want

 Trucking Factoring Companies- A  Discussion With A Trucking Company Owner



I've owned 11 businesses and still own four of them and  just in case you 'd like to  find out one of them has an Letter Of Intent to Buy in hand and got to profitability  taking advantage of FACTORING ONLY and is  absolutely - as in  absolutely - debt free.  The reason why? They never had to borrow.


As to having used or not used freight factoring: With three of them and soon  to become a fourth I have used  trucking factoring companies. Why? You can capitalize the business without borrowing because  invoice discounting is not borrowing. FYI: One of those businesses fulfilled orders it could only have dreamed of fulfilling had it not used  receivables factoring. It's the one with the LOI in hand in fact.


 Invoice factoring, like it or not, is actually a front end transaction that capitalizes a company without their having to borrow. It's not complicated and only dates back to the Eqyptians ... and still  functions.  About it not opening the flood gates? If you have a million dollars in invoices and can not borrow against them nor  turn them to cash your business (my businesses were any way until I factored) are dead in the water until you get in some cash. If you have some alternative to that then God Bless you . An invoice is a non-performing asset unless you can turn it into cash but I am sure that I'll stand corrected.


QUESTION: If you as a business owner could hire a sales person and they would help you access sales you otherwise could not BUT you had to pay them a 2 % - 3 % - 5 % commission BUT they would  boost your business 10 or 20 or 30 % would you  employ that person? If you  agree this then you are endorsing  invoice discounting. It's not different than a credit card transaction. The business owner is selling the transaction to a third party to  get the payment so how is factoring different from cc transactions?


 Concerning the cost of  invoice factoring? It  looks as if that  forfeiting 2 % on the front end of a credit card transaction is  all right (on a daily basis and using your  method in your reply  incidentally that  computes annually to 760 % by the way but we both know that this isn't true now don't we?). Why should a retailer accept cc processing? More business  possibly?  Much larger sales? And what are doing? They are selling the transaction to the credit card company. Yes? No? FYI: I offer that service too ... not  rocket technology.


 Invoice discounting  can be be used by a company that is turning away sales and can not grow otherwise and note: The only time that they factor is when they  are in need of working capital to  complete an order that they would otherwise lose. It's like the sales commission: The only time you pay the salesman is when he sells i.e. it's a sale you either didn't have with the salesman or it's a sale you can't fulfill because your money if  locked up in your invoices and you can't get it out.


That said it's pretty simple equation when you can not access liquidity:.

1.)  Use factoring and  surrender 3 % of the sale OR kiss off the sale and disappoint the customer and lose my profit margin ... 10 %? 20 %? 30 %?


2.)  Use invoice factoring  and give up 3 % of the sale OR  dismiss the sale and disappoint the customer and lose my profit margin ... 10 %? 20 %? 30 %?


3.)  Use factoring  and give up 3 % OR  dismiss the sale and disappoint the customer and lose my profit margin ... 10 %? 20 %? 30 %?


What part of being in business to maximize a profit am I missing?


 Regarding the 24 % annually(or as above it would be 36 %) let's  always remember that the owner of the business above got to complete transactions that he or she otherwise wouldn't have  had the opportunity to. Not a lot different than the retailer that get's to close a sale with a customer comes in with their cc is it?


Also please explain this: A bank loans someone money ($100,000) at 9 % annually. A  factoring firm  provides $100,000 a month at a 2 % discount and  carries out this 12 times  during a year. Hmmmmnnn ... the bank  gave $100K for 9 % BUT the factor actually delivered $1,200,000 for 24 % so which is the  much better  offer? The bank? It owns you: Invoices, inventory, equipment, your house and your signature ... the  factoring firm has a right to your invoices: End. Which is  more desirable?


 In addition:  Just what happens with the bank when you need $200,000 and you are only approved for $100K? If you have invoices the  factoring firm funds you and you make the sales and reap the profit ... the bank  says to you, "Let's see how you do over the  upcoming year and  revisit" or the infamous reply, "We don't like your collateral and your credit is weak" and the bottom line is that they don't have ability to take the risk or perform the work that a  factoring firm does.


 DO NOT FORGET: MONEY IS NOT LOANED IN A FACTORING TRANSACTION. If you can not accept or  recognize that then there is no sense in conversing  more on this ...


In closing: To  tie in to the last statement that factoring at 2 % monthly in discounted interest costs 24 % in interest margins annually then I'll  accept that but only if it can be agreed that a company that sells product with a 30 % monthly margin  herewith makes a 360 % annual profit to which you will  howl back "They're not the same" and to that you 'd be right:  Invoice Factoring and borrowing money from a bank ...  Are definitely not the same.





How Can a Trucking Company Benefit By Using Trucking Factoring Companies

trucking factoring companies


 Factoring Invoices: An  Exceptional  Funding Option for Trucking Businesses.


Trucking businesses,  particularly those who  have actually not been  around for very long, will  typically discover it  hard to secure a loan. Banks are commonly  reluctant to  provide  cash to businesses that don't have a  great deal of  earnings and assets. They  likewise want proof of the viability of a business , specifically small ones,  have been around for a  particular  period of time  prior to they  handing over any money. Because a medium-size business|  commonly has  a couple of  money generating options when  money needs  occur. One  choice offered,  however  typically  neglected, is receivable Financing. This is an excellent way for a small business to  get  money.


Factoring invoices is  useful for  a number of reasons. It  enables a  business to raise money without acquiring  brand-new  financial obligation. While debt is  in some cases is essential,  the majority of businesses would  choose to raise cash without obtaining  debt. Debt is  high-risk, and when it  can not be paid back,  possessions can be repossessed. If the debt is large enough, it  might even  require a company  to go out of business.


Receivable Financing  does not  present these  exact same problems. The  cash paid to the  company selling their invoices is  protected by those invoices. The work  typically  has been done and the  company is only waiting to  get payment.


Trucking factoring companies are likewise a  really excellent  alternative  since it is a way for a  medium-size  companyto get money  truly  quickly. More  typically than not ,  when a company is in a  money crunch, they  do not have much time to figure things out. Their  workers have to be  paid, there are  materials to  get and  leases to be paid. These things  typically  can not wait, at least not for a  really long time.  For that reason, the time factor is  essential. A small trucking company will need to secure funds as soon as possible. Truck Factoring  permits them to do that. The company's first experience with a factor may  mean they wait 4-7 days to get paid.  Nonetheless,  after that it is likely they will receive  cash in as little as 24 hours.


After all of the  information have been  organized, the factoring  procedure is  quite simple. A company will  offer their invoices to a trucking factoring company, as much as 95 % of their value.  For instance, a $100,000 invoice  could get $90,000. This  cash can be  made use of for whatever the  business  desires to use itfor. After they  have actually received cash for the invoices, the factoring company will  get paid on the invoices. The original terms of the invoices apply. After they have  been paid on them, the  cash is returned to the  business they  bought them from, minus the factoring company's  charge. It's as  easy as that.



Trucking Factoring Companies offer their  factoring services nationwide including the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho State, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.



All Sorts of Trucking Companies Use Factoring Services:

Liquid & Dry Bulk

Containerized Freight

Intermodal Drayage

Local Cartage


Oil Field

Air Freight

Heavy HaulingTrucking -Grain

Freight Train Load


Trucking Brokers


Passenger-Tour Bus


Sand & Gravel


Owner Operations

Local With Storage




Dispatch Service

Motor Freight


Contract Hauling




Oilfield Trucking Services

  • Rig Movers
  • Water Haulers
  • Mud Haulers
  • Pipe Haulers
  • And More
  • Dump Trucks
  • Equipment Haulers
  • Crude Haulers
  • Flatbed Carriers
  • Frac Sand Haulers
  • Winch Trucks
  • Vacuum Trucks
  • Gravel Haulers
  • Haz Mat Hauling