WHAT'S IN THIS GUIDE
In the freight industry, moving goods via land, sea, or air is only one part of the equation. The other key part is managing the financial landscape, which involves everything from fuel and repairs to wages and insurance. For owner-operators, fleets, and brokers alike in the trucking business, keeping the wheels turning isn’t just about logistics; it’s also about maintaining a healthy cash flow. Yet, in this sector, it’s normal to have your capital tied up for 30, 60, or even 90 days due to delayed invoice payments.
We understand the struggle; we’ve been in your shoes when it comes to having a successful business but slow cash flow. The key to growth and staying competitive in the freight business is having reliable access to working capital, and that’s where invoice factoring comes into play. In this article, we’ll dive deep into the subject of freight factoring, offering you a lifeline for your cash flow challenges.
Freight bill factoring, also loosely referred to as factoring for the trucking industry, is a financial transaction where a freight company sells its unpaid customer invoices to a factoring company at a discounted rate. Specialized freight bill factoring companies, along with general factoring companies, provide this freight factoring service to offer immediate cash flow to the freight company. This is especially beneficial for small operators and freight brokers, as factoring for freight brokers allows them to maintain operations, cover expenses, and stay on the road without waiting for delayed customer payments or taking on additional debt. By using a factoring company for freight brokers, these businesses can receive their funds quickly and efficiently, often within a matter of days.
With a wealth of experience in funding freight companies, all of us at FundThrough understand the unique cash flow challenges you’re facing. Whether you’re an owner-operator, part of a fleet, or a freight broker, getting paid promptly for your services is critical. That’s where our specialized invoice factoring services come in. Let’s explore some specific advantages to using FundThrough’s freight factoring services:
Quick Access to Capital: FundThrough offers an efficient funding process that can turn your unpaid invoices into cash within days.
Flexible Funding: No minimum funding volume is required after your initial funding. You have the freedom to choose which invoices to factor.
Easy Funding Process: The process is streamlined. With one click, you can submit an invoice for funding after customer setup.
No Long-term Commitment After Invoices are Paid: There are no long-term contracts, providing you the freedom to factor invoices only when necessary. No commitment after your customer pays their invoice.
Transparent Fees: FundThrough is upfront about its fees, providing a transparent, single up-front fee for its services. See our pricing page for more details.
Dedicated Support: Personalized support is provided at every step of the funding process through your dedicated account manager.
Accounting Integrations: Compatibility with popular accounting software such as QuickBooks and Enverus allows you to pull eligible invoices directly from your accounting platform.
100% Advance Rates: FundThrough can advance the entire value of your invoice, less one fee.
Unlimited Funding: The only limit to how much you can fund is the number of invoices you have.
Fast Cash Flow: Compared to traditional loans that could take weeks or months, freight factoring services like FundThrough can provide fast cash often within a matter of days.
Retain Equity: Unlike loans or lines of credit, factoring allows you to maintain ownership and control of your company.
Not a Loan or Line of Credit: Invoice factoring is not a debt that you must pay back with interest, making it a different kind of financial tool.
FundThrough offers a dependable solution to the industry-specific challenges you face. Our freight factoring services offer quick and flexible funding options that can help you maintain and grow your operations. We pride ourselves on our customer satisfaction and our ability to significantly reduce the average time you have to wait to get paid. Many trucking businesses trust FundThrough for transparent, flexible, and fast invoice factoring customized to the needs of this sector.
For trucking companies that need help unlocking cash flow, FundThrough offers a streamlined process that’s precise and efficient. We understand the ins and outs of the freight industry and have a proven track record of delivering value and speed to our clients. Below is FundThrough’s factoring process for the freight industry.
FundThrough’s Freight Invoice Factoring Process
Step 1: Set Up Your Account
Create a free account with FundThrough to get started. If you already use accounting software like QuickBooks or OpenInvoice, you can effortlessly connect your existing account. Simply provide some basic information about your business.
See our basic requirements for more information.
Step 2: Select Invoices to Factor
Once your account is up and running, it’s time to upload your freight invoices. You can either manually upload invoices into the FundThrough platform or pull eligible invoices directly from QuickBooks or OpenInvoice. The beauty of FundThrough is that we offer unlimited funding based on the size of your outstanding invoices. Select the invoices you’d like to factor and submit them with just a single click (after customer setup).
Step 3: Get Quick Approval and Funding
After you’ve chosen which invoices to fund, FundThrough will review your application. Once approved, your cash advance is directly deposited into your business bank account, often as soon as the next business day. This allows you to immediately use your capital for various business needs, be it growth projects, payroll, equipment, or hires.
Step 4: Invoice Payment
After the funding process, your customers will then pay their invoices to FundThrough, according to the original terms of the invoice. See how we work with your customers.
With FundThrough, you can focus less on the hassles of slow-paying invoices and more on what matters most – running and growing your freight business. This expedited funding process frees up your cash flow so you can meet pressing financial obligations and take advantage of new business opportunities.
The cost of factoring your invoices, or factoring fee, will depend on several factors. Here are some key elements that could influence your rates:
Invoice Volume: The number of invoices you’re factoring can affect the overall rate.
Invoice Value: Higher value invoices might offer more favorable rates.
Payment Terms: The length of time your invoices remain unpaid plays a significant role. Shorter terms generally mean lower fees.
Customer Creditworthiness: The reliability of your customers to pay their invoices on time can also impact the rate you’re offered.
Industry Risks: Specific challenges or risks associated with the freight and trucking industry can also affect your rate.
No Hidden Fees: At FundThrough, we don’t charge hidden fees. We believe in complete transparency, which means the rate we quote is the rate you pay. There are no setup fees, maintenance fees, or hidden charges lurking in the fine print.
How to Learn More
To get a precise understanding of what freight factoring will cost you, please visit our Pricing Page for the most current and comprehensive information.
One of the standout features of freight invoice factoring or freight receivable financing with us is that we focus on your potential, not just your past. While traditional bank financing might require an extensive evaluation of your company’s financial credit and history, our approach is different. We understand that new companies might not have a long financial track record, which is why we don’t require a certain time in business. Instead, qualification for our factoring services leans more on the creditworthiness of your customers than your own.
To make the process straightforward, there are some essential documents you’ll need to present for qualification. This includes straightforward information like your business formation documents and official photo ID.
The freight industry, much like the rest of the transportation industry, faces its own unique set of financial challenges. These challenges often stem from extended payment terms after the delivery of a load. But with freight bill factoring, these issues can be mitigated. Here are the prominent use cases for working with a freight factoring service:
Delayed Payments: The industry standard often means waiting months after a job completion to receive payment. Freight bill factoring companies like FundThrough ensure you don’t have to wait, improving your cash flow.
Operational Costs: Freight and trucking companies have ongoing expenses, be it payroll, repairs and maintenance, fuel, or other road-related costs. Freight invoice factoring ensures you never run low on funds to meet these expenses.
No Debt Accumulation: Unlike traditional business loans, with freight factoring, there’s no debt to repay. This means your credit remains untouched and you maintain healthy financial records.
Business Growth: With consistent cash flow thanks to a reliable freight factor, you can focus on scaling your business without the financial constraints typical of the industry.
Partner with Proven Track Record: Choosing a factoring company for freight brokers like FundThrough ensures you’re in experienced hands.
At FundThrough, we’re more than just a service; we’re your partners in the industry. We deeply understand the intricate challenges of the freight sector, from delayed payments to the operational expenses that can’t wait. With our expertise in freight bill factoring, we’ve tailored our offerings to directly address these challenges. We’re not just aware of the ins and outs of the industry; we’re committed to helping you manage them to ensure your business thrives
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 strong credit score or credit history. That’s because FundThrough looks instead at the creditworthiness of your customers. It also doesn’t need to be repaid like a loan, rather, your customer pays their invoice.
FundThrough pays invoices in days for industries outside of this list as well.
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.
Interested in possibly embedding FundThrough in your platform? Let’s connect!