WHAT'S IN THIS GUIDE
If cash is king for all businesses, it is an emperor to companies in fast-moving, high-volume industries such as trucking. You need to be cash-flow positive all the time to compete. Here’s why. At the minimum, you’ll need ongoing cash and the available revenue to pay truckers, buy fuel, repair broken-down equipment, and fund other expenses.
Besides, the typically thin margins for trucking companies need a high cash turnover rate to have a shot at being profitable. Invoice factoring for trucking companies, or freight factoring, presents a solution to these cash flow challenges.
Invoice factoring for trucking businesses involves selling your unpaid invoices, also known as accounts receivables, to a factoring company (or invoice factor) at a discount to receive payment faster. When you work with a truck factoring company, you no longer have to wait for months to get paid. In fact, thanks to our innovative technological process, FundThrough can offer same-day funding for your unpaid freight bills.
Small- and medium-sized trucking companies that may qualify for freight factoring services include freight brokers, trucking fleets, professional services, owner-operators, companies with 1-5 trucks, semi-trucks, freight businesses, dump truck haulers, a broker, large transportation fleets, over-the-road operators, single drivers, and more. If your trucking business has cash flow and working capital issues, FundThrough has a solution.
Traditionally, invoice factoring, as a whole, is classified in several different ways. Here are two common types of factoring classifications:
The first classification is based on how and when you can use invoice factoring to finance your trucking business.
There are three options here:
The second classification is based on the type of agreement you have with the factor.
We call these classifications traditional because they can make the invoice factoring process more cumbersome than needed, albeit still simpler than traditional loans from banks.
Next-gen factoring companies like FundThrough eliminate the restrictive terms and process by using technology to facilitate an ongoing relationship while offering trucking companies the flexibility to select the invoice(s) to factor.
The following example illustrates how your trucking company would do invoice factoring online.
The trucking industry’s fast-paced nature means that easy access to financing can be a competitive advantage; however, factoring your invoice online can be particularly appealing for the following reason.
With the cash advance you get from your outstanding invoices you can pay for common expenses such as:
There are two main types of freight factoring rates for Trucking companies:
FundThrough offers flexible repayment options such as lump sum repayment, early repayment, and skip-a-payment (only for express). That said, you can always speak to the factoring company to work out a fee structure that works for you — especially if you expect to factor large volumes of invoices.
Trucking companies would need to provide a few documents for validation purposes. But just how many documents would depend on the factoring company. At the minimum, you would need to provide the following documents:
* FundThrough works with the bank to fund the client’s account. Usually, the bank is flexible and can release funds within 1-2 hours via wire transfer.
Here are a few reasons:
Your questions answered.
It depends on the freight factoring company and the period of time the invoice remains unpaid. But fees can be as low as 0.5% and as high as 5%. FundThrough has a transparent pricing structure of 0.5% per week or 2.5% per month. At FundThrough, you’ll find more options such as flexible repayment, lump sum repayment, skip-a-payment, and early repayment features to help small businesses meet their financial goals.
It depends on the freight factoring company and the period of time the invoice remains unpaid. But fees can be as low as 0.5% and as high as 5%. FundThrough has a transparent pricing structure starting at 0.5% per week or 2.5% per month. At FundThrough, you’ll find more options such as flexible repayment, lump sum repayment, skip-a-payment, and early repayment features to help small businesses meet their financial goals.
Yes. It matters that the Factor you choose to work with understands and has knowledge in your business. FundThrough was launched in 2014 and has become a leader in the financial technology space, funding tens of millions of dollars in invoices every month for large, medium, and small businesses, including companies for trucking. FundThrough knows freight invoice factoring.
Interested in possibly embedding FundThrough in your platform? Let’s connect!