Freight Factoring For The Transportation Industry

Running a transportation or trucking company requires proper management of cash, making sure that drivers are paid regularly and that you have ongoing repair and fuel expenses available on hand should the need arise. As the owner of a small or growing transportation company, you also know how difficult it can be to find funding to help you overcome these economic hurdles — especially when some of your biggest and best customers can take up to 90 days to pay on an outstanding invoice.

Freight factoring

This is why so many US carriers rely on a transportation factoring company to help them meet their day-to-day cash flow needs. Increasing your working capital by leveraging your accounts receivable gives you the breathing room and cash flow you need to cover your expenses, take on more customers and loads, and keep your fleet moving.

As the trucking industry continues to embrace technology, the growing use of electronic and digital billing speeds up the entire process and makes it easier for carriers and their customers to get the proper documentation in order, which then allows factoring companies to offer quick approvals as well as same-day funding. A reliable freight factoring partner such as AccutracCapital can help trucking companies of any size that:

  • Need a cash flow boost in order to fund operating and payroll expenses
  • Need capital to fund rapid growth initiatives
  • Are unable to obtain traditional financing from a lender or have reached a ceiling with their bank
  • Are well-established but need a working capital alternative

Unpaid freight bills should not be seen as useless commodities; rather, they should be considered assets that can be leveraged to boost cash flow. Accutrac works exclusively with trucking companies and therefore brings the tools and experience necessary to assess your delivered freight bills and utilize them as collateral. Freight factors understand the difficulties, such as the ongoing driver shortage, that challenge company owners and affect their cash flow every day. A lender that specializes in truck factoring will respond and meet your needs faster to changing financial requirements.

Here’s how factoring works:

  • Your transportation company delivers its freight load as per usual, and it is accepted and verified on delivery
  • Once you send a copy of the invoice to the factoring company, you are advanced up to 97% of the value of the invoice immediately (often the same day), less a small factoring fee that varies depending on your plan.
  • The transaction closes when the factoring company collects on your behalf, at which point the 3% reserve is remitted to you

Companies like Accutrac also offer fuel discount programs, which give you and your drivers the flexibility they need to pay for as well as keep track of fuel expenses. As any expert in the industry will tell you, the most efficient way to run your trucking business is to partner with a factoring company that you can rely on to help you grow.

Understanding the challenges that small carriers deal with day-to-day is also a key factor, so it pays to partner with a factoring entity that understands the trucking and transportation industry intimately. Find one that works exclusively with trucking carriers and you will soon find the working capital you need to cover your daily operating costs and to deliver the best service possible to your customer base.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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