Owning and managing a freight company isn’t easy. In the course of the day, you may wear many different hats: owner, manager, accountant, marketer, and human resources manager, to name a few. And when you’re juggling so many things, it’s easy to let something important slip through the cracks.
That’s where freight factoring comes in. It’s a financial service that helps streamline cash flow, leaving you free to handle other aspects of your business. But how does freight factoring work? Is it right for your company? Here’s what you need to know.
How Freight Factoring Works
Freight factoring, which is also sometimes called transportation factoring or trucking factoring, may be able to help you get a handle on your business finances and credit. Here’s a quick overview of how freight factoring works.
- You submit a factoring application. Once approved, we will issue a factoring agreement that lays out the specifics of your factoring contract, including your fees.
- We determine the creditworthiness of your customers and approve those that we will factor.
- You send us invoices to be factored. We advance you a percentage of the invoice’s value and work with your client to collect the amount owed.
- Your dedicated account executive will make collection calls as needed to collect your outstanding invoices.
- When the invoice is paid, we deduct our factoring fee, and return any reserves back to you.
The trucking factoring process is very simple. It’s designed to streamline cash flow for transportation companies, allowing them to pay their expenses and grow their businesses.
Are Back Office Solutions Part of Transportation Factoring?
One of the things that you may not know about freight factoring is that factoring companies offer additional back office services. It’s not just a cash advance product. For example, at Triumph, formerly known as Triumph Business Capital, we offer:
- Credit checks (including online credit checks)
- Invoicing and collections services
- Online reporting
- Data storage
- Fuel discounts
- Fuel advances
We have worked with over 20,000 carriers, freight brokers and shippers. We understand the specific challenges associated with operating a trucking company, and we’re here to help.
Is Freight Factoring Right for Your Company?
We work with potential clients to see if freight factoring is right for them. When deciding if freight factoring is right for your business, you should start by asking yourself these questions:
- Do my customers take a long time to pay me?
- Is a lack of cash flow negatively impacting my ability to grow my business?
- Are slow paying customers impacting my ability to pay my vendors on time?
- Do I have issues related to my customers’ creditworthiness?
- Do I know the broker/shipper will pay me before I take a load?
- Am I spending valuable time making collection calls?
If you answered ‘yes’ to any of these questions, then there’s a good chance that factoring some or all of your invoices can help. Your time is valuable. By taking advantage of what factoring can offer in terms of cash flow and back office services, you can spend more time servicing your customers and expanding your business.
Conclusion
Factoring for the transportation industry is a specialized service that is designed to help owner-operators like you maximize their cash flow, reduce delinquencies and grow their businesses. To learn about our factoring services for transportation companies, contact us today for a free assessment.