Transportation Factoring and Freight Factoring

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Transportation Factoring and Freight Factoring

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Table of Contents

    Freight Industry Overview

    The transportation and trucking industry has long been the backbone of the US economy. A vast majority of what consumers eat, wear, and use on a daily basis is delivered by trucks. With that comes the need for an extensive workforce spanning from drivers, dispatchers, engineers, and mechanics. This not only results in millions of employees in the trucking industry, but a trickle-down effect to job creation and small businesses that service trucking companies. This ranges from fuel stations, tire companies, mechanics, auto accessories, truck manufacturers, etc.

    The transportation industry is made up of both independent owner-operators and large trucking companies. Owner-operators are entrepreneurs that own their vehicles and are contracted to both freight brokers and directly with corporations. Larger trucking companies own the vehicles and employ drivers to provide services on larger contracts they have with corporations. In both of these circumstances, trucking businesses tend to work with large companies that require 15-90 terms to be given on their contracts. Because of this, many transportation companies turn to freight factoring to get paid faster on invoices. The best freight factoring program can ease the problem of distance in exporting goods. Please speak with an SMB transportation specialist today about our transportation factoring programs.

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    Transportation Factoring

    Factoring for transportation companies is the most common form of financing in the freight industry. This is mainly because trucking companies have two assets; trucks/equipment and accounts receivable/invoices. Equipment financing for the trucking industry is used to purchase vehicles, while freight factoring company is used for working capital.

    Freight factoring company have daily and weekly expenses associated with day-to-day operations. Many bills have to be paid while waiting on invoices between fuel expenses, repairs, and payroll. Invoice terms range from 15-90 days and result in a big cash flow gap between incurred expenses and invoices that are paid. To bridge that gap, freight factoring is the best solution. By utilizing freight factoring, also known as transportation factoring, transportation companies can get paid within 24 hours of invoicing clients. By accelerating payments on invoices, transportation factoring companies can keep up with daily and weekly expenses. Factoring company for trucks is monetary third parties who will acquire your company’s receivables at a discount. They own the invoice once they have purchased it. This means that the transportation factoring companies will pursue the customer to pay the invoice.

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    Benefits of Transportation Factoring

    Advance Rates up to 97%

    Our transportation factoring programs provide up to a 97% advance rate on all invoices. With same-day and next-day funding options, you can receive 97% of your invoice in just 24 hours. Transportation companies no longer have to wait 15-90 days to be paid when using our best freight factoring companies programs.

    Fast Approvals

    For new applications, we can have your freight factoring line of credit set up in just 24 hours. Once the application is received and invoices are verified your trucking company can receive up to 97% of billed invoices within one day of being approved.

    Limited Application Documents

    To get approved for freight factoring we only require a few documents, which you will easily be able to access. With just your motor carrier number, copy of insurance, and copy of authority we can have your account approved and funded within 24 hours.

    No Setup Fees

    Unlike many companies we have no application or upfront fees to apply for freight factoring. There are no obligations or commitments required to apply and with light documentation we can provide funding in just one business day.

    No Minimum Volume Requirements

    Our clients have the ability to pick and choose which invoices they want to factor. We don’t require any minimum monthly volumes to be factored. In addition, you can pick and choose which clients you want to use freight factoring for. This provides transportation companies with pure flexibility and control of day to day finances.

    Same Day Funding

    Transportation companies have the option for same day funding on all invoices. This means that within hours of submitting and invoice our team will be able to wire up to 97% of the invoice value. No more waiting on clients to pay in 30, 60, or 90 days.

    Fuel, Tire and Repair Discounts

    By utilizing our fuel card program freight companies can save up to 50 cents per gallon on fuel at over 1,000+ different fuel stations. Our fuel card program also comes with discounts on new tires and truck repairs.

    Increased Working Capital

    When using transportation factoring you have the ability to accelerate cash flow and add more working capital into your business. The additional working capital can be used for marketing, new drivers, additional contracts, and for day to day expenses.

    Improved Business and Personal Credit

    Many business owners rely on personal and business credit cards and trade lines to operate their businesses. Freight factoring is off balance sheet financing, which means you can pay down all of your trade lines and remove debt from you as an individual and from your business. This will increase both personal and business credit and improve your credit profile moving forward.

    Choosing the Best Freight Factoring Company

    Picking the right freight factoring company can be crucial to your success. Freight factoring companies are involved in your everyday operations and are responsible for providing funding for you on an as-needed basis. This means that your transportation factoring company is your partner moving forward, and you want to make sure you choose the right one. It’s important that you consider fees and advance rates, but most important is industry expertise. Make sure that the company you choose to work with is an expert in your business.

    Speak with an SMB transportation specialist to learn about your freight factoring options.

    What is the Best Freight Factoring Company?

    Ultimately, the best freight factoring company for your business will depend on your specific needs and priorities. Here are some factors to consider when evaluating freight factoring companies:

    Rates and Fees

    Look for a company that offers competitive rates and transparent pricing with no hidden fees.

    Funding Speed

    Go for a company that can provide fast funding when you need it, ideally within 24 to 48 hours of invoice submission.  

    Customer Service

    It’s important to choose a company with responsive and helpful customer service available when you need it.

    Industry Experience

    Ask for the freight factoring company’s industry experience and evaluate whether they deeply understand your business’ unique needs and goals.

    Technology and Automation

    Opt for companies that use technology and automation to streamline factoring processes. This makes it easier for you to manage your accounts and track your transactions.


    Check online reviews and ratings from other customers to get a sense of the freight factoring company’s reputation and track record.

    Ready to apply for Transportation Factoring?