Any trucking company owner knows how easy it is to get into cash flow problems. This usually happens because clients do not pay their invoices quickly enough. Instead of getting paid the moment you deliver the load to your client, you instead have to wait 30 or 60 or even 90 days for your payment to clear. Meanwhile as an owner, you have to keep your business running by paying for fuel, repairs, your drivers, and fleet upkeep. The main problem here is that most trucking companies, even the largest, do not always have enough money in the bank to run the business while waiting for payments to come through from a number of clients at once.
This is the reason why so many trucking companies use freight bill factoring to solve their cash flow issues. This type of factoring is a common financing tool that allows trucking and transport companies to finance their outstanding invoices. It works by selling your accounts receivable to a factoring company in exchange for immediate funds, which opens up cash to pay for business expenses and to make new investments.
The majority of factoring transactions are structured through two instalments — the advance and the rebate. The advance instalment is sent to your account as soon as the factoring company receives the invoice that you want to finance, as long as they can verify that the delivery has been made.
Reliable freight factoring from Accutrac Capital — a well-established factor — can, for example, advance you 97% of the value of the invoice. The other 3% is held in reserve, and then refunded to you once the invoice is actually paid. A small fee is deducted from the advance installment.
The actual fee charged depends on the plan your company chooses. Consider one of the following 3 plans, if you require freight bill financing.
Flat Fee Factoring
- From 1.59% — for invoices that usually take up to 90 Days
- A simple, easy to manage option with an easy to calculate one-time cost.
Factoring Line of Credit
- Designed for larger fleets and operations
- For large operations
- From 0.022% per day
- A flexible line of credit providing maximum value and control for larger truck fleets
Flex Factoring
- Only 0.49% for up to 10 days
- The ideal funding option for carriers with quick paying customers
If you’re having trouble with cash flow, a third-party factor can help. Instead of waiting up to 90 days to receive your payment, a factoring company can advance a massive portion of the money you are owed to you upfront. These funds give you immediate liquidity, which you can then use to pay for your business expenses, or even take on new growth opportunities. Find a third-party factor to help get your cash flow flowing again.
