The trucking business is one of the major industries in the United States. As the economy expands, trucking companies have to manage their finances as they transport products from coast to coast after which they have to wait for thirty to ninety days before their invoices are processed. With limited cash flow, factoring companies have come to the rescue of trucking businesses.
Invoice factoring companies play a vital role in helping small trucking businesses through an upfront payment of invoices by up to 90% of the original invoice. However, not all freight broker companies are good for your business. If you are looking for factoring service for trucking, here are some few factors that you need to consider.
1. Dedicated Trucking Factoring Program
When you are looking for factoring service for trucking, you need to look for a company that has a dedicated trucking factoring program. Funding truckers is one of the most complex undertakings because it is not like funding other industries. The needs of trucking companies, freight brokers, and their clients are very different. Some truckers and logistical companies could take many months before they can have their invoices processed.
2. Fuel Card Program
Another important aspect that you should check from factoring company freight when you are looking for factoring service for trucking is a fuel card program. As highlighted earlier, trucking companies may wait for many months before their invoices are processed. A transportation factoring company should provide a fuel card program to the trucking business so that it can be able to sustain its services. Fuel is a major expense among trucking companies and a fuel card program will provide huge benefits.
3. Industrial Expertise
Before choosing a factoring service for trucking, you need to evaluate several trucking factoring companies. A close analysis of factoring companies will allow you to evaluate the industrial expertise of the companies involved. You should focus on contracting the company that has been in the industry for many years. The trucking factoring company that you choose should be an expert in factoring the invoices of small trucking companies.
4. Transportation Specialist
The trucking business is very popular among transportation factoring companies. Many factoring businesses want to provide factoring services because they are aware of the benefits they will be accruing by factoring the invoices of such companies. Therefore, you should make sure that you only deal with transportation specialist companies. Working with experienced factoring companies can lead to some huge problems. You can determine whether a specific factoring company is an industrial specialist by asking industry-related questions.
5. Factoring Flexibility
Before you agree on factoring service for trucking, you need to make sure that you retain the flexibility of the invoices you want to be factored. Most of the trucking factoring companies will require a minimum number of invoices every month. Others will request to factor all the invoices your transportation company receives. This might not be good for your business. Sometimes you might only want to factor the slow-paying customers. Therefore, you should focus on ensuring that you have invoice factoring flexibility.
6. Excellent Customer Services
You must consider an invoice factoring company that will always be available when needed. You need a company that can show your account through online platforms so that you can track down your funds. Companies that lack online support might not be good for your services. Make an effort to ensuring that you have a factoring company that high-level customer services.
7. Avoid Unseen Fees
A factoring company will always factor your invoices at a fee. However, it is important to make sure that you are on the right when it comes to the fees charged. Avoid a situation where factoring companies take considerable amounts of money that you had never agreed on when writing the contract.
These are some of the major factors that you should consider before choosing an invoice factoring company. They will help you to get the right company that will help your logistical company to run smoothly without hiccups.
