If you are in the freight industry, then you are very familiar with the “quick pay” option. A growing number of freight brokers offer their drivers quick pay, or payment for delivering a load, minus a small fee, shortly after a load is delivered.
Taking on quick pay loads can significantly improve your immediate cash flow because you will be getting a large portion of your delivery payment upfront. While some freight brokers offer their drivers quick pay, not all do. If you depend on this payment method for speeding up payment cycles and improving your cash flow, then you might be limiting yourself to working solely for brokers who offer quick pay. If you want to carry a load for taking on brokers who don’t offer quick pay, you could be putting your finances at risk by having to wait 30, 60 or 90 days to get paid for a load.
For many stakeholders in the freight industry, factoring is a better solution to improve cash flow. With factoring, you can accept any freight job, including better-paying loads, regardless of whether the freight broker offers quick pay or not.
Factoring is also quicker than quick pay. Some freight brokers pay within a day of delivery, but many take two, three, five or even seven days to transfer funds or mail you a check. However, Interstate Capital, a well-known and respected factoring company specializing in funding freight bills, brings you same-day payment on every delivered load.
Another benefit of choosing factoring over quick pay is the value-added services offered by many factoring companies. You can expect everything from free credit checks on your customers and free fuel advances to professional collection services, equipment financing options and optional invoice preparation and mailing services to be included in your factoring fee.
In a nutshell, factoring brings you a long-term business growth opportunity with a funding partner who is focused on getting you paid fast and increasing your revenue. Interstate Capital partners with many motor carriers who are looking for cash flow solutions that will help them grow their business. Get an instant factoring rate quote today.
What’s the difference between factoring your freight bills and getting quick pay?
Both get you paid more quickly on the loads you deliver, so you don’t have to wait 30, 60, or even 90 days. But the similarities stop there.
Let’s take a closer look:
Quick pay: Not all of your customers are going to offer quick pay, so you’re limiting yourself to a smaller number of jobs
Factoring: With this cash flow solution, you’re open to accepting any freight jobs, including better-paying loads.
Quick pay: While some freight brokers may offer payment within a day of delivery, most will take two, three, five, or even seven days to transfer funds to you or mail you a check.
Factoring: Some factoring companies, such as Interstate Capital, gives brings you SAME-DAY direct deposit payment on every verified load.
Quick pay: Expect pay fees averaging from 2% to 5%.
Factoring: Expect your freight bills typically to be discounted 1.5 to 5%, so your costs are about the same.
Quick pay: This short-term cash flow solution brings you no other benefits.
Factoring: When you factor with a company like Interstate Capital that specializes in transportation, you’ll be partnering with a company providing steady working capital you can use to build your business in the long term. And you’ll receive a host of time- and money-saving services, such as:
• Free credit checks on your customers
• Free discount fuel cards
• Free collections services
• Fuel advances for all loads
• Equipment financing options
• Invoice preparation and mailing