What is factoring in trucking?
Factoring in trucking is a financing option that provides immediate payment for your invoices, so you don’t have to worry about waiting 30, 45, or 60+ days to be paid once you haul the load. Factoring in trucking is also called trucking factoring or freight factoring. It allows your trucking company to easily improve cash flow and reap the many benefits that partnering with a trucking factoring company provides.
How does factoring in trucking work?
Factoring your freight bills is quicker and easier than you might think and will give you the funds you need for fuel, maintenance, payroll, and more. There are 3 easy steps to factoring in trucking once the quick application process is completed:
- You deliver the load and submit the paperwork. (If you choose Tetra Capital as your factoring company, you can scan or fax a copy, we don’t require you to overnight hard copies.)
- The trucking factoring company will send you funds on the face value of your unpaid freight bill. (With Tetra Capital, this happens within hours.)
- Collection calls and follow-ups to ensure payment for your invoices are managed by your account executive while the trucking factoring company waits to be paid by your customer.
There are no restrictions on what you can use the funds for, and one added bonus of factoring is that the factoring company will consider your brokers and shippers’ creditworthiness instead of yours.
Benefits of factoring in trucking
I had previously mentioned that you could reap the many benefits that partnering with a trucking factoring company will provide, so you might be wondering what those are.
- You will save time and money because with the right factoring company, you will no longer need to worry about invoicing, processing, postage, collecting, and more because they will do all that for you and even possibly at no additional cost!
- You get access to your cash immediately. Since the factoring company is sending you payment immediately, you no longer need to worry about how long your brokers and shippers will take to pay.
- You will know if your brokers and shippers are at risk for not paying you for the loads you haul because the factoring company will run credit checks on all approved brokers and shippers.
- You will never have to worry about how you will cover your fuel costs with services such as fuel discounts, fuel advances, and immediate payment.
Tetra Capital has helped numerous trucking companies get immediate access to the funds they need to run their businesses. With a unique background in both the transportation industry and the factoring industry, our goal is to make your life easier by providing you with transparency and exceptional personal service. We understand that not ALL businesses are created equal. Each business is unique and has different needs and objectives.
We hope that you are no longer wondering what is trucking factoring? But are wondering how quickly you can get started. Fortunately, when you give us a call at (801) 676-0182, the answer to that can be less than 5 days away.