Benefits of Freight Factoring

 

If your transportation company needs cash flow, choosing the right type of financing is critical. “All financing is the same” and “money is money” are just a couple myths floating around the industry, however choosing the wrong type financing for your business can actually be extremely detrimental.

Freight factoring is one option you can consider for cash flow. If you’re familiar with invoice factoring (and if you’re not, you can read this article), it’s very similar. In this article I’ll go over some benefits of using this type of financing to help you figure out if it’s a viable option for your transportation company to get the money it needs.
High initial advances: Most factoring companies provide carriers with high advances. They typically advance at least 90% of the invoices, and often the advance can reach 95%. Multiple programs also include fuel advances or fuel cards.
Quick approvals: Factoring clients usually get approved within just one business day of completing an application package. In many cases, it can be implemented and funded in just a couple days. Because of this, freight factoring is typically used to manage cash flow emergencies.
Take on more loads: Factoring can help improve your cash flow and allows you to take on more loads and new customers. Since you’re getting the equivalent of a cash advance from the factoring company you choose to work with, you will have the funds necessary to pay additional expenses such as fuel, driver pay, insurance and equipment payments.

Works with fuel cards: Freight Factoring companies typically work with fuel card providers, allowing them to offer you extra convenience.  Fuel discounts, fuel advances and extended funding hours are just a few of the benefits you may find.

Flexibility: The greatest advantage of using freight factoring to help fund your transportation business, is that the financing line can grow along side of your revenues. While more traditional loans (or lines of credit) only work for a fixed amount, a factoring line can increase if your clients meet the criteria required by your factoring company.

 

Freight factoring can most definitely solve a short-term cash flow problem, but can also work for a more long term use. This type of funding can let you take on new clients and more business simply because you now don’t have to wait up to 45 days for your clients to pay their invoices. The factoring line can grow along side of the growth of your business, which is a great feature that many other types of funding don’t offer.

 

If you’re interested in learning more about freight factoring or if you’d like to get started on the application process, visit https://cfc2.nettestpage.com today.