What is Freight Factoring?
There are different types of companies, but what many have in common is the need for immediate cash flow. One such industry that may have this need is the trucking business. For them, there is an opportunity to utilize freight factoring, which is often referred to as trucking factoring.
Other types of businesses, when in need of cash flow, may rely on invoice factoring to quickly access the money they need. In the trucking business, there may be an opportunity for them to use their unpaid invoices related to their freight deliveries for the same purpose. This is an option that is available for trucking companies, including the owner/operators of a truck.
The standard practice in the freight business for trucking companies is to have goods delivered, then invoice the recipient of the products for this service. The terms of payment can be anywhere between thirty to ninety days. This is money earned, but not received as yet, and may be funds that are needed by the trucking company.
There are financial institutions that offer freight factoring services. They will allow the trucking company to use their invoices to obtain the funds that they require. The factoring service may contribute somewhere between 80% to 90% of the value of the invoices.
The factoring company will then collect the amounts owed on these invoices as due. Once they have made the collection, they will then give the trucking company the balance owed from the advancement made on the invoices. This balance will be minus the fees that the freight factoring company will charge.
Non Recourse Freight Factoring
A difference with this type of factoring and regular accounts receivable factoring is that the company will assume the responsibility of payment. This is not the case with routine A/R factoring.
Top US Freight Factoring Companies
Every trucking business is going to have its own wants and needs when looking for services offered by a freight factoring company. Here we look at what the top ones in this business have to offer. They all have similarities, but they will each have their own unique offerings to take advantage of.
Apex Capital Corp: For those trucking businesses that want to deal with an established company, then Apex will be a good choice. They are well known for their exceptional customer service and have no-cost credit checks. They are appreciated for their fast funding and the offering of low fees.
Riviera Finance: This company stays in tune with what is happening within the trucking industry. They have been in this business since 1969, and many trucking firms have relied on their freight factoring services during this time. They welcome small companies and are there to providing the funding solutions they require.
Oakhill Capital Corp: This company has a lot of benefits to offer. Included in this list is the fact that there are no reserves, no processing fees and no contracts. Also, an added bonus is that there are no minimums. They offer comparable rates, and their focus is on the speedy release of funds.
Factor Finders: This company is providing options for factoring such as both recourse, and non-recourse options. They have an advance rate up to 97%. They also take pride in their same day funding. They do not have a minimum volume, and there are no application or invoice processing fees.
Thunder Funding: This one hits the list of favorites for small fleet trucking firms and owner/operators. They offer a non-recourse funding program, and for easy application, there is an electronic signup. There is an opportunity for same day financing and no setup fees.