Freight factoring, or invoice factoring, is a way for you to get the money you need for your trucking company. The best part of using this type of system is that unlike banks, you get the money you need now.
There’s very little waiting involved, and you don’t have to worry about having perfect credit the way you would if you were dealing with a bank. Before you use a company like this though, there are certain things you need to know and certain things you need to do to find the company that is right for you.
Your first step is to search either Google Local or your favorite search engine for companies that offer this type of service. You want to search for “freight factoring company“, “invoice factoring”, etc. Choose the keywords you think will help you find the service you are looking for.
Next, you will want to choose several sites to review. Choose sites that offer contact information like email and a phone number. You will also want to see if the site has a FAQ (frequently asked questions).
A FAQ will help you get your preliminary questions answered. While you are reading, note any factors about that company that are important to you. This will help you eliminate companies until you find the one that you want to work with. Things to consider include:
-How fast you will receive your money and in what format (check, ACH, direct deposit, etc.)
-What additional services that company offers (credit checks of your customers, billing, collections)
-How much the service costs
-What size businesses does the company serve
-Which invoices will the company factor (you want to be able to choose)
-How will bank loans and lines of credit affect funding your invoices
-What customer service the company will provide and how they will treat your customers
You also want to consider whether or not the company requires a long term contract. If you can avoid a long term contract, then I would definitely recommend it. This way, if you change your mind for any reason, or you simply want to stop doing business with the company, you have the option.
Again, as you review the information on these websites, write down any further questions you may have. Once you have completed your research, then contact each one of these companies and have them answer your questions.
This will give you a taste of what their customer service is like. You want to make sure that your customers are well served, and this will allow you to test the system.
Now it’s time to start weeding out the companies. Look at those factors that are most important to you. You want to choose the company that most suits your needs. There is no one size fits all solution here, so avoid any companies that may treat you that way.
When you have selected the company you want, then it’s time to contact them and have them set up your account. You have options here. If the company has its website set up correctly, you may visit the site and start there.
If not, then refer to your list of phone numbers and contact the company. Make sure that you know ahead of time what information the company will ask for, and then have this information at your fingertips. This way your account set up will go more smoothly and save you time.
Account processing should only take a few days. If you haven’t heard back from the company you are using, then contact them to find out why. If they decide not to handle your business, then move on to the next company on your list.
The purpose here is to even out your cash flow and have your cash coming in when you need it. Don’t waste time waiting on a company that’s not serving you.
Freight factoring will save you a lot of time and money in your business. It will also allow you to have your cash flowing in when you need it. This will reduce your stress and allow you to focus on what’s really important: serving your customers.