What is Trucking Factoring?
Trucking factoring is a process that makes it possible for you to
get paid almost immediately after you do work instead of waiting on your
customer to pay. With a truck factoring arrangement, you submit an
unpaid invoice to a factoring company. Then the factoring company gives
you an advance based on the amount of the invoice. Then when the
customer pays the invoice, the factoring company gets paid back for the
advance.
Advantages
Using truck factoring can provide you with a number of benefits as a trucking company owner. Regardless of whether you run a big trucking company or if you are a one man operation, you could benefit from this method of finance. With factoring, you can speed up the time that it takes to get your hands on the money that you need. In many cases, it can take 30 or 60 days to collect on an invoice from one of your customers. During the mean time, you need money to pay for gas and for other expenses so that you can stay on the road. With factoring, you can collect your money within 24 hours in many cases.Another advantage of trucking factoring is that it doesn’t necessarily depend on your credit. The factoring company is not concerned with your ability to pay because you are not the one paying back the advance. They are instead concerned with the validity of the invoice, and the reputation of your customer. As long as you are working with a customer who will pay back the invoice, you shouldn’t have to worry about getting approved. This makes it easier to get access to money than if you were trying to get approved for a loan.
Considerations
Although trucking factoring can open up new opportunities for your business, there are a few things for you to understand before getting involved in this arrangement. Before you agree to a deal, make sure that you understand exactly what it is going to cost you. Some factoring companies charge high rates for their factoring services. Others are much more affordable and easy to work with. Look at your jobs to make sure that you have enough profit built in before you agree to the deal.You should also find out what it will take to get approved. Most of the time, you will only have to fill out a simple form and then submit the invoice to the factoring company for review.
You will also need to know exactly what it takes to get paid. Find out how long it takes to get paid once you submit an invoice, and then you can move forward with the deal to help get you the money you require.
Collect from: http://www.invoicefactoringloans.com/truck-factoring/
