If you are running a transportation company with flatbed trucks then having access to cash when you need it to pay for expenses such as fuel, maintenance and payroll can be a major concern. Luckily freight bill factoring, also known as transportation factoring, can get you the funds you need immediately.
The four easy steps to freight bill factoring
Freight bill factoring can provide your business with a continuous source of operating capital. Here is how it works:
- You deliver the load
- You submit the paperwork to the factoring company
- The factoring company send you the funds within hours
- The factoring company waits to be paid by your customer
What is Freight bill factoring?
Freight bill factoring is a commonly used financial service that can help your transportation company get the working capital you need. Since it can be challenging for transportation companies to wait the 45, 60 or more days for customers to pay their invoices and the economic climate over the past few years has made it hard for them to get a bank line of credit. Fortunately, transportation companies have another option, freight bill factoring. Factoring can provide relief to your flatbed transportation business by giving you access to immediate working capital without your customer having to pay quicker than they normally would.
Benefits of working with a factoring company
Banks will consider whether your company is financially sound when deciding to approve a loan while factoring companies don’t look at the size of your business, your time in business or your creditworthiness. In fact, factoring companies look at the creditworthiness of your customers.
Additional benefits of freight bill factoring
- The business owner does not incur any debt as they are “selling” the receivable as long as their customer pays the invoice.
- You no longer need to offer early payment discounts because you are getting payment right away from the factoring company.
- The factoring company can provide you credit information on your clients to better determine pricing and the credit worthiness of your client.
- You can concentrate on building your business and making money instead of wasting your time worrying about when you are going to get paid.
Freight bill factoring may not be the first option you thought of when thinking of a working capital solution for your business as a flatbed hauler, but it can be the perfect solution to your cash flow challenges. There truly can be no downside. It can be just what you need to get the cash for your trucking company to pay for expenses such as fuel, maintenance and payroll and grow your business.
