Freight Invoice Factoring

Time to Make Your Move

Freight is the transport of goods and products by land, sea, or air. To pay wages, fuel, repairs, insurance, and more, freight companies—owner-operators, fleets, and brokers—depend on prompt payment of invoices. But in this industry, it’s not uncommon to wait 30, 60, 90 days to be paid. 

To grow, freight companies need working capital. To compete, your company needs to be fuelled by positive cash flow. Freight factoring is all about cash flow. FundThrough is all about finance and invoice factoring for small businesses.

What is Freight Factoring?

If you want to gauge your company’s financial health, all you have to do is look at its cash flow. Thin margins, competition, regulations, and compliance issues can eat into profits and derail cash flow.

With freight invoice factoring, also loosely referred to as factoring for the trucking industry, you sell your customer invoices/accounts receivables at a discount to a factoring company, like FundThrough. In return, FundThrough converts your invoices into cash, often within 24-hours. 

Instead of waiting months to be paid, which can break your budget, you get your money quickly. For small or privately-held companies, immediate payment can get you back on the road and cover your expenses without incurring additional debt. 

Freight Invoice Factoring Process: How it Works

FundThrough automates the invoice factoring process. It’s relatively easy and deliberate. You get paid now, rather than weeks down the road.

  1. Freight and trucking companies ship products from point A to B and you send invoices to your customers.
  2. As the owner, you open an account with FundThrough and provide a few business documents.
  3. Upload your invoices and select the ones to factor. FundThrough integrates with major invoicing platforms to allow you to upload invoices easily.  
  4. FundThrough reviews your application and determines what percentage of your invoices it can factor. FundThrough may advance the entire invoice amount. 
  5. The advance, less the factoring fee, is paid out within 24 hours. 
  6. Depending on your factoring agreement, your customers pay their invoices to either you or FundThrough.

The Pros and Cons of Freight Factoring

Benefits to Factoring

  • Easy approval process: Applying for a loan or line of credit can be a drawn-out process. You incur debt and must pay back the loan with interest. You may also need to offer up collateral to qualify. And, you only need invoices for the jobs already completed.
  • Fast cash: FundThrough typically reviews your selected invoices and deposits money into your bank account within one day. 
  • Transparent Fees: The best online factoring companies are transparent about what it cost to factor an invoice — without squeezing in any hidden fees. FundThrough offers competitive rates and an average time to funding of 24-hours.
  • Flexible contracts and terms: Depending on the factoring agreement, FundThrough can collect the invoice payments, or you can do that yourself. You are never under any obligation to factor your invoices. 
  • Retain equity in your business: Factoring with FundThrough lets you keep all of the equity in your company without giving up control. 
  • Get to work: Factoring with FundThrough allows you to meet payroll and other business obligations, fulfill orders, make deliveries, and expand your business. 
  • Not a loan or line of credit: Factoring is not a loan or line of credit that you pay back with interest.
  • Unlimited funding potential: You decide how many invoices you’d like to fund. 
 

Disadvantages to Factoring

  • It can be expensive: With good credit, interest rates on loans can be relatively low. Factoring your invoices involves paying a fee. Plus, you only receive a portion of the value of your invoices. 
  • Not All Invoices Can Qualify: Verified invoices must be over 90-days to qualify for factoring with FundThrough. 
  • Customers must be creditworthy: If your freight company doesn’t have eligible invoices, factoring is not a solution. Create an account—which does not impact your credit score—and find out which invoices are creditworthy.

What Does a Freight Factoring Company Do?

FundThrough provides funds, for a fee, on your select invoices. Instead of waiting months to be paid from slow-paying customers, you get funds as early as the same day. This is especially useful when your company is cash-poor and growing. 

  • Freight and trucking companies sell the invoices to FundThrough for freight you’ve already transported.
  • You sell your invoices for the completed jobs to FundThrough.
  • FundThrough takes a percentage of the invoice as a fee.
  • FundThrough provides up to 100% of the value of your invoices.   
  • You get the immediate cash advance to run your business and meet your all other miscellaneous expenses—industry leaders, fleet owners, real truckers, and valid drivers with only a single truck can qualify.

 

Unlike business loans or lines of credit from a bank or credit union, qualifying for factoring with FundThrough is based on the creditworthiness of a freight company’s customers, not the company itself.

FundThrough is a reputable company that offers invoice factoring services to the freight industry. It has both the experience and knowledge of freight and trucking companies. It also understands the trucking business, issues with collections, difficulties getting financing, and cash flow issues from unpaid invoices.

Freight Invoice Factoring Rates, Terms & Qualifications

Rates: The rates you pay depends on the factoring company. It also is influenced by the length of time the invoices remain unpaid. Fees can range from 0.5% up to 5%. FundThrough has a transparent pricing structure—0.5% per week or 2.5% per month.

Terms: FundThrough integrates with most invoicing software and can advance the entire value of the invoice. You decide which invoices to fund and when you want to get paid. There are options for flexible repayment, lump sum repayment, skip-a-payment, and early repayment options.You also have online account access and a commitment to competitive factoring rates and fast processing times—often with same-day funding. 

Qualifications: One of the best parts about freight invoice factoring or receivable financing is that unlike a loan or lines of credit from a bank that requires an extensive evaluation of your financial credit and history, your business is qualified for factoring based on your customer credit checks. That means if you’re a startup or don’t have a well-rounded credit profile, you are still a good candidate for factoring. In order to qualify, you must also be a B2B company and have invoices with net terms of 30+ days.

Why Freight Companies Should Use Invoice Factoring

Similar to transportation, trucking, and automotive industries, the freight industry is notorious for getting paid months after a job is completed or a load is delivered. Most companies can’t wait months to get paid. Generating revenue is crucial as payroll, repairs and maintenance, fuel, and other miscellaneous or road expenses must still be paid on time.

Unlike business loans, freight and trucking companies don’t pay anything back using invoice factoring. Your credit isn’t impacted. You’ll be rewarded with nearly instant time to funding and consistent cash flow and never run low on funds to pay all of your expenses. You can grow your business and maintain working capital.

With FundThrough, you get a partner that provides value, quality service, personal care, integrity, and a proven track record of working with freight companies. FundThrough offers quick and flexible funding options on your unpaid invoices so you can grow your business. Its top-notch customer service record stands out, with a 95% customer satisfaction rating and the ability to cut the average wait for payment by 97%.

Is Factoring For Freight Companies a Loan?

No. Freight factoring is not a loan. Also called accounts receivable factoring, invoice factoring for freight companies is a financing solution that helps reinforce cash flow by unlocking the money you have sitting in unpaid receivables/outstanding invoices.

Unlike a business bank loan or line of credit, invoice factoring does not require a turbo-charged credit score or credit history. That’s because FundThrough looks instead at the creditworthiness of your customers.  Also, whereas a loan requires repayment of both principal and interest, factoring does not require interest and is based off on the money (the invoice) you already earned.

How Much Do Freight Factoring Companies Charge

Factoring rates depend on the factoring company. Rates are also influenced by the length of time the invoices remain unpaid. Fees can range from 0.5% up to 5%. FundThrough has transparent invoice processing fees and pricing structure—0.5% per week or 2.5% per month. There are no revenue requirements or monthly minimum volumes.

Freight Factoring FAQ

Your questions answered.

Yes. Freight brokers, companies for trucking, drivers, and trucking businesses all use factors like FundThrough. With positive cash flow, brokers can pay their carriers immediately, and any freight bills due can be handled in a timely fashion. Faster payments build strong relationships between carriers and freight brokers. Payment collection and processing can cost your business both time and money and your annual revenue can suffer. Factoring with FundThrough has no revenue requirements and doesn’t require numerous months in business.

No. Factoring is not considered debt. Factoring is not a loan. You pay no interest, and you incur no new debt. Factoring is a transaction. You sell your receivables to a factor, like FundThrough, which collects payment from your customers.

Factoring does not require a deposit. The factoring company sends a notice to your customers, advising them you, as the business owner has authorized the factor to collect on your invoices. FundThrough advances up to 100% of the value of your invoices and collects the invoice amount from your customers. Other invoice factoring companies can have advance rates anywhere from 60% to over 90% depending on the industry.

You can learn how to begin forecasting your cash flow with FundThrough. Making cash flow forecasting a regular and integral part of your business planning helps you foresee and diagnose issues stemming from the lack of cash so you can take a proactive approach to solving them.

Simple. Intuitive. Freight Invoice Factoring.

Built For Your Business.