Is Freight Factoring Right for You?

 Freight factoring revolves around cash flow. If carriers have slow-paid brokers or consumers, they may have to wait for around 2 months to get paid for their work. Nevertheless, carriers require cash flow to pay their expenses such as insurance, repairs, fuel, payroll, and more. It is where freight factoring comes in. Factoring is a simple way to manage cash flow for trucking firms. You can get the same or next-day payment with no hidden fees and no contracts. Reputable companies process invoices for freight that carriers have dragged. Here, money is advanced on accounts receivable.

How Does Freight Factoring Work?

Freight factoring helps shorten the time you have to wait for payment of your completed work. With freight factoring, you will avail of the following benefits-

  • Haul a load from one place to other
  • Paperwork submitted to the freight factoring company instead of a broker
  • You get instantly paid
  • Your broker pays the factoring organization within a month.

Recourse vs. Non-recourse Freight Factoring
Recourse is a clause in your contract with a freight factoring provider that permits them to take from you if your consumer does not pay on time or does not pay at all. Factoring providers have similar clauses. However, non-recourse means your consumer declares bankruptcy between the time you submit your invoice and the time you get paid.

Overall, a freight factoring company is beneficial for you. It is the service equivalent to convenience.

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