You have numerous outstanding freight bills that you are waiting to be paid for, and they are cutting into your cash flow making it challenging to cover expenses such as fuel and insurance. You have researched your options, maybe by reading some of our posts such as 3 Cash Flow Tips for Trucking Owner-Operators and Solutions to Eliminate Late Payments, and have determined that freight bill factoring is something that could help you and your trucking company. So now what? How do you find a freight bill factoring company that will be reliable, transparent and will truly help you and not make things more difficult? What do you need to get started? What will freight bill factoring mean for you and your trucking company? Let me try to help with the answers to some of your “now what” questions.
How do you find a trucking factoring company that will be reliable, transparent and will truly help you and not just make things more difficult?
My first stop whenever I’m searching for something, whether it’s a product or service, is to Google it and see what others are saying. Any company can say what they want about how they do business and how they can help you, but I feel to get the real story you need to hear from others who are not biased.
Once you have narrowed it down to a few possible options, I believe the next step is to reach out and ask a few key questions. From my experience the key questions when talking to a potential freight factoring company are:
- What are their terms and fees? This includes how many loads do you have to factor, which loads do you have to factor, how long are you locked into a contract, ways you can access the funds and is there an application or cancellation fee.
- What additional services do they offer? Some factoring companies will charge you a fee for everything extra they do, and others are looking to truly partner with you and help you grow your business. Some of the additional services that a true partner can include for no additional fee are credit checks on your potential shippers and brokers and back-office services such as invoicing, processing, postage, collecting and more.
- How much of your invoice will you receive up front? Some factoring companies hold a reserve to be paid once your client pays them and others give you the full amount, minus their fee right away. You will have to decide which option works better for you and your company.
- Do they specialize in the trucking industry or do they have a wide base of clients? It is important to have a partner who truly understands your industry because as they say “a jack of all trades is a master of none.”
What do you need to get started?
Most, if not all, trucking factoring companies will have you start by completing an application. Along with the application, you will need to submit documents such as Articles of Organization, a Customer List, Accounts Receivable Aging, a Copy of a Voided Check, a Copy of Operating Authority (MC#), and a Copy of Applicant(s) Driver’s License(s). They will use this information to determine if your company is a fit for their services and what your rate will be. The application process usually takes less than a week, although it depends on how long it takes to get all the necessary documentation.
Once the application process is complete and you have determined what shippers and brokers you will factor the freight bills for, you will need to submit a copy of the invoice, proof of delivery and any other applicable paperwork. After the paperwork is gathered, you will receive your funds from the freight bill factoring company.
What will trucking factoring mean for you and your trucking company?
The reviews that you previously found might give you some insight into this as others may say things such as they get their money quickly now and have been able to grow their business. I also know from experience that our clients find they can spend more time on the road because they don’t have to worry so much about their cash flow and managing some of the back office aspects of their business.
Now what?
I hope I have helped answer some of your “now what” questions and helped you in your quest for increasing your cash flow by partnering with a trucking factoring company. We hope you will Google us to see what our clients have said about us and reach out to us at (801) 676-0182 or info@tetracapital.com. We would love the opportunity to answer some of your key questions about how freight bill factoring can help you and your trucking business.
