In a perfect world, no organization would be in a situation where they need access to cash flow to cover their payroll expenses before their own accounts receivable come in. Unfortunately, we don’t live in a perfect world.

Oftentimes, circumstances beyond your control get in the way. Maybe there was a situation where a job didn’t go as expected. Maybe a client is taking too long to pay for their own reasons. Regardless, payroll funding in freight is there to meet your needs so that you can meet your obligations, no matter what.

What is Payroll Funding?

As stated, payroll funding is a type of service that offers companies immediate cash flow to cover payroll expenses as needed. Think of it as a type of short-term financing designed to make sure you’re able to meet your obligations to keep your business moving forward, regardless of what life happens to throw at you.

How Does Payroll Funding Work in Freight?

When you work with a payroll funding provider, the first thing you do is submit the outstanding invoices that you have to your partner of choice. These are invoices for work that you’ve already performed and are awaiting payment from clients, or that are a part of a similar situation.

Your payroll funding partner will then provide you with a percentage of the invoice value in advance. This can be a way to cover not only your payroll needs but other operating costs as well.

When the client pays the invoice, the payment is not directed to your business, but to the payroll funding provider.

At that point, everything can be reconciled, and you can keep things running smoothly. Typically, any fees that you are assessed are calculated based on the amount of the outstanding invoices.

Advantages of Payroll Funding

For smaller organizations in particular, the biggest advantage of payroll funding comes by way of immediate access to cash flow. Payroll obligations don’t wait just because a sudden winter storm hit your area, causing a delay in work. With payroll funding, you can meet your obligations while still giving your clients the time they need to meet theirs.

Flexibility is another major advantage of payroll funding, as it’s an easy way to adapt to ever-changing business conditions. Payroll funding isn’t something you’ll need to leverage every month, or even regularly. But when the need does arise for whatever reason, it’s always an option worth exploring.

This can also lead directly to one of the long-term benefits of payroll funding: superior business growth. With your own cash flow free, you can now invest in other areas of the organization where that money can make the most impact. It can be a way to purchase new equipment, or even to expand your fleet. The point is, that you can suddenly take advantage of opportunities as they arise instead of watching them pass you by.

Another long-term benefit comes by way of the credit improvement your business will often enjoy. Payroll funding is a way to demonstrate that you’re able to reliably keep track of your financial obligations. The longer you’re able to do that, the better your credit rating is – leading to better opportunities as a result.

Disadvantages of Payroll Funding

Of course, none of that is to say that payroll funding in freight is the perfect solution for every business. As always, you need to consider your specific needs when making a decision – especially regarding financial matters.

When you participate in payroll funding, you’ll always have a certain level of dependence on the provider you’ve selected. That’s why it’s so critical to do your due diligence ahead of time to make sure that you’re finding a partner that will operate with your best interest at heart.

Payroll funding is not free, and some companies may have an issue dealing with the long-term costs. But again – this is not something that is intended to be used on anything other than an as-needed basis. If you find that you need payroll funding often enough to where the costs are eating into your ability to function, you likely have issues elsewhere that you’ll want to investigate.

How to Qualify for Payroll Financing

Qualifying for payroll funding is ultimately a straightforward process that isn’t that different from applying for something like a loan.

You’ll need to provide documentation that your business is in sound working order, for example. That includes business licenses, financial statements, proof of outstanding invoices, and more. Your creditworthiness will also be assessed during this time.

The quality of the invoices you’re submitting will also need to be of a certain record. If the invoices you’re submitting are from clients who have an established history of not paying in full, the chances are slim that a payroll funding provider will want to take on that risk.

What to Look for in a Reliable Payroll Fund Provider

When looking for a payroll funding provider, the first thing you’ll want to research is a company’s reputation. Read reviews and, if you can, speak to past clients to make sure you’re finding an organization that you’re comfortable with.

You’ll also want to compare providers in terms of fees, interest rates, and the other elements that go into their terms of service. This is absolutely one of those situations where you need to prioritize transparency above all else.

Customer service is also critical. If you have an issue, you want to make sure that you’re never more than a phone call away from someone who will be able to help.

Finally, you’ll want to look at the speed at which funding will be available to you. Part of the appeal of payroll funding is that it is a fast way to access the cash flow needed to meet your obligations. If a provider isn’t offering the “fast” part of that agreement, you’ll probably be better served elsewhere.

Do You Need Payroll Funding?

Ultimately, the decision of whether you need payroll funding in freight is yours alone to make. If there are other ways to get the money you need with more favorable terms and conditions, you are encouraged to explore them. But for many, payroll funding is a perfect way to meet their obligations, accelerate business growth, and enable financial stability – all at the same time.

If you’d like to find out more information about payroll funding, or if you’d just like to discuss your own needs with a team of passionate and dedicated professionals in a bit more detail, please reach out to the team at Advanced Commercial Capital today.

If you had to make a list of all the professions that are critically important to the United States economy, truck drivers would undoubtedly be right at the top.

Without truck drivers, there would be no supply chain. Essential goods and other items would be unable to make their way across the country, getting into the hands of the people who need them to make the products that will eventually be passed onto consumers.

But as is true in so many other industries, truck drivers are facing a massive shortage that is poised to get worse before it gets better. According to one recent study, about 87% of companies around the world either already have a skills gap that they’re dealing with, or expect to have one within the next few years.

Truck drivers are no different, creating a situation that we would all do well to take seriously while we still have the chance.

Why is There a Truck Driver Shortage in 2024?

The truck driver shortage as it exists in 2024 is actually a long time coming. In 2005, for example, there were an estimated 20,000 positions across the industry that professionals were unable to fill. By 2018, that number had grown to an enormous 60,800 with no end in sight.

As is true with a lot of different industries, there’s no single reason you can point to to explain the truck driver shortage. To fully understand it, you need to view several issues in the context of not only where the industry was and is, but where it is likely headed over the course of the next decade.

Unsafe Working Conditions and Lifestyle Challenges

One of the major reasons why it’s so difficult to find enough people to address the truck driver shortage has to do with lifestyle challenges. Many younger people in particular are taking an increased interest in their health and physical fitness. It’s difficult to argue with a straight face that sitting behind the wheel of a car for eight hours a day on a heavily restricted diet is the healthiest choice you can make.

Unsafe working conditions are also a topic of discussion around the country. Truck drivers can only be behind that wheel for a certain length of time because it’s literally dangerous for them to exceed it. Also, keep in mind that the weather is making things more dangerous in various places. Increasing temperatures and pressure changes have contributed to storms that are so damaging it is almost unheard of.

Unbalanced Pay Scales

Despite how important truck drivers are and how dangerous their profession actually is, many are dealing with unbalanced pay scales – an issue that is certainly not making things look any more attractive to prospects.

According to one recent study conducted by the Bureau of Labor Statistics, the median pay for a truck driver was $49,920 in 2022. To put that into perspective, that works out to be about $24 per hour. There are a lot of other professions that you could explore, even with a limited educational background, and still make comparable wages to most entry-level truck driving positions in particular pay.

Poor Benefits

Along the same lines, you have to consider the high cost of living associated with constantly being on the road. You’re incredibly limited in terms of where you can purchase food from, often being forced to deal with expensive prices at truck stops.

This can often make it hard for truck drivers to establish any kind of financial safety net. When you’re also operating as an independent contractor in many situations, enjoying any type of benefits at all is a responsibility that falls exclusively to you.

Less Interest From Younger Workers

One of the major factors that is exacerbating the truck driver shortage has to do with reduced interest from younger workers, particularly when it comes to long-haul projects.

It’s one thing to try to get someone interested in a job that will see them driving a large vehicle around for hours at a time every day. It’s another thing entirely to convince them that they should take days or even weeks away from their families, even if you’re able to address the pay discrepancies outlined above.

Because of this, many carriers are working hard to try to make their driver schedules as flexible as possible. Long-haul trucking is just as essential as it ever was, but many providers are trying to get their truckers home as often as possible so that they can raise a family and maintain a healthy work/life balance.

How Does This Shortage Affect Factoring?

If anything, the truck driver shortage makes factoring even more important because labor shortages mean invoices will likely take longer to get paid. This can cause you to not have critical funds when you need them, forcing you to let opportunities for growth and other success pass you by.

How Trucking Companies are Combatting the Trucker Shortage

One of the biggest ways in which trucking companies are combatting the trucker shortage involves increased pay and benefits. This is creating a ripple effect in that not only does better pay attract more drivers, but better benefits also help with retention as well. A higher base pay won’t entirely solve the problem, but it will make sure companies are headed in the right direction.

Enhanced training programs can relieve pressure in other areas, too. Not only does this help reduce the number of unqualified drivers you’re dealing with, but it can also make sure they have the knowledge needed to operate as safely as possible while on the open road.

Technology and automation are also regularly being employed, not to replace human truck driver jobs but to support and empower them. The more a company uses automation, the more often a truck driver can be home with his or her family – precisely the way it should be.

Factoring Made Easy with Advanced Commercial Capital

At Advanced Commercial Capital, we understand how important it is to keep money coming in the door of your trucking company. This is especially true when you’re dealing with supply chain disruptions and other elements like the uncertain economic times we’re all living in.

That’s why we want to make factoring as easy as possible, all so that you can worry less about getting paid and more about attracting the talent you need to run the most successful business you can.

If you’d like to find out more information about how the truck driver shortage impacts factoring and other aspects of the industry, or if you’d just like to talk to someone about your own needs in a bit more detail, please don’t hesitate to contact the Advanced Commercial Capital team today.

Understanding Freight Class

What Is Freight Class?

Every type of product that a business ships is associated with a National Motor Freight Classification. This in turn relates to a precise freight class number, which typically ranges from 60 to 400. In addition to making sure that all organizations are paying correctly for the actual items they’re shipping, this also helps to avoid the wasting of time, money, and other resources throughout the logistics pipeline.

Why Is It Important?

Freight classes are determined by the National Motor Freight Traffic Association, otherwise known as the NMFTA for short. Because of this standardized measurement, it is possible to have standard pricing across all LTL freight carriers and businesses, dramatically simplifying the process and making it more cost-effective.

LTL Shipping and Metrics

Special Features of LTL

Short for “less-than-truckload,” LTL shipping does not require a business to fill an entire trailer for shipping. Instead, they’re sharing that space with multiple other organizations, thus only paying for the exact amount of space they need to use.

The major difference between this and other types of shipping is that LTL uses a “hub and spoke” shipping model. Instead of shipping items directly from an origin to a destination, LTL loads may go through various distribution centers for unloading, consolidation, and more before final delivery.

Determining Transport Metrics

Carefully figuring out transport details is crucial for improving operations. This process involves identifying and analyzing various key performance indicators (KPIs) to gain insights into the overall performance of a transportation network. Metrics such as travel time, vehicle speed, congestion levels, and reliability play a pivotal role in assessing the effectiveness of a transportation system. By using technologies like GPS and sensors, transportation engineers, urban planners, data analysts, and other stakeholders can collect information in real-time to see what’s going well and where they can improve operations. Analyzing these details helps improve transportation and allows for the development of plans to make it work even better in the future.

Factors for Freight Class

Density

One of the most important factors that determines freight class, beyond the actual commodity being shipped, is density. Take the total cubic feet of the items being shipped and divide by their total weight. The lower the density, the higher the freight class.

Handling, Liability, Stowability

The term “handling” refers to how easy something is to transport. Items that are oddly shaped, hazardous, fragile, or extremely heavy would require special handling and thus additional fees.

Liability relates to how likely an item is to get damaged or stolen in transit. Likewise, it has to do with how likely an item is to damage other items during shipment. The higher the liability, the more you will pay.

Finally, stowability assumes that, provided it has been packaged properly, freight should be easy to stow during transportation. This includes not only in trucks but on trains, boats, and even planes. If a shipment is particularly difficult to load and stow or if certain precautions must be taken, it will usually correspond with a higher freight class.

Calculating Freight Density

Step-by-Step Guide

First, measure the length, width, and height of the shipment in question. Be sure to include all pallets and other packaging materials.

Multiply the height, width, and length measurements together. The number you get is the total cubic inches of the shipment. Divide that number by 1728 to convert it to cubic feet.

Next, find the weight of your shipment, which should be measured in pounds. Once identified, divide the weight by the cubic feet. This will give you the number of pounds per cubic foot, which is otherwise known as density.

At that point, all you have to do is look at the appropriate freight class chart to find the freight class for your shipment.

Freight Class Codes

Classes and Chart

Remember that freight classes are an industry standard, so any freight class chart you look at should contain the same information. If your freight class code is 60, for example, you’re likely shipping something along the lines of car parts or other accessories. A freight class code of 77.5 usually equates to items like tires and bathroom fixtures. A freight class code of 92.5 refers to computers, monitors, refrigerators, and similar large, fragile items.

3PLs and Freight Class

Some third party logistics providers may have their own specific guidelines that you must use when determining freight class. So long as you have measured all your shipments appropriately, this should not be difficult to determine. You’ll still have accurate data to work from when determining which class you fall into (and what rate you will pay), even if the price is ultimately different from what is considered an industry standard.

Optimizing Density

The number one way to optimize the density of your shipments is to make use of every last inch of space available to you. This is why a lot of businesses invest in custom shipping materials that leave little to no wasted space in a box. Doing so may cost a bit more upfront as opposed to using “one size fits all” materials, but it can save you quite a bit of money on logistics costs in the long run.

In other words, there should be as little empty space in a box or package as possible. If you have to, use airbags or bubble wrap to fill in those gaps. This will help provide a cushion to the goods being shipped without adding too much in additional weight.

Speaking of dimensions, you’ll also want to make sure that you’re measuring your shipments as accurately as possible. Even a height that is off by a few inches or a weight that is off by a few pounds can make a major difference in terms of how much you think the load weighs, which will impact density and how much you’ll pay as a result.

Finally, make sure that all shipments are loaded and secured as carefully as possible. Boxes that are shaped similarly should all be grouped together to maximize how much you can fit on a pallet. Heavier items should always be at the bottom to create a stable foundation. Everything needs to be secured in place using plastic wrap to prevent the weight from shifting. The tighter you can pack everything, the more accurately you’ll be able to measure — and the more you’ll save on shipping as well.

If you’d like to find out more information about how to calculate and determine freight class, or if you have any additional questions that you’d like to go over with someone in a bit more detail, please feel free to contact Advanced Commercial Capital today.

When you factor your invoices, you are essentially selling them to the factoring company. The factoring company then collects the payment from your customer on your behalf. In order for the factoring company to have the legal right to collect payment from your customer, you will need to sign a notice of assignment.

A notice of assignment in trucking is a document that assigns the right to collect payment on an invoice to the factoring company. The notice of assignment also assigns the right to receive any future payments on the invoice to the factoring company.

Why is a Notice of Assignment Important?

A notice of assignment in trucking is important because it protects the factor’s (or the organization to which the receivables have been assigned) interest in the receivables. The notice of assignment also allows the factor to perfect its security interest in the receivables, and provides notice to the debtor that the receivables have been assigned and that payments should be made to the factor.
Another reason why a notice of assignment is important is that it allows the factor to take action against the debtor in the event of a default on the receivables. Without a notice of assignment, the factor would not have any legal recourse against the debtor.

The notice of assignment also helps introduce the factoring company to the debtor. This is because the debtor will now be dealing with the factoring company instead of the business that assigned the receivables.

What is Covered in a Notice of Assignment?

When a trucking company factors their receivables, they are selling their invoices to a factoring company at a discount in order to receive immediate cash. The factoring company then becomes the receivable’s owner and has the right to collect payment from the debtor. In order to protect their investment, the factoring company will send a notice of assignment to the debtor, informing them that they now owe payment to the factoring company, not the trucking company.

The notice of assignment usually includes the following information:

-The name and contact information of the factoring company
-The name and contact information of the trucking company
-The invoice number or numbers that have been assigned to the factoring company
-The amount of the invoice or invoices that have been assigned
-The due date or dates of the invoice or invoices
-The name and contact information of the debtor
-A statement informing the debtor that they now owe payment to the factoring company instead of the trucking company
-The factoring company’s terms and conditions for payment as well as payment details

Sending a notice of assignment to the debtor protects the factoring company’s investment and ensures that they will be paid for the invoices that they have purchased. It also allows the trucking company to focus on its business instead of chasing down payments from debtors.

Notice of Assignment Examples

It is common for businesses in the trucking industry to use factoring as a way to finance their operations. In order to secure funding, companies will often sign over their accounts receivable to the factor. This means that the factor has the right to collect payments on behalf of the company. When this occurs, the factor will typically send a notice of assignment to the company’s customers.

The notice of assignment informs the customer that the invoice has been assigned to the factor and provides instructions on how to make payment. It is important to include all relevant information in the notice, such as the amount owed, the due date, and the mailing address or website where payment should be sent.

Below is an example of a notice of assignment that a company might send to its customers:

Date

Customer LLC

123 Main Street

Suite 200

Anytown, USA 99999

Dear Sir/Madam

RE NOTICE OF ASSIGNMENT.

Dear Customer,

We are writing to inform you that your invoice number 12345 has been assigned to ABC Factoring Company. Please remit payment for the invoice in full to ABC Factoring Company at the following address:

ABC Factoring Company

123 Main Street

Suite 200

Anytown, USA 99999

You can also make payments online at www.abcfactoring.com. Please be sure to reference your invoice number when making a payment. Kindly note you are liable for any misdirected payment, and as such we strongly advise you to take note of the change in payment details.

If you have any questions, please contact our office at 555-555-1234.

Thank you for your prompt attention to this matter.

Sincerely,

Your Company Name

An example of a notice of assignment sent by a factoring company to the debtors:

Date

Customer LLC

123 Main Street

Suite 200

Anytown, USA 99999

Dear Debtor,

RE NOTICE OF ASSIGNMENT.

According to the agreement between your company and our client – the Assignor – we hereby inform you that all the Assignor’s rights, title and interest in the account receivable described below were assigned and transferred to us, effective as of the date of this notice. All payments should now be made payable to and mailed to our address:

New Factor’s Name

123 Main Street

Suite 200

Anytown, USA 99999

The Assigned Account Receivable:

Description of Invoice: Invoice Number:

Amount: Due Date:

From now on, you should direct all your questions and requests concerning the above-mentioned invoice to us.

Should you have any questions, please do not hesitate to contact us.

Sincerely,

The Factor’s Name.

Conclusion

As you can see, a notice of assignment is a simple but important document that companies in the trucking industry often use when factoring their invoices. The notice informs the debtor that the invoice has been assigned to the factor and provides instructions on how to make payment. By including all relevant information in the notice, such as the amount owed, rate confirmation, the due date, and the mailing address or website where payment should be sent, companies can help ensure that their customers make timely payments and avoid confusion. Advanced Commercial Capital, we are experts in factoring for the trucking industry and can help you get the funding you need to grow your business. Contact us today to learn more.

Introduction

As a freight broker, you understand the importance of having a good credit score. Your credit score represents your financial health and is used by potential lenders to determine your creditworthiness. A good credit score can help you get approved for loans and lines of credit, while a poor credit score can make it difficult to get financing. In this blog post, we’ll share some tips for how to build credit as a freight broker. We’ll also discuss some of the things you should avoid doing if you want to maintain a good credit score.

Why Do You Need Good Credit as a Freight Broker?

Your credit score is a key factor that lenders consider when you apply for financing. A high credit score indicates to lenders that you’re a low-risk borrower, which makes you more likely to get approved for a loan or line of credit. Conversely, a low credit score can make it more difficult to get approved for financing.

There are a few reasons why having good credit is especially important for freight brokers. First, as a freight broker, you may need to secure financing to grow your business. Whether you’re looking for a loan to purchase new equipment or a line of credit to cover unexpected costs, good credit will give you more options and better terms.

Second, your credit score can impact the rates you’re able to get from factoring companies. When you factor invoices, you sell them to a factoring company at a discount in exchange for immediate cash. The factoring company then collects payment from your customer. Many factoring companies use your credit score to determine the rates they offer, so a high credit score can mean lower rates and more cash in your pocket.

Finally, good credit can help you win business from new customers. Many shippers now use credit scores to screen freight brokers before awarding them business. So, if you have a strong credit score, you may be more likely to win new customers and grow your business.

How to Build Credit as a Freight Broker?

There are a few things you can do to build your credit as a freight broker.
First, make sure you pay your invoices on time. Prompt payment is one of the most important factors in maintaining a good credit score.

Second, use a business credit card for your business expenses. This will help you build a separate credit history for your business, which can be helpful if you ever need to apply for business financing.

Third, consider using a personal guarantee when you apply for financing. A personal guarantee is an agreement that makes you personally responsible for repaying a loan if your business is unable to. Many lenders are willing to extend financing to freight brokers with less-than-perfect credit if they have a personal guarantee in place.

Fourth, try to keep your credit utilization low. Credit utilization is the percentage of your available credit that you’re using. For example, if you have a credit card with a $10,000 limit and you’re using $5,000 of that credit, your credit utilization is 50%.

Ideally, you should keep your credit utilization below 30%. This shows lenders that you’re using a small portion of your available credit, which indicates that you’re a responsible borrower.

Fifth, don’t open new lines of credit unnecessarily. Every time you apply for a new loan or credit card, your credit score takes a small hit. So, if you don’t need a new line of credit, it’s best to avoid applying for one.

Sixth, check your credit report regularly to make sure there are no errors. If you find an error, dispute it with the credit reporting agency.

Finally, remember that building good credit takes time. If you’re just starting out, don’t be discouraged if your credit score isn’t where you want it to be. Just focus on making timely payments and keeping your credit utilization low, and your score will gradually
By following these tips, you can start to build your credit and create a strong foundation for your freight brokerage business.

What is Good Credit for a Freight Broker?

The quantity of credit that is deemed “good” will differ based on the individual freight broker’s needs and situation, hence there is no universally applicable response to this question. However, in general, a good credit score for a freight broker is one that will allow them to obtain the financing they need to grow their business.

One of the best ways for a freight broker to build credit is by establishing a strong relationship with a lender. This can be done by making timely payments on any loans or lines of credit that are extended to the broker. Additionally, the freight broker can proactively manage their credit by regularly checking their credit report and score, and taking steps to improve their creditworthiness.

Ultimately, the goal is to build a strong credit history that will give lenders confidence in the broker’s ability to repay their debts. By doing so, the freight broker can access the financing they need to expand their business and better serve their clients.

Ways to Build Credit as a Freight Broker

There are many things a freight broker can do to build credit. Some methods will take longer than others, but all of them are worth pursuing if you want to maintain a good credit score.

One way to build credit is by paying your bills on time. This includes not only your electric and gas bills, but also your phone bill, credit card payments, and any other type of recurring bill you have. You should also try to pay off any outstanding debt you may have as soon as possible.

Another way to build credit is by maintaining a good credit history. This means having a history of making on-time payments and keeping your balances low. If you have never had a credit card or loan before, you can start building your history by getting a secured credit card. This type of credit card requires you to put down a deposit, which is usually equal to your credit limit.

You can also build credit by becoming an authorized user on someone else’s credit card. This means that you are not responsible for making the payments, but the activity will show up on your credit report. This is a good option if you have a family member or friend with good credit who is willing to add you to their account.

Finally, you can also build credit by taking out a small loan and making all of your payments on time. This will show lenders that you can borrow money and make timely payments, which will help to improve your credit score.

Conclusion

So, as a freight broker, it’s important to start building your credit history as early as possible.

There are lots of ways to do this, and we’ve outlined some of the best ones in this blog post. Keep in mind that good credit is key to success in this industry – so be sure to work on yours! If you have any questions about invoice factoring or anything else related to freight brokering, don’t hesitate to reach out. At Advanced Commercial Capital we love helping people achieve their business goals and would be happy to chat with you about what steps you need to take next.