What Are Trucking Factoring Companies?
Trucking factoring companies specialize in purchasing unpaid invoices from trucking and freight businesses, allowing them to receive immediate cash for loads they’ve delivered but haven’t yet been paid for. This financing option helps trucking businesses manage fuel costs, repairs, and payroll without waiting on customer payments, which can take 30 to 90 days.
How Trucking Factoring Works
Here’s a step-by-step guide to how trucking factoring typically works:
- Submit Freight Invoices – The trucking company submits their unpaid invoices to a factoring company.
- Receive an Advance – The factoring company advances a percentage of the invoice value, often 80-95%, giving the trucking business immediate cash.
- Factoring Company Collects Payment – The factoring company collects payment from the client or shipper.
- Remaining Balance Released – Once the invoice is paid, the remaining balance is released to the trucking business, minus a small factoring fee.
Benefits of Trucking Factoring Companies
For trucking businesses, factoring companies provide numerous advantages that can help with cash flow and operational stability:
- Immediate Access to Cash – Receive payment for delivered loads right away instead of waiting for invoices to be paid.
- Covers Operating Expenses – Helps with expenses like fuel, maintenance, and driver payroll, keeping your fleet on the road.
- No Additional Debt – Factoring is an asset sale, so it doesn’t add debt to your balance sheet.
- Flexible Financing – Factoring is available as needed, based on sales volume, making it adaptable to fluctuating demand.
Frequently Asked Questions (FAQ)
Is trucking factoring different from standard factoring?
Yes, trucking factoring is specifically tailored for the freight and trucking industry, offering faster processing times and additional services such as fuel advances and load board access.
What fees do trucking factoring companies charge?
Fees vary but typically range from 1-5% of the invoice amount. Some companies may also offer volume discounts or lower fees based on the creditworthiness of clients.
How quickly can I get paid with trucking factoring?
Most trucking factoring companies offer same-day or next-day funding, helping trucking businesses access cash fast.
Why Choose Factor & Fund for Trucking Factoring?
At Factor & Fund, we understand the unique challenges of the trucking industry and offer specialized factoring solutions to keep your fleet moving. Our fast approval process, competitive fees, and additional benefits like fuel advances ensure you get the support you need to operate smoothly and grow your business.
Ready to Start?
Contact us to see how Factor & Fund can help your trucking business with flexible, fast, and reliable factoring solutions.