Freight Broker Factoring: The Interstate Capital Advantage
For more than 20 years, Interstate Capital has been among North America’s best factoring companies for freight brokers. With its extensive experience in freight broker factoring, Interstate Capital knows the challenges that freight brokers face. As they juggle customers, motor carriers, routes, equipment, weather conditions, deadlines, and sales efforts to recruit more customers, freight brokers can also face significant financial challenges. These challenges can jeopardize their business, especially when their shippers and consignees don’t pay them for 30, 60, or even 90 days.
That’s when freight brokering factoring comes in. Freight broker factoring companies purchase the freight broker’s invoices and pay them a large percentage of that invoice upfront, often within the same day that the invoice is verified with proof of delivery, rate confirmation, and other usual paperwork. Then the freight broker receives the rest of the invoice value, minus a small factoring fee, after the broker’s customers pays the invoice in full.
Benefits of Freight Broker Factoring
Fast payment on accounts receivable is the key benefit offered by freight factoring companies for brokers. Other benefits of freight broker factoring include improved cash flow, eliminating the need to open lines of credit, and more working capital for your business. A good trucking freight broker factoring company will help you stabilize your income and better predict your monthly and annual revenues.
Another benefit is that you can qualify for this kind of alternative funding at factoring companies for freight brokers regardless of your personal credit score or collateral. The factoring company studies the creditworthiness and payment history of your customers, not your background. If you have not qualified for a bank loan in the past, you can still qualify for factoring if you work with dependable customers. At the same time, you can improve your own credit ranking: use your infusion of cash to pay off bills and keep current with expenses.
Benefits of Factoring with Interstate Capital
Timing is critical in the freight industry whether you’re waiting at the dock for a shipment or waiting for a check from a customer. As one of the industry’s best freight broker factoring companies, Interstate Capital has worked hard to develop systems that get you paid within hours of pick-up and delivery. Their systems have helped the company build a strong track record of helping freight brokers succeed and grow.
This expertise in freight broker factoring has led to the development of Interstate Capital’s revolutionary proprietary payment management system, Freight Payable Systems (FPS). The system efficiently handles all the paperwork, invoices, bills, and automatic payments to drivers. FPS collects and stores each load’s paperwork and matches the broker’s invoice to the motor carrier that delivered the load. The funds are carefully tracked and sent to the carrier that hauled the freight when the broker is ready to release them.
Factoring with Interstate Capital allows freight brokers to focus their time on what they do best: keeping their freight moving and drivers on the road.
The FPS program, managed minute-to-minute by the trained FPS team, helps brokers by “setting aside” and ensuring that the cash coming in from a shipment gets paid to the right carrier. The freight broker forwards to the carrier the payment amount due, and the difference, or broker’s commission, is retained by the broker as its payment for arranging the transaction. Through FPS, the carrier will be paid electronically within 48 hours via ACH transfer.
Some freight brokers get into trouble when they receive a payment for a load and use those funds for something other than paying the corresponding carrier. When it comes time to pay the carrier, the freight broker is then in the position of having to use the proceeds from a new transaction to pay the carrier. When brokers factor with Interstate Capital, FPS helps to avoid this predicament. Freight brokers must maintain records that segregate funds payable to carriers from their general operating funds, according to the Federal Motor Carrier Safety Administration. FPS helps freight brokers remain in compliance with federal regulations.
FPS is the only online freight broker factoring system designed exclusively for the freight brokerage industry. It is available at no additional cost only to freight brokers who factor their freight invoices with Interstate Capital.
Why choose Freight Broker Factoring?
Freight broker factoring is a unique solution for transportation professionals. Not only does it ensure that your freight bills are financed on time, every time, but it gives you the working capital you need to ensure that you can continue serving your customers. Instead of waiting for your freight bills to be paid, you can spend more time focusing on keeping your trucks on the road. Factoring companies that pay brokers can help you increase your profit margins.
Interstate Capital’s unique freight broker payment program, along with our dedicated freight broker factoring account managers and team of financial professionals, can give freight brokers the edge they need to get ahead and stay ahead. Are you ready to take your freight brokerage business to the next level?