Funding your business through factoring can be one of the most sensible decisions you can make as a motor carrier or freight broker. Whether you are an owner-operator, own a fleet of trucks, or your own brokerage, using the services of a factoring company can offer serious advantages in terms of speeding up your cash flow, increasing your profitability and growing your business. Factoring services allow you to get paid on your invoices up front to meet short-term cash obligations for things like fuel, insurance, payroll, or maintenance.
Here’s a quick guide to how factoring works in the trucking business:
Factoring is an alternative financial service that allows business owners to sell their invoices at a discount in exchange for payment upfront. You will receive most of your payment for the load you delivered almost immediately, while the factoring company collects your payment and forwards the rest of the cash to you, less the service fee.
- What are the benefits of factoring?
The most popular benefit of factoring is the almost immediate access to the cash you need, making it easy to keep on top expenses such as maintaining equipment, buying fuel, taxes and payroll. It also simplifies your accounts receivable. The factoring company takes over the process of collecting on your invoices, saving you considerable time.
- Is factoring the same as debt collection?
No, the two are quite different. Factoring saves you from having to wait the 30, 60 or 90 days some shippers or brokers take to pay their accounts. Debt collectors are attempting to recover old debt that has gone beyond the agreed-upon payment window. With debt collection, you receive nothing upfront and only a percentage after it has been successfully recovered. The percentages taken by debt collectors are considerably higher than those of factoring companies.
Contact Interstate Capital for an instant factoring rate quote today.
About Interstate Capital
Interstate Capital has been one of the country’s most respected and most trusted factoring companies in the transportation industry. Interstate’s dedicated professionals can assist your trucking business or freight brokerage with high advance rates, low factoring fees, fuel advances before delivery, and quick funding. You can get an instant online quote to find out what your factoring percentage rate would be with Interstate Capital. Experts are standing by to help you get set up and funded within 24 hours after all your paperwork is submitted. Find out about factoring with Interstate Capital and get your transportation business rolling!