Author Archives: adcomcap

How Trucking Invoice Factoring Can Help with Trucker Shortages

The trucking industry is currently experiencing a massive shortage of truck drivers. Despite unemployment rates remaining high throughout the country, factors such as restrictive rules regarding drivers, long hours, and inconsistent wages are serving as roadblocks to more workers joining the trucking industry. This lack of drivers is inhibiting trucking companies’ business, leading to reduced load capacity, missed delivery deadlines, and overall unhappy customers. However, trucking invoice factoring may be able to help companies with these struggles.

What is Trucking Invoice Factoring?

Trucking invoice factoring allows companies to receive payment immediately from unpaid invoices. Essentially, a trucking company will submit an invoice from a load they delivered to a third party and that third party will pay the company the amount of the invoice within a day or two, for a small fee. The third-party will then collect payment on the invoice from the customer, instead of the trucking company.

There are two types of trucking invoice factoring services – recourse and non-recourse factoring. The difference between the two involves the risk retained by the trucking company.

Recourse factoring provides that the trucking company remains ultimately responsible if the customer does not pay the invoice. Fees for recourse factoring arrangements are often lower than in non-recourse factoring arrangements, to compensate for the risk retained by the company.

Additionally, invoice factoring companies will often provide credit check services on the trucking company’s client so that the company can properly evaluate the likelihood of the client defaulting on the invoice. This helps the company to make a fully informed decision before taking on the additional risk of a recourse factoring arrangement.

Non-recourse factoring arrangements protect the trucking company in the event their client does not pay the amount of the invoice to the factoring company and the factoring company takes on the risk. Thus, in the event of a default by the client the trucking company is not financially responsible. Fees on non-recourse factoring arrangements are generally higher than those on recourse factoring agreements.

How Does Trucking Invoice Factoring Work?

First, the trucking company will deliver the load contracted for as normal. Then, the company will submit a copy of the invoice, or bill of lading, to the factoring company. Depending on the factoring company utilized this may be through email, facsimile, or a web-based portal maintained by the factoring company. The factoring company will then verify the invoice and then pay the trucking company, oftentimes that same day.

In a recourse factoring agreement, the trucking company will receive the agreed advance once the invoice is verified. Then the factoring company will pay the trucking company the remaining amount of the invoice, minus fees, once the client pays the factoring company.

Why Trucking Invoice Factoring?

Participating in invoice factoring arrangements can have several benefits for trucking companies. For example, invoice factoring provides companies with needed funding quickly. Waiting for clients to pay invoices once a load is delivered may take thirty to ninety days and obtaining long-term loans or other forms of traditional financing can be hard to get at times.

In contrast, invoice factoring delivers much-needed funds to trucking companies, oftentimes within twenty-four hours, and is much easier than more traditional forms of financing. While loans require credit checks of the trucking company, invoice factoring weighs the client’s credit as opposed to the trucking company’s because it is the client liable for the money due.

Additionally, while traditional loans involve the paying of interest, which can add up over time, invoice factoring only requires a small one-time fee to utilize invoice factoring services. And in the same vein, invoice factoring does not involve the repayment of debt like traditional methods of financing, because invoice factoring operates to provide trucking companies with the money they are otherwise owed.

Another benefit of invoice factoring is fuel advances. Some invoice factoring companies offer fuel advance programs as part of their invoice factoring. This involves an advance of the cost of fuel for the delivery of a load before the load is actually delivered.

In addition to advances in the cost of fuel, many invoice factoring companies also have programs to help their clients save on the cost of fuel. These savings come in the form of fuel discount cards, which can be utilized at tens of thousands of truck stops nationwide and can save trucking companies thousands on the cost of fuel.

Having a predictable cash flow also makes it easier for trucking companies to grow their business. Having a steady cash flow allows truck companies to consider expanding their current routes, which will increase the profits made from current routes, and allow truck companies to expand the reach and profitability of the company.

Having a working relationship with an invoice factoring company can also help trucking companies save on their insurance. All truck companies need insurance to protect their fleet while on the road. Many invoice factoring companies help their trucking clients save on these costs by providing pre-negotiated discounts from the nation’s top insurers.

How Exactly Trucking Invoice Factoring Can Help with Trucker Shortages

The financial benefits of invoice factoring discussed above can help trucking companies address the shortage of truck drivers. To start, the increase in cash flow and faster payment of invoices can help companies increase their payroll to be able to recruit new drivers. Additionally, truck companies can focus on retaining their current drivers by increasing compensation packages and benefits, as well as being able to allow drivers to have more time at home with family once new drivers have been recruited and trucking fleets are fully staffed.

Trucking companies will also be able to provide additional benefits to their drivers, such as reloadable fuel to cover gas expenses. Finally, these companies can make investments in technology to manage their workforce and increase the efficiency and happiness of their workforce.

In summary, the trucking industry is currently facing many challenges including a shortage of truckers. Advanced Commercial Capital can help trucking companies address the shortage of truckers by adding predictability to trucking companies’ cash flow. This increased cash flow can then be utilized to hire new truckers, incentivize current truckers to stay in the industry, and increase efficiency amongst the workforce. Contact us today!

What is Freight Invoice Factoring & How Does it Work?

Freight bills can oftentimes take up to two months to be paid out, creating a significant delay for trucking companies from the time they deliver a truckload to the time they are paid for that delivery. For trucking companies who are trying to get established or expand their operations and need money sooner rather than later this delay in payment can pose problems. One method available to trucking companies to address this issue is freight invoice factoring.

Invoice factoring allows trucking companies to immediately receive payment from unpaid invoices. Invoice factoring companies provide trucking companies quick payment on their unpaid invoices, in exchange for a small fee. The trucking company can then use that money for whatever purposes they need, such as covering payroll, taking on more loads, or expanding their business.

How Does Invoice Factoring Work?

Invoice factoring is simple and easy to utilize. Most invoice factoring plans follow the same basic outline. First, the trucking company delivers the load to their customer as they normally would. The trucking company then sends the freight bill to the customer and submits a copy of the freight bill to the invoice factoring company. The invoice factoring company will then send you the advance by money wire or direct deposit. And finally, your client pays the invoice amount directly to the invoice factoring company.

How Can Invoice Factoring Help a Trucking Business?

The most obvious method in which invoice factoring can help your trucking business is by providing you with cash from the loads you deliver faster. This allows you to ensure you have sufficient funds on hand to cover costs such as fuel, vehicle maintenance and repair, containers, drivers’ payroll, licensing fees, and insurance expenses. Quicker payments also help improve cash flow and allow your business to operate in a more efficient manner.

Another major benefit of invoice factoring is the ability to allow your business to grow. Whether you are looking to expand your fleet, take on additional loads, hire more drivers, or invest in additional marketing and promotional work, your trucking company requires cash. When you have to constantly wait for payment from loads already delivered it can be difficult to save up the capital necessary to expand.

You may also find yourself stuck in a cycle of waiting for payment, then having to use that payment once it comes in to fund future loads. This cycle is preventing you from ever accumulating the capital necessary to grow your business. Utilizing invoice factoring services helps you get the money on hand to achieve your business goals.

Additionally, emergencies can’t wait. Every business experiences some sort of unexpected expense at some point. If you haven’t had the opportunity to save sufficient funds your trucking company may find itself in a bind. Invoice factoring can help you get the money you need when an unexpected cost comes up.

Why You Should Use an Invoice Factoring Company

First, as discussed at length, invoice factoring provides you with immediate cash flow. Additionally, invoice factoring allows you to get immediate funding even if your trucking business has bad or no credit. Invoice factoring is essentially an advance of the money your client already owes you, as opposed to a loan that is not associated with a guaranteed cash flow.

In addition, your eligibility for an invoice factoring plan is not heavily influenced by your company’s credit history (or lack thereof). In fact, it is likely that your client’s credit history may have a greater impact on your eligibility for an invoice factoring plan than your own credit report.

Invoice factoring also saves your company time and stress associated with collections. Once you have engaged in an invoice factoring plan it is as if you assign the associated invoice to the invoice factoring company. Thus, the invoice factoring company then handles the general accounting responsibilities associated with that invoice, such as collections and accounts receivable. These are major responsibilities (and potential headaches) that you no longer have to worry about, freeing up your time to focus on other tasks.

Invoice factoring companies also provide you with a great deal of flexibility. Invoice factoring plans are generally done on an invoice-by-invoice basis, therefore, there are no long-term contracts involved. You can decide how many invoices you would like to submit to the invoice factoring company. You decide whether to use invoice factoring as a one-time solution for a quick payout or you may plan to use invoice factoring regularly to simply speed up the payment process.

Another benefit of invoice factoring is that it provides lower associated costs than traditional financing. Asset-based loans or lines of credit have an associated timeline of when you need to pay back the money associated with the loan. These forms of financing also come with interest rates that require you to pay an increased premium the longer it takes to repay the loan. In contrast, with invoice factoring, there is one fee associated with the plan which is paid upfront.

Invoice factoring companies often provide additional benefits to their clients, such as fuel card programs. These fuel cards allow you to load money onto the card to pay for fuel and often provide savings options at designated fueling stations. The invoice factoring company may also provide the option to receive a fuel advance once an invoice has been booked. These programs make it easier for trucking companies to track fuel costs and provide money-saving opportunities.

As you can see invoice factoring provides many benefits beyond simply paying a freight bill faster than the typical client. The next time your trucking company is in need of cash or requires a quicker payment consider an invoice factoring service.
Fill out our contact form, or call us at 855.465.4655 if you’d like to have a conversation about how our freight factoring can be beneficial to your trucking business. We look forward to hearing from you and helping you succeed.

The Benefits of Debt Factoring for Cash Flow

Cash flow is an ever-pressing matter for businesses. Payroll, taxes, operations, inventory, profits, and repairs depend on a healthy inflow and outflow of money from a company.

Unfortunately, maintaining a steady, positive cash flow is not always possible. Many industries, such as transportation, rely on the timeliness of their customers to fulfill invoices – and customers are not always prompt to pay. When invoices fall behind, and a company’s liquid assets begin diminishing, factoring is often considered.

Why do companies use factoring? Are there specific scenarios when factoring is a safe, healthy option for a faltering organization? In short, yes! In the content below, we define factoring and discuss three common circumstances that benefit from the unique financing solution.

How Does Factoring Work?

In the simplest terms, factoring is the process of purchasing unpaid invoices.

Traditional factoring includes a factor – such as our company – purchasing an unpaid invoice from a transportation company, putting cash in the hands of that company immediately. Once the customer pays the invoice, that money is given to us.

Many trucking companies wonder if they are liable to pay the invoice in the event that the customer never pays it. It depends! There are two main kinds of factoring, recourse and non-recourse, and both address this issue differently.

Recourse factoring places liability to repay the invoice in the hands of the trucking company. Non-recourse factoring assumes the responsibility of the invoice entirely. Thus, if the customer never pays back, the non-recourse factor takes the hit.

1. Factoring to Invest

Sometimes, the perfect investment opportunity appears out of thin air – right when your company does not have the financial freedom to jump on it. In other scenarios, investment opportunities are more deliberate. Perhaps you need to purchase a new fleet of vehicles or hire new employees.

Regardless of the venture, investments are designed to produce exponential growth in the future. However, they require a lump sum of money.

Small businesses and startups without a large customer base or steady cash flow often face this challenge: one must spend money to make money. When an opportunity presents itself, but your company is waiting on invoices to be paid, factoring is an immediate, safe solution.

2. Factoring to Repair

The importance of commercial truck maintenance cannot be overstated. Your fleet of trucks is crucial to a thriving company, and preventative maintenance plays a significant role in business growth and resource preservation.

Logistics companies often look to factoring to increase cash flow for truck maintenance. The truck driver can perform some maintenance before he or she begins transport. Other maintenance requires a professional. When something breaks down, a repair person should be alerted and hired to make necessary repairs.

Why would a transportation company require factoring to pay for repairs? Can truck repair wait for a brighter financial future? Most often, the answer is no. Truck maintenance should not be delayed.

We often list five arguments for the importance of truck maintenance:

– Fewer breakdowns. Proactive maintenance will help reduce the number of unexpected breakdowns – dramatically. When a truck breaks down, shipments fall behind and jobs are delayed. Ultimately, spending money for a repair will save on future disruptions.

– Fewer accidents. Fewer breakdowns mean fewer accidents. Working headlights, working brakes, etc. promote driver safety. When truckers are safe, other vehicle drivers are protected. The well-being of your employees is worth the investment of truck maintenance.

– Operational optimization. Maintained trucks work well! A fleet that is taken care of should operate at optimal functionality, lowering fuel expenses and lengthening the lifetime of your trucks.

– Happy customers. Smooth shipments, without unexpected breakdowns, often result in satisfied customers. Satisfied customers are often repeat customers.

– Legal requirements. Last, but certainly not least, the law requires commercial trucks to meet proper road safety standards. When a vehicle in your fleet needs to take a Commercial Vehicle Road Worthiness Test (CRVT), maintained trucks are likely to pass immediately.

3. Factoring for Payroll

Are you falling behind on payroll? Payroll factoring is an excellent resource for companies that care about the wellbeing of their employees but are experiencing an unexpected cash flow shortage. This can be all too familiar for businesses with many outstanding invoices.

Factoring as a Bank Loan Alternative: 3 Benefits

In the three scenarios explored above, a traditional bank loan could provide the funds needed to address investments, truck maintenance and repair, in payroll difficulties. However, some logistics companies do not qualify for traditional bank loans. Why? Qualifying for a bank loan often requires several qualifications, including excellent credit and experience. Some transportation companies simply do not have those two qualifications. Perhaps you have poor credit or have just started your business.

Additionally, factoring can serve as a traditional bank little alternative when a company needs cash flow fast. Traditional bank loans often take time to process. Factoring is fast. Some factoring companies can begin an agreement within a few days of application.

Finally, when you take a loan from the bank, you have to pay the bank back! Thus a traditional loan builds debt. For many transportation companies, debt should be avoided whenever possible. Factoring is a debt-free financing option.

Advanced Commercial Capital: Factors Who Care

In the modern-day, finding a financial organization that cares completely about its customers can be difficult. At Advanced Commercial Capital, we break this mold. We aim to serve our customers in every area.

How do we show this? Firstly, we offer non-recourse factoring services, meaning we assume the responsibility of our customers’ invoices – completely. Secondly, we do not require long-term contracts. Our goal is YOUR good, and we aim to demonstrate our value consistently.

If you are interested in discovering how factoring could impact the health of your transportation company, we would love to get in touch. Reach out to a team member at 855-465-4655 or complete our online contact form. We look forward to starting a conversation!

What is Freight Factoring & How Does it Work?

Freight factoring is one of the most readily utilized methods of financing in the logistics industry. Though popular, every business is unique: what works for one trucking company may not be the best option for yours.

How do you know if freight factoring is the right financing method for you? This blog is a great place to start! In the content below, we define freight factoring, answer financing method FAQs, and examine a few of the most compared financing methods.

What is Freight Factoring?

Freight factoring serves as a strategic collaboration between a factor and a trucking company, addressing the challenge of unpaid accounts receivables. When a trucking company faces outstanding invoices, the factor steps in, acquiring these receivables at a discounted rate. This prompt transaction injects much-needed cash directly into the hands of the trucking company.

The process is straightforward: the trucking company’s client fulfills the invoice, the freight factoring company is reimbursed in full. This relationship ensures that the wheels keep turning smoothly, with the trucking business enjoying a continuous cash flow.

The appeal of freight factoring is its flexibility and ability to meet various financial needs of trucking companies. Whether it’s seizing business opportunities, covering daily repairs and vehicle maintenance, managing payroll, or even fuel expenses, freight factoring proves to be a versatile solution.

The two primary methods of freight factoring are: recourse and nonrecourse factoring. These avenues offer trucking companies flexibility in choosing the model that aligns with their specific requirements. Whether opting for the added flexibility of recourse or the risk mitigation provided by nonrecourse factoring, trucking businesses can tailor their approach to suit their financial objectives.

In essence, freight factoring emerges as a dynamic financial strategy, ensuring a steady and increased cash flow for trucking companies. It’s not just a transaction; it’s a partnership that propels the trucking industry forward, providing the financial stability needed for growth and operational resilience.

How Does Freight Factoring Work?

A key benefit to freight factoring getting paid quickly, providing a boost for trucking businesses. The way this works is, trucking companies submit invoices for same-day processing, ensuring a steady cash flow to keep operations running smoothly.

This collaboration benefits everyone involved. Trucking companies enjoy speedy payments, avoiding the usual delays of traditional invoicing. Factoring companies make money by charging a percentage during the invoice purchase, which they earn when collecting from the customer. Customers can trust dealing with financially secure partners in the industry.

Here’s a quick overview of the process:

Application and Agreement:
• Trucking companies start by submitting an application. Once approved, a detailed factoring agreement is set up, covering rates and fees.

Load Booking and Submission:
• With approval, the trucking company books a load and submits essential documents, including a bill of lading and rate sheet, to the factoring company.

Advance and Payment Terms:
• The factoring company advances the invoice amount, deducting a predetermined fee based on agreed-upon payment terms.

Payment by Broker or Shipper:
• The final step involves the freight broker or shipper making payment to the factoring company within 30 to 90 days.

As part of the process, credit checks on clients help reduce risks, aiding trucking companies in choosing reliable partners. The choice between recourse and non-recourse factoring agreements adds flexibility, allowing businesses to tailor their approach based on specific needs.

In essence, freight factoring offers a straightforward solution for trucking businesses seeking immediate payments and financial stability.

Recourse Factoring

As the name implies, recourse factoring involves recourse. Recourse factoring companies require collateral. If a customer does not fulfill the invoice, the trucking company is then held responsible for repaying the purchased account receivable.

To help minimize risk, most recourse factoring companies only accept trucking companies with creditworthy clients. Even so, sometimes customers fail to pay completely, positioning the trucking company with the same cash flow concerns as before.

Why would a trucking company choose recourse freight factoring? Though recourse factoring is riskier than nonrecourse, companies with enough capital to repay for an unfulfilled accounts receivable may choose this option, because recourse factoring rates are often lower. However, not all trucking companies have the capital to take the risk.

Nonrecourse Factoring

Nonrecourse factoring does not involve recourse, therefore dropping the collateral requirement. Although the factoring rate is sometimes higher than recourse, the factoring company assumes all the risk of purchasing the account receivable. If a customer fails to pay their invoice, the factor absorbs the bad debt.

Small to-mid sized trucking companies often utilize nonrecourse factoring because of the security involved.

Freight Factoring FAQ

As a nonrecourse factoring company, we readily receive questions about freight factoring. Hopefully, we will address any concerns or questions you may have.

Who is Responsible if My Customers Don’t Pay?

As mentioned, this depends on the method of freight factoring. Recourse factoring places responsibility for unpaying customers in the hands of the trucking company, while nonrecourse factoring places responsibility on the factor.

At Advanced Commercial Capital, we have a nonrecourse program where we assume all risk on purchased invoices.

What is the Difference Between Factoring and Securitization?

Although there are multiple differences between factoring and securitization, the primary involves the number of individuals purchasing the receivables. Factoring involves a sale to a single factor, while securitization often includes multiple investors.

Who Receives the Payments From My Customers?

Once the factoring company purchases an invoice, the customer will pay the factor directly. Payments accidentally given to the trucking company should be immediately forwarded to the factor.

How Long Do I Have to Factor?

Although we cannot speak for all factoring companies, we strive for flexibility at Advanced Commercial Capital. Thus, our customers are not obligated to factor for a specific length of time, and there are no maximum or minimum number of invoices or dollar volumes needed to qualify for our factoring program.

How Quickly After Submitting an Invoice Can I Get Paid?

Once the invoice and all supporting documents have been received, the trucking company receives payment within one business day. In certain circumstances, quicker payment can be provided.

Freight Factoring vs Traditional Bank Loan

For some companies, a traditional bank loan may be a better financing method. However, we often encourage trucking companies in need of immediate cash flow to pursue freight factoring.

Consider these three elements:

• Firstly, bank loans can be challenging to acquire. Factoring companies consider the creditworthiness of a trucking company’s clients, while banks consider the creditworthiness of the trucking company itself. Thus, if a trucking company has bad credit, it will have a difficult (if not impossible) time pursuing a loan.

• Secondly, bank loans take time to receive. When a trucking company needs cash fast, factoring provides cash flow within a matter of days – sometimes sooner. The process of applying for and receiving a bank loan is much longer.

• Finally, factoring is flexible. Choose a trustworthy transporting company with no minimum volume requirements or long-term contracts. Your business can benefit from the financing as needed… and only as needed. Factoring offers a sense of financial freedom and flexibility that traditional bank loans cannot.

Advanced Commercial Capital: Trustworthy Freight Factoring

Still, have questions about freight factoring? Our team at Advanced Commercial Capital is ready to respond!

We provide cash flow for trucking companies with zero unpleasant surprises. Additionally, our program involves numerous benefits – from a free fuel discount card program to free credit checks – designed to help you be successful at your job while saving time and money.

Interested in pursuing freight factoring for your company? Give us a call at 855-465-4655 or complete our online contact form! A specialist will respond shortly.

What is Factoring?

Most businesses have experienced the frightening pressure of withering cash flow. Whether unexpected expenses appeared, your customers are refusing to pay, or a conglomeration of both circumstances, a multitude of situations can stunt cash flow. Of course, a business can only scrape by from reserves for so long – eventually cash flow is necessary to keep the business alive.

Sometimes, these frightening times coincide with growth opportunities! What should you do if you don’t have the capital to jump on expansion prospects (let alone pay for an equipment repair)? For many companies, financing is the best option. In the logistics industry, freight factoring is a common option.

In the content below, we define factoring and compare factoring with both forfaiting and traditional bank financing, offering insight into which is best for the long-term success of your business.

What is Factoring?

Factoring at its simplest definition is a method of financing, also known as accounts receivable financing or invoice factoring.

Trucking companies often approach freight factoring organizations with multiple unpaid invoices and cash flow needs. When a trucking company approaches the factoring organization, the factor will often purchase unpaid invoices from the company at a discounted rate. The factor will then pursue the client who needs to pay the invoice. Once the invoice is paid, the factor receives the money. Because the invoice was purchased at a discounted rate, the freight factor will come out net positive.

Freight factoring also benefits the trucking company. Waiting for customers to pay invoices can strangle cash flow, inhibiting companies from hiring drivers, repairing trucks, or taking advantage of growth opportunities. Factoring provides the company with immediate cash flow.

Unlike a traditional bank loan, factoring financing turnaround is extremely fast. Factoring companies choose to work with trucking organizations based on the credit history of the company’s clients, not on the credit history of the company itself. This allows for fast financing and higher acceptance rates. Using a factor provides quick cash access – even when banks aren’t willing to lend.

Recourse Factoring vs Non-Recourse Factoring

There are two distinct factoring methods, and both are important to understand when looking for the best factoring company for your needs: recourse factoring and non-recourse factoring.

Recourse factoring puts the responsibility of paying the invoices into the hands of the trucking company. For example, if the factor purchases three invoices and your customer does not pay them, you are responsible for fulfilling that debt. For leverage, the factor will often accept a deposit and hold it until the invoice is paid.

Alternatively, non-recourse factoring puts the responsibility of fulfilling the invoice into the hands of the factor. Once the factor purchases your invoice – typically at a discounted rate – the factor takes responsibility.

Even if the client does not pay, you are not liable for paying the factor or purchasing the invoice back. As you may assume, trucking companies often prefer this method! Non-recourse factoring is safe.

Factoring vs Other Financing Methods

Factoring vs Forfaiting

Forfaiting is another method of export financing. One small business resource writes: in the forfaiting scenario the “export sells its claim on medium and long-term trade receivables to a forfeiter at a discounted rate to receive fast access to cash.”

Because the trade receivables are sold at a discounted rate, the forfeit does not demand a reserve. The responsibility to pay the receivable is not on the importer. In this aspect, forfaiting resembles non-recourse factoring.

If both methods follow similar functions, how are they different?

Factoring and forfaiting have one major difference: factoring can be applied to international and domestic trade while forfaiting only applies to international trade.

Three additional distinctions between both financing methods include:

1. Timing: While factoring is typically applied to short-term accounts receivables, forfaiting involves long-term accounts.
2. Type of Goods: Factoring applies to any variety of normal goods; forfaiting applies to capital goods.
3. Process: Though both financing methods provide companies with fast cash, the processes differ slightly. As discussed earlier, factoring involves the factor of purchasing unpaid invoices from trucking companies at a discounted rate. In contrast, forfaiting involves the forfeiter purchasing rights of trade receivables from an exporter.

Factoring vs Traditional Bank Financing

A traditional bank loan works well for certain companies. However, for those who need cash fast without accruing additional debt, factoring is often the better option.

The lending market is simply not as fast or acceptant as factoring companies. If your trucking company does get approved, the loan is set and may not be enough to ease your financial strain. Additionally, you will eventually have to repay that debt. Factoring allows companies cash flow without strings attached – if you have an invoice to sell, you can earn immediate cash.

Advanced Commercial Capital: Freight Factoring Resource

Need a cash flow boost? At Advanced Commercial Capital, our non-recourse freight factoring service is as-needed and commitment-free. We give our customers zero unpleasant surprises, and therefore, we are the industry leader in factoring for trucking companies.

With over 100 years of combined experience, our team of financial experts has helped hundreds of struggling trucking companies with cash flow needs. We are ready to help your company succeed too.

Contact us for a freight factoring quote today! Give our team a call at 855-465-4655 or complete our online contact form.

Common Trucking Scams: Protect Yourself & Your Business

As the owner of a trucking company, you’re managing a large pool of drivers, customers, and loads. You already have a lot to handle, so the last thing you want to deal with are scam artists wanting to take advantage of your busy schedule. As with every other industry, no one is immune from becoming a target of a scam, no matter the size or value. Staying informed will keep you one step ahead of fraudulent practices and keep your company and employees safe. If you’re looking for more information here are five common trucking fraud scams to be aware of and how you can avoid becoming the victim of one.

Common Trucking Fraud Scams

Driver in Need: If you’re a company with an exceptionally large number of drivers, you may be a target of this type of scam. The fraudster will collect information from another driver by conversing with them or overhearing it from a truck stop and will use it to call dispatch to request a cash advance.

Phony Repair Shop or Fake Towing: Trucks commonly need to be repaired or even towed during service. The trucking company covers the expenses for repairs, and occasionally a scammer can exploit this by making false calls to a company asking for payment. The scammer provides vehicle information and a driver’s name and sometimes a fake invoice. The goal is to make the trucking company believe the load will be withheld from the driver until payment is received to get the company to pay up.

Fake Police Officer or Department of Transportation (DOT) Inspector: This act of trucking fraud involves a scammer posing as a fake government official. They will contact a trucking company to demand payment over a fake violation to get the truck back. You should also look out for notices in the mail asking for payment for renewal fees and threatening fines for missing the payment.

False Freight: This scheme happens when the driver is not allowed to supervise loading. Often the doors are sealed shut, preventing the driver from being able to ensure inventory counts, but is often still required to sign off on it anyway. Only when the delivery is complete do you realize the piece count is off and the scammers likely stole some of the freight.

Load or Fuel Advance Scams: A popular scam in the industry that targets brokers. Scammers steal the identity of a legitimate trucking company and book loads without any attention of picking them up. Instead, they request a cash advance for fuel and travel expenses. Once received, one of two things could happen. The scammer either disappears or more aggressively, holds the load hostage to demand further payment. Either way, the broker is left with money out of pocket and still in need of finding an actual driver to haul the load, if you’re lucky enough to still have it.

Double Brokering: Although this act entirely involves legitimate parties, you want to make sure you do not become a victim of this, and it’s another one that focuses on brokers. This time it occurs when a broker books a load for a carrier, but in turn that carrier brokers the load to a third party without the consent of the original broker or customer. In this case, the actual carrier of the freight is not under the original contract and therefore is uninsured. If the company that booked the third party does not pay the carrier who moved the load, then the original broker could possibly be on the hook for both payments.

How to Avoid Trucking Fraud

As it happens, you already took the first step of avoiding trucking fraud by reading about common scams. Knowing how to identify scams as they occur will stop you from making a mistake.

Here are a few pieces of advice to follow as well:

• Train drivers to not divulge important information in public and to always be aware of their surroundings.
• Request an invoice, and if actually provided one, review it carefully. If no valid address or phone number can be found,
• Find ways to validate the carrier or service provider. Always speak with the driver directly to confirm they are who they say they are. Try asking for information not readily visible on the truck such as the DOT number or employee ID number.
• Directly transfer funds to the driver, not a provider. Don’t risk sending payment to an unknown third party. Also, it’s best practice not to issue fuel advances to a new carrier you haven’t worked with before. Wait until they establish trust by successfully delivering a couple of loads before granting permission to receive cash advances.
• Always be suspicious if someone is pressuring you for immediate payment. Ask yourself if the situation urgently requires you to do so. If absolutely necessary, then just issue a smaller percentage of the cash advance instead of the full amount.

Advanced Commercial Capital: An Industry Resource

Advanced Commercial Capital is here to help the freight industry continue to grow with confidence. We’re in the business of helping your business grow through fair and honest invoice factoring. We protect our clients from unpaid freight invoices due to fraud, bankruptcy, or delinquency, without any surprises. To learn more or go get in touch with our team, call our office at 855.465.4655 or fill out our online contact form today.

What is Invoice Factoring?

A very happy supply chain worker ready to talk answer
Even when your business gets everything done on time, sometimes the favor isn’t returned. When starting a new business, you put forth the effort to complete any measures that set you up for success, rewarding you with your first customers. However, in the business-to-business industry, there are some things that are beyond your control. B2B companies rely on another business’ ability to pay their invoice on time so you can continue to pay for the things your business needs to stay afloat. Even when you provide exceptional, timely services or delivery of products, you may find the delivery of money isn’t as punctual. This is where factoring comes in. Understanding factoring in business might make all the difference when it comes to getting your business off the ground. Read more to find out what factoring is and how it can help your new or growing business.

What is Invoice Factoring?

Factoring works differently from bank loans in many ways. Factoring companies buy invoices from your business, so you get your cash upfront right away. The factoring company in turn collects the invoice once paid by the client and claims a small percentage. Businesses starting out with low cash flow use factoring companies to help pay for necessary expenditures while waiting for payments from their customers. Companies that also experience slow business during certain times of the year, or companies dealing with exponential growth can also take advantage of factoring where an advance is needed.

With factoring, you are not borrowing from anyone, taking out a loan, or putting yourself into any debt. Instead, you are simply given your own money in advance. Approval is given much quicker than a bank since there are no contracts or debts involved. This way cash is given quickly, usually within a day or two so you can take care of important expenses almost immediately.

How Can Factoring Benefit My Business?

Factoring is a great way to help both businesses that are starting out and businesses that cannot keep up with their growth. When you need cash now, that is when you can turn to factoring companies. Late payments from customers cause cash flow shortages, limiting your ability to pay for necessary expenditures like utilities and salaries, and capping your chance of growth. Even when your business has high revenue, you still might not be seeing your cash right away. While using invoice factoring, you can pay off all your bills on time and improve your credit score, allowing for chances of larger investments or loans in the future.

Business loan approval can take months to process and require you to pay back much more in interest, and this is all assuming you are able to qualify for one right away. Factoring is the ideal short-term solution for your business to get the capital needed quickly since approval is much more achievable, and in fact is more dependent on your customers’ financial situation rather than your business’.

While there are fees involved with factoring, there is a chance to save money by reducing time and money spent on administration tasks associated with invoice collections. Factoring companies will handle collecting paid invoices from your customers. You may be able to eliminate the need for an administrative assistant, or at the very least free up more time for your employees.

What is Factoring in Business?

Factoring companies are more concerned about your client’s financial situation than yours. They buy your invoices, so in order to pay them back, you need the client to pay your invoice. You may need to confirm your customers’ payment history to establish credibility to get more capital upfront.

It’s wise to keep in mind that once a factoring company purchases your invoice, you will need to pay it back regardless of whether or not the invoice is paid. This could potentially result in a double loss, putting you in a similar spot to where you started. Factoring is a quick solution, but one that requires some diligence. Look into non-recourse factoring which places the responsibility on the factoring company, where they will suffer the loss from an unpaid invoice instead of your business.

Factoring is a one-time transaction to draw from whenever you need it. It is not reoccurring funding or a contractual agreement. However, this gives you the power to create capital from the beginning or as needed, without any obligations. Either way, factoring can be a great short-term or long-term solution.

Advanced Commercial Capital: Risk-Free Debt Factoring

With Advanced Commercial Capital, your trucking business assumes very few risks! Because of the unique nature of our non-recourse freight factoring service, there are no consequences to you if your clients fail to pay their invoices. We also do not require any long-term contracts and do not charge termination fees.

Additionally, we offer:

• Fast and flexible funding options, paying you in as little as one hour for your freight bills
• Strong relationships that foster your success
• And valuable benefits that save you both time and money, from our free fuel discount card program to free credit checks
All of these are just some of the reasons why our clients choose to stay with us for the long haul.
Advanced Commercial Capital can help your trucking company succeed in ways you never thought were possible.
Talk with our team to learn more about how non-recourse debt factoring works by giving us a call at 855.465.4655 or reaching out via our online contact form. We look forward to offering you the easiest and smartest way to factor your freight bills and get the cash you need, without any surprises.

Invoice Factoring Companies for Trucking

In B2B industries, such as logistics, the financial stability of one company often depends on the initiative of another to pay their invoice. When customers are late to pay, cash flow suffers, and essential expenditures – such as maintaining salaries and important equipment – are hindered.

In these cases, trucking companies often look for financial assistance elsewhere, such as a bank loan or invoice factoring. When cash flow is hurting and you need a reliable push to stabilize your business, invoice factoring is often the best option.

In the content below, we define invoice factoring, explore how the financing option works, and dive into the pros and cons for trucking companies!

What is Invoice Factoring?

Invoice factoring is the process of turning unpaid customer invoices into immediate cash. Once the invoice is officially paid, the seller reimburses the factoring company.

How Does Invoice Factoring Work?

Invoice factoring is a simple process. Invoices are sold to a factoring company for a discounted rate or factoring fee, putting working capital into the hands of the company at the needed time. Once the invoice is paid, the factoring company is reimbursed.

For example:

• Trucking Company A has an unpaid invoice of $1,000.
• Trucking Company A sells the invoice to a factoring company for a 5% fee of $50.
• Trucking Company A receives $950.
• When Company A’s customer pays the invoice, the factoring company receives $1,000.

While exploring invoice factoring options, two variations of invoice factoring should be considered: recourse and non-recourse.

Recourse Factoring

Recourse factoring places the responsibility of collection on the invoice seller (i.e. your trucking company). This means collateral is required. In many cases, recourse factoring companies use your receivables as such. Recourse factoring mimics the process of invoice factoring, and in turn, your company receives immediate cash for unpaid invoices. However, if the customer neglects to pay the invoice, the factoring company may collect the money from you.

As the seller, you are solely responsible for the invoices purchased by the factor and will be responsible for refunding the factor whether your customer comes through or not.

If the customer never pays your invoice, you are left in a similar position as when you first sold the invoice – in need of cash. Because of the risk associated with recourse factoring, businesses often prefer non-recourse factoring.

Non-Recourse Factoring

Non-recourse factoring places the responsibility of collection on the factor. If the customer does not pay, the non-recourse factoring company suffers the loss.

Additionally, this form of factoring does not demand collateral.

Is Invoice Factoring Right for My Trucking Company?

Invoice factoring is often utilized by businesses who work for other businesses – a customer base that doesn’t always pay on time. However, payment procrastination can hurt an organization with employees to pay, equipment to maintain, and growth opportunities to pursue.

For trucking companies, a stagnate cash flow could cripple the business. Although cash flow is important, invoice factoring might not be right for every trucking company. Consider the following questions:

1. Is your cash flow hurting?
2. Are you looking for growth opportunities, such as purchasing trucks or hiring employees?
3. Are you looking for a fast way to stabilize your business?

If you answered “yes” to any of the above questions, invoice factoring could be an excellent choice for your trucking company!

Invoice Factoring Pros

– Invoice factoring is an excellent option for trucking companies working for other businesses, especially those that procrastinate payments.
– As already mentioned, invoice factoring provides trucking companies with fast cash, improving cash flow immediately.
– Invoice factoring is easy to be approved for.
– Non-recourse invoice factoring is collateral-free.

Invoice Factoring Cons

– If working with a recourse factoring company, you may be required to buy back unpaid invoices.
– If your company works directly for consumers, invoice factoring may not be a viable option.
– Certain factoring companies tack on hidden fees to the factoring services, such as late fees or processing fees. Be certain to select a trustworthy factoring company and understand all the terms and conditions before moving forward!
– Because invoice factoring approval is based on the credit history of your customers, you don’t have full control of approval – it depends on the financial strength of your clients.

Is Invoice Factoring Different from Invoice Financing?

Invoice financing resembles recourse factoring, detailed above.

One financial resource states: “Instead of selling your invoices to a factoring company, you use the invoices as collateral to get a cash advance and you remain responsible for collecting payment on the invoices.”

Why Don’t I Just Get a Bank Loan?

Invoice factoring delivers almost immediate approval. With the right freight factoring company, you could get paid within three days. On the other hand, applying for and receiving a traditional loan could take weeks, if your company is approved.

Approval for factoring funding and loan funding differs significantly. For example, banks consider your creditworthiness and the ability to afford payments, while most invoice factoring companies consider the creditworthiness of your customers.

Often, factoring companies take business values into consideration as well. Is your trucking company well-managed and known for integrity? You’re likely to be approved for invoice factoring within a matter of days, regardless of credit history.

Advanced Commercial Capital: Trustworthy Non-Recourse Factoring

At Advanced Commercial Capital, we pride ourselves in being an honest, trustworthy non-recourse factoring solution for trucking companies in need of financial stability.

Our team would love to get in touch with your organization. To learn more about what we do, give us a call at 435.673.4655 or complete our online contact form!

How Does Debt Factoring Improve Cash Flow?

Your trucking company is doing everything it can to succeed. Shipments are arriving on time and business is booming. The only problem is your clients are not paying their invoices in a timely manner.

An important part of any business, cash flow in the trucking industry can be sporadic and unpredictable, even at the best of times. Fortunately, debt factoring can help trucking companies maintain consistent cash flow via immediate payments. Below, we will consider the basics of how debt factoring can work for your company.

Will It Improve Your Cash Flow?

Even though it is often referred to as debt factoring, factoring does not involve taking on debt, but rather involves selling an asset you already own. Debt factoring is the process by which a third-party factoring company purchases either a portion or all your company’s invoices. Once an agreement is reached, the factoring company advances you an agreed-upon amount. As a result, you do not have to rely on customers paying their invoices immediately for your business to run smoothly.

Why Would a Business Use a Factoring Company?

There are several advantages to the debt factoring system. Chief among them are the following:

1. Debt factoring provides a quick infusion of cash, allowing for steady company growth – even when invoices are unpredictable. Many businesses struggle to maintain a steady cash flow. In turn, this often prevents them from growing and thriving. Due to the relatively immediate nature of debt factoring, once your invoices are purchased, you can expect a quick and reliable influx of cash to help your business continue to thrive.

2. Debt factoring saves time and administrative resources, including overhead costs. When you sell your outstanding invoices to a factoring company, that company takes over the management of your invoices. Because they are handling customer payments and debt collections, you do not have to pay an employee to handle this task, saving you time, administrative resources, and the overhead cost of an extra employee.

3. Non-recourse factoring helps work against accumulating debt. Non-recourse factoring is a type of debt factoring that protects you from accruing debt if your clients do not pay. For example, if a shipper were not to pay the invoice that you sent them after providing your services, you would not be on the hook for paying back the factoring company under a non-recourse factoring system.

What Are the Different Types of Debt Factoring?

We previously mentioned the benefits of non-recourse factoring. However, it is important to note that non-recourse factoring is not the only type of factoring available. Some companies may use a type of factoring known as recourse. The difference between this type of factoring and non-recourse lies in the risk placed upon you and your business.

Recourse factoring puts your company on the hook for customers who do not pay their invoices. By requiring additional collateral in addition to your invoices, the factoring company has the right to collect money for the unpaid invoice directly from you. Typically, companies that use this type of factoring hold some of your money in reserve.

In a non-recourse factoring agreement, the factoring company fully assumes the risk. Accordingly, if the freight broker or shipper does not pay their invoice, the factoring company suffers the loss. Generally, non-recourse factoring companies do not hold any of your money in reserve, as there is no need to do so.

Advanced Commercial Capital: Risk-Free Debt Factoring

With Advanced Commercial Capital, your trucking company assumes very few risks! Because of the unique nature of our non-recourse freight factoring service, there are no consequences to you if your clients fail to pay their invoices. We also do not require any long-term contracts and do not charge termination fees.

Additionally, we offer:
• Fast and flexible funding options, paying you in as little as one hour for your freight bills
• Strong relationships that foster your success
• And valuable benefits that save you both time and money, from our free fuel discount card program to free credit checks

All of these are just some of the reasons why our clients choose to stay with us for the long haul.
Advanced Commercial Capital can help your trucking company succeed in ways you never thought were possible.

Talk with our team to learn more about how non-recourse debt factoring works by giving us a call at 855.465.4655 or reaching out via our online contact form. We look forward to offering you the easiest and smartest way to factor your freight bills and get the cash you need, without any surprises.

Invoice Factoring Rates: A Complete Guide

Are you considering going into business with a factoring company, but still need some answers before doing so? What kind of risks are involved? When can you expect to receive your funds? How much do freight factoring companies charge? In this article, we will address the determining components of how much freight factoring companies charge, including common pricing, special fees, and more to help get you jumpstarted on the basics.

Common Pricing & Fees

What Is a Factoring Fee?

Factoring fees are the initial percentage of the invoice taken by the factoring company. While they can vary depending on the company you work with, a good rule of thumb is to gauge anywhere between 2-4%. If it is much higher than this, you should know that better options exist, and you may be working with the wrong factoring company.

One exception to this rule may come from non-recourse factoring plans. Because non-recourse factoring poses more of a risk to the factoring company, the costs may be slightly higher. In this scenario, most companies start their factoring fee around 5% for non-recourse factoring and can go as high as 8%.

Monthly Volumes

Some factoring companies also require carriers to meet certain benchmarks known as “monthly volumes.” This term means that your shipping company must factor in a certain amount of loads each month or risk an additional charge. The form this fee takes could either be a single flat fee, or an increase in the factoring fee percentage. In either case, it is important to have a conversation with your factoring company about what their monthly volume requirements are if any, and what the penalty may be.

Reserve Rate

For factoring companies that use a recourse factoring structure, a deposit will be kept on hold as a form of insurance against delinquent payments. Again, the amount can differ between companies, but usually, it is returned to the carrier whenever the factoring company receives their payment.

Invoice Factoring Rates for Companies: What to Look For

Typically, factoring companies in the trucking industry offer a flat fee structure. This system means that you pay a one-time fee that remains the same, no matter how long it takes your customers to pay their invoices.

However, some companies will calculate their invoice factoring rates using a variable structure. As previously discussed, most companies will take a small percentage (2-3%) of the invoice for as long as the invoice goes unpaid. However, an added caveat to this structure could be that the longer the customer takes to pay their invoice, the more you will pay in fees.

For example, your factoring company may charge you 3% for the first 30 days. For every two weeks that pass after those 30 days in which the invoice balance is left unpaid, the factoring company will charge an extra 0.5%. Make sure you are working with reputable clients who will pay their bills on time to avoid such an issue.

What About Long-Term Contracts?

Some factoring companies require you to sign contracts that bind you to work exclusively with them for long periods. However, this is not true of all factoring companies in the industry. If it is important for you not to be tied to one factoring company for the long term, there are options out there for you.

How Does Advanced Commercial Capital Compare?

At Advanced Commercial Capital, we understand that our mission is to help your trucking business succeed. That is why we do everything in our power to offer you the best deals and earn your business every day.

Advanced Commercial Capital has one of the most competitive non-recourse factoring rates in the industry, no long-term contracts, and no set-up or termination fees. We know that making a significant change to your business model is stressful enough, and we do not want to charge you for doing so.

If you decide that factoring is not for you, our Freedom Back Guarantee allows you to leave at any time. While not every factoring company offers this guarantee, not every factoring company cares about the wellbeing of its customers like Advanced Commercial Capital does.

Fill out our contact form, or call us at 855.465.4655 if you’d like to have a conversation about how our freight factoring can be beneficial to your trucking business. We look forward to hearing from you and helping you succeed.

Resources:

https://www.invoicefactoring.com/factoring-blog/factoring101/much-invoice-factoring-cost

https://www.factorfinders.com/cost-of-factoring#:~:text=A%20factoring%20company%20may%20charge,fee%20is%20charged%20up%20front.

https://www.getinstapay.com/blog/common-freight-factoring-fees