Trucking Company

 Every business in the trucking industry needs some type of financing. This is true for start-up companies with a single truck as well as for nationwide fleets with dozens of vehicles on the road. The real question becomes which type of financing is best for your company. Many large financial lenders won’t offer loans or lines of credit to trucking company owners — especially those who operate a start-up or who have less than stellar credit.

This explains why trucking companies of all sizes have been relying increasingly on transport factoring to help meet the day-to-day costs of running their businesses. Factoring helps you turn unpaid invoices into the cash you need when you need it, and because it isn’t a loan and doesn’t count as debt, it doesn’t hurt your credit or your ability to grow your business.

In fact, your customers will know that factoring invoices actually helps you maintain positive cash flow and accelerate growth, which makes it an intelligent financial strategy. Knowing that your business has secured ongoing, healthy financing signals stability and strength, which your customers will be glad to see.

Instead of being seen as a struggling company failing to meet its day-to-day cash flow requirements, your trucking company will instead be recognized as a financially viable enterprise.

What is the Process?

Here’s how transport factoring works:

Step 1. First you make your load for your customer as per usual, but you send a copy of the freight bill and all other supporting documentation to the transport factoring company you partner with. This documentation should include the load, rate confirmation, as well as any other pertinent information about the shipment.

Step 2. The factoring company will run a credit check on your customer, notifying you as to whether or not the party has been approved. This is a form of value-added risk mitigation the factoring company provides, as it informs you of their likelihood to pay in the future and whether you should work with that customer in the future.

Step 3. Once the customer has been approved, the invoice is factored, and as the carrier, you are given an advance of up to 97% of the invoice value, minus a nominal factoring fee that varies depending on your plan. Additionally, 3% is held in reserve.

Step 4. Once the factoring company collects on the invoice from your customer, that reserve amount is remitted.

Transport factoring is a versatile and powerful financial tool used by trucking company owners to ensure they have cash on hand necessary to meet their expenses.

What are the Costs?

Plans differ depending on the factoring company, but a factor that works exclusively for trucking companies — such as Accutrac Capital — will be able to offer plans that are custom-tailored to the needs of the industry. Summarized below are three such plans, but you can always stop by Accutrac Capital to learn more about which specific plan is best for your unique trucking business.

Flat Fee Factoring for Truckers

  • Starting at 1.59% for up to 90 Days
  • A simple, easy to manage option with a straightforward one-time cost

Factoring Line of Credit for Truckers

  • Designed for larger fleets and operations
  • Starting at 0.022% per day

Flex Factoring for Truckers

  • Starting at only 0.49% for up to 10 days
  • The ideal funding option for carriers with customers who pay promptly

Transport factoring solves the ever-present cash flow problem for trucking companies of all sizes who would otherwise need to wait 30-90 days to be paid for work they’ve already completed. If this seems like the right fit for your company, finding out more is just a click away.