For most trucking companies, one of the major issues they deal with has to do with getting customers to pay on time. Many know the frustration that comes with delivering a load and sending an invoice, only for a customer to take every bit of 30 days to remit payment.
That, in essence, is the type of problem that freight factoring is designed to help avoid. Once a load has been delivered, a freight factoring partner can give your business most of the invoice amount the same day. They'll hold onto a small percentage as a fee, and full payment will eventually be collected when the customer pays the invoice themselves.
It's a great way to make sure that money is always coming into your business in a timely fashion. It also brings with it a wide range of additional benefits that cannot be ignored.
By far, one of the major benefits of leveraging freight factoring with Advanced Commercial Capital has to do with the positive impact it can have on your business' cash flow. Just because your customers have 30 days to pay an invoice doesn't mean you should have to wait around for what feels like an eternity to see money for work you've already performed. There are times when that money will be essential - you need it quickly to pay for things like payroll or even fuel to keep your trucks on the road.
Freight factoring is a way to get money coming in the door as quickly as possible, all so that you can keep hauling no matter what.
Many new trucking companies in particular also use freight factoring as a way to supplement the administrative side of their organization. Communicating with customers, following up on invoices, collections - all these things take a great deal of time and effort. When you partner with Advanced Commercial Capital for freight factoring, all that becomes our responsibility. You get the money you've earned, and you can move onto the next job. It also frees up the valuable time of your workers so that they can focus on more important matters.
At Advanced Commercial Capital, we understand that not all trucking companies are created equally. Every organization is unique from the next - a concept that extends to your overall cash flow needs as well.
That's why our team is ready and waiting to help. We're prepared to answer any questions you might have in terms of freight factoring as a concept, as well as how we're prepared to offer you a solution built for your unique requirements. If you want to learn more about freight factoring in general, contact us today so that we can get started.
Freight factoring is a process that essentially sees you "sell" your outstanding invoices to a freight factoring company. Once you deliver a load to a customer, you send them an invoice for services rendered. They typically have 30 days to send that payment before it is considered late. They may have totally legitimate reasons not to pay quickly - but that doesn't exactly help you and your organization.
Freight factoring allows your trucking company to get paid quickly. Many organizations like Advanced Commercial Capital will pay in as little as 24 hours. You don't have to wait for the customer and can quickly use those funds for essential matters.
The mechanics of freight forwarding are straightforward by design. All you need to do is:
At Advanced Commercial Capital, our freight factoring program is non-recourse - meaning we take on all the risk and don't charge you back for unpaid invoices. You don't have to factor all your invoices through us if you don't want to. We offer custom solutions for businesses of all types and sizes. Everything is tailored to meet your current cash flow requirements.
In addition to wire transfers, we can also provide a comchek or EFS money code so that you can get your money if you prefer. There is also the option to take advantage of a fuel card as a way to get same-day funding.
Generally speaking, there are two main types of freight factoring to choose from: recourse factoring and non-recourse factoring.
Recourse factoring is a situation where the seller takes on all the collection risk. Here, a freight factoring partner would use your business' receivables as collateral. If the customer in question never ends up paying their invoice, the factoring company will then turn to you for the money.
Non-recourse, on the other hand, is where the freight factoring company bears the risk of collection. They're essentially purchasing the invoice from you. If the customer doesn't pay, they don't get to demand payment from you.
In the end, freight factoring is often seen as the best way to financial stability for your trucking company for a host of different reasons. For starters, unlike with a credit card company, you're dealing with transparent, competitive rates. There are no surprises or massive interest rates to deal with. When you work with a partner like Advanced Commercial Capital, you also have access to this option 24 hours a day, seven days a week. Between the almost immediate funding and the ease of setup, it's clear why this has become a popular technique with trucking companies over the last few years in particular.
If you're interested in finding out more information about freight factoring, or if you'd like to find out about the benefits that come with finding the right factoring company trucking partner, please don't delay - contact Advanced Commercial Capital today to request your free quote.
