Transportation Factoring for Invoices

A Move In The Right Direction.

The transportation sector and trucking industry are broader in scope than many industries. It meets the need for moving passengers, cargo, and information as efficiently as possible. Airlines and air freight, motor carriers, marine, freight companies, road and rail, including OTR trucking, all play a role in the ultra-competitive transportation industry.

Managing cash flow is vital to all transport and trucking companies. You still have to make payroll, cover repairs and maintenance, pay for fuel, manage all trucking operations and equipment financing, and bear the costs of day-to-day business expenses. Wait too long to get paid on your customer invoices, and your business can come to a screeching halt.  

Small business factoring for transportation and trucking companies solves cash flow problems and gives your business the financing and working capital to meet your obligations and goals.

What is Transportation Business Invoice Factoring?

It’s not uncommon in the transport industry to wait months to be paid on invoices. Truckers making deliveries of loads record delays, storage times are extended, and you may not have the money on hand to wait. Transportation Invoice Factoring allows truckers and drivers to get an advance (minus a small fee) on unpaid accounts receivables by factoring your unpaid invoices.

You simply sell select unpaid invoices to a factoring company, like FundThrough, and in as little as one day, you get the money you need to get back to hauling people, products, and loads. No more turning down that next big contract or putting off your goals for growth.

Transport invoice factoring or freight factoring: 

  • Provides immediate access to cash with little or no wait period.
  • Removes the challenge of collecting payment from slow-paying customers on your own.
  • Is a practical solution to improve or maintain a positive and consistent cash flow.

 

As a financing option, factoring can be especially helpful if your trucking business is small and you can’t qualify for a business loan or line of credit. Or if you do, interest rates and terms are unfavorable. 

How Does Transportation Invoice Factoring Work?

FundThrough provides working capital based on the size of your outstanding customer invoices.

  1. Transportation companies submit approved unpaid invoices to FundThrough.
  2. FundThrough purchases your qualified unpaid invoices, and advances up to 100% of the expected net collectible value.
  3. FundThrough waits for invoices to be paid by your customers. 
  4. FundThrough pays claims to you in as little as one day.
  5. Your company receives up to the remaining 20%, minus a fee (based on invoice terms). 

FundThrough is an industry leader in freight bill factoring. By leveraging technology to automate the payment of your outstanding invoices, FundThrough can provide you with a funding limit and process your invoices in as little as one business day. The amount advanced varies based on the claim amount and the size of your transport company.

Benefits of Transportation Factoring

Holding receivables on the books for months cost small and mid-sized transport businesses as much as $3 trillion annually, according to Sage, a market leader for integrated accounting systems located in Atlanta, Georgia.1 

That means that 1 in 10 invoices are not paid on time. Cash flow is stifled, and the working capital needed to grow your company is held up. Factoring can help, and it comes with several key benefits.

  • Quick advances. FundThrough advances up to 100% of the expected net collectible value of your selected invoices.  
  • Fast invoice approval. Your selected invoices can be approved and paid in as little as one day, giving you access to needed funds. 
  • Grow your business. Factoring with an industry leader like FundThrough gives you the working capital you need to grow your business.  
  • Win more contracts. There is no need to turn away work because you don’t have the cash reserves to sustain your business and pay your expenses until invoices are paid. Factoring gives you the cash, and FundThrough gives the confidence to bid on more jobs. 
  • Get qualified. Your credit score and credit history aren’t considered for factoring. Qualifying is a lot easier than with a loan or line of credit. Plus, applying for factoring doesn’t affect your credit score and you won’t take on new debt.
  • Outsource the collection process. It’s not easy collecting on your unpaid receivables. It takes an investment of time on your part. Factoring facilitates the process.
  • No collateral is needed. Unlike a secure loan, you need no collateral to factor your invoices, so you keep complete control of your company. 

Plus, unlike business bank loans or a line of credit that you pay back with interest (while incurring added debt), an agreement for transportation and trucking factoring turns most any type of transportation invoices into cash for a small factoring fee. You won’t be turned away for credit reasons or bad debt.

What are the Disadvantages of Transportation and Trucking Company Invoice Factoring?

Invoice factoring has many benefits for the transportation and carrier industry. Along with the advantages, there are also a few disadvantages.

  • Transportation factoring fees. Factoring with FundThrough primarily centers around the discount rate. This rate is a small percentage of the invoice value. 
  • Less control. Your customers no longer pay you. Instead, they pay FundThrough, which means you have less control over your select receivables.

How Does the Transportation Industry Use Invoice Factoring?

If you’re in the transportation industry, you are a carrier or own a trucking company, it doesn’t take long to notice the gap between completing a job and getting paid. It may be common to extend terms to valued customers, but waiting 60 to 90 days to get your money can disrupt cash flow and stunt growth.

And, that only adds to the other challenges you may face, like: 

  • Securing supplies 
  • Long transport and storage times 
  • Fees for transport 
  • Cargo and delivery delays
  • Government regulations 
  • Fuel and labor costs 
  • OTR tolls and permits 
  • Downturns in the economy

 

Transport invoice factoring is not a loan. It is an advance on the value of your customer accounts receivable invoices. It is one of the best ways to solve the imbalance between completing a job and getting paid by unlocking liquidity for your business.  

With FundThrough, you create a free account, submit a few business documents, and select which invoices you choose to fund. You can decide between Velocity Invoice Factoring—for businesses invoicing other businesses between $15,000 up to $10 million, or Express Invoice Financing—for businesses invoicing other companies between $500 and $15,000.

Questions? The dedicated account team at FundThrough is standing by as a partner in your success.

What is the Typical Charge for Transportation Factoring?

Based on the terms of your invoices, you are charged a monthly fee—as low as 2.5%. You can fund invoices of any size on FundThrough’s platform.

FundThrough integrates with most popular invoicing and accounting apps to automatically pull eligible invoices for funding onto your dashboard. Get paid in as little as one day. 

FundThrough offers competitive factoring rates and transparent freight factoring pricing. No credit checks.

  • Velocity Invoice Factoring is generally best for businesses invoicing other businesses anywhere from $15,000 to $10 million, for a fee as low as 2.5% monthly fee.
  • Express Invoice Financing offers a weekly variable rate that starts at 0.5%.

Global Pipeline partnered with FundThrough to accelerate its cash flow, making it possible for them to scale up on larger projects and make bids on projects worth millions.

How to Choose the Right Transportation Invoice Factoring Company

Not all factoring companies are alike. Some specialize in only a few industries. Others may have high fees or lack pricing transparency. As a transportation company, it’s vital that you work with a factor that understands transportation factoring basics and your company’s cash flow challenges. 

When choosing the right transportation invoice factoring company, you’ll want to consider a variety of factors:

  • Experience
  • Industry expertise
  • Satisfaction rating
  • Easy account set-up
  • Advance rates
  • Fees
 

FundThrough provides a cash flow solution for your company with top-notch customer service and a 95% customer feedback and satisfaction rating. It is the choice for companies of all types with a history that spans 7 years of service to any type of business—and thousands of truckers—with invoicing and cash flow issues.

  • FundThrough has transportation industry and trucking business knowledge, and experience. 
  • FundThrough can cut the average wait for payment by 97%.
  • FundThrough helps you build your business with the money you’ve already earned.
  • FundThrough has fast and easy account set up.
  • FundThrough’s pricing strategy is transparent.

FundThrough is the #1 factoring invoices platform. It offers outstanding customer service, flexible funding options, and next-day funding. FundThrough is actively funding businesses in both the U.S. and Canada. FundThrough is a friend to thousands of truckers, companies for truckers, and all other transportation businesses.

Trucking Invoice Factoring FAQs

Your questions answered.

Recourse factoring means that your company is responsible for any invoices the factoring company cannot collect on. It is a common type of factoring. 

With non-recourse factoring, the factoring company assumes most of the risk for non-payment of customer invoices. There are usually stipulations on which invoices the factoring company will cover. This type of factoring is more expensive.

In these ever-changing times, any company that moves passengers, cargo, and information can benefit from transportation invoicing. Types of businesses include:

Trucking companies, freight brokers, railroads, airlines, marine companies, couriers, automobile transport companies, oil and gas transporters, dump truck companies, shipping companies, fleets, cruise ship companies, OTR trucking, and start-up transportation companies

Most factoring companies draw up an agreement between your business and the factoring company. In this agreement, there may be a stipulation that you can only work with one factoring company while under contract. Business owners—and real truckers—can inquire regarding a long-term commitment, shorter commitments, complex contracts, monthly minimum volumes, volume discounts, and more by reaching out to the industry experts at FundThrough.

SOURCES: 1. https://www.sage.com/en-us/

Simple. Intuitive. Transportion Invoice Factoring.

Built For Your Business.