THE BENEFITS OF TRUCK FACTORING
Posted on 27 Mar, 2018 by Admin
Truck factoring means when factoring companies permit truckers to immediately get paid for their delivery whether or not their customers have paid them or not on time. This way rather than waiting for slow paying shippers and brokers, truckers go to factoring companies to get the same amount for invoices. This is ideal for truckers who now can maintain a healthy amount of cash at hand for day to day costs such as fuel, maintenance, wages and other expenses.
For owner operators, truck factoring makes life easy as it’s easier to access money for immediate purposes. Companies pay advanced cash in exchange for invoices, this is the ideal model because through this you can expand your business, take on more loads and avoid financial crunch. But do not mix it up with a load, factoring is basically your money, you just get it quicker than you would have before. If you keep on waiting for money you may not be able to pay for all the daily petty cash activities like pay roll, maintenance or even fuel.
Now, the million dollar question is that how can you qualify? Factoring companies’ base their decision of who to fund on a customer’s credit history, it protects against unreliable customers or bad debts and so is a flexible way to help your business regardless of how big or small it is. So owner operators, large fleets and also freight brokers can benefit from factoring companies. Furthermore, for owner and operators truck factoring companies provide benefits such as free fuel card programs and deals, advance fuel, no set up fees and short term contracts.
The crux of the matter is that truckers who are smart chose factoring because of slow paying customers as discussed above as its one of the most important aspects, secondly because every business in the world experiences highs and lows, so small companies can offset a loss in earnings by factoring freight bills. Small or medium enterprises look for ways to compete and survive so they get funding through freight bills, bad debt can be avoided and getting funded is faster and more reliable.