Everyone knows about bank loans but often times trucking and transportation company owners don’t know much about freight bill factoring. Freight bill factoring can help alleviate the stresses of maintaining your cash flow when your customers can take 30, 60 or 90+ days to pay you giving you funds to pay for fuel, maintenance, payroll and more. With freight bill factoring, the factoring company will provide you with immediate funds once you deliver the load giving you the piece of mind of knowing when you will get paid.
Below are 7 common myths about freight bill factoring. When you are looking for a factoring company to partner with you will find that these are not always myths for every factoring company but for the right partner they will be.
- I have to factor a minimum number of invoices a month to qualify.
With the right freight bill factoring company as your partner you won’t need to since some factoring companies don’t require a monthly minimum. You will be able to factor as many or as few loads as you want to each month or even skip a month if you choose. - I must commit to a long-term contract.
Not all freight bill factoring companies lock you into a long term contract. With the right partner you can decide when you want to use factoring. - I have to factor all my freight bills.
You will find some freight bill factoring companies let you chose which invoices to factor including which clients you factor and when. - I have bad credit so I won’t qualify for freight factoring.
One of the great advantages of freight bill factoring is that the factoring company will take into consideration the creditworthiness of your clients and not for you or your business. - I will have to pay a fee to apply regardless of I qualify or not.
You should not have to pay to put in an application and not all freight bill factoring companies will require you to do so. - All factoring companies hold part of the funds, from the freight bill, as a reserve until your client pays.
This is not true for all factoring companies. If getting all the funds upfront and not having to wait for any of them is a priority for you, it might be best to find a partner that does not hold a reserve. - I need money but I know there will be hidden fees.
The key to every relationship is communication and honesty and the relationship you have with your freight bill factoring company is no different.
