Freight Bill Factoring Is Different From Any Other Business Loan

Finance.

Trucking companies can survive with freight bill factoring - in a business such as transportation, where the productive assets are on the streets and freeways, away from the owner it is important that the trucking company owners have a steady flow of funds to meet operational expenses. Generally clients of trucking company pay their invoices in 30 to 60 days, depending on the contract, resulting in working capital shortfall which truck owners find difficult to overcome.

Trucking company owners need cash for fuel, repairs/ breakdowns, tires, drivers, loan/ lease installments, and other day to day expenses. - most prompt paying customers still take 30 days to clear their dues. One option that is gaining in popularity with the trucking fraternity is freight bill factoring. In the past there was no option for the truck owners but to wait for the payments. Freight factoring effectively eliminates the waiting period and gets the freight bills paid in a few days, sometimes as less as two days! Freight bill factoring is different from any other business loan.

The last decade has seen the emergence of freight bill factoring as the preferred choice of truck owners. - freight factoring works in a simple way, the trucking company delivers the goods and issues a freight bill. The factoring company then waits the remaining period till the bill is due. The freight bill is then sold to the factoring company, factoring company pays up to 90% - 97% of the freight bill to the trucking company as first installment. Once the factoring company gets paid in full it pays the balance amount to the trucking company as second installment, however the factoring company charges a small fee for the same. The charges depend on the volume and duration of transactions. Freight factoring rates vary and individual companies charge anywhere from 5% to 5% for 30 days.

Trucking companies with a history of 60 days transactions are charged a higher fee than companies working within 30 day duration. - trucking companies which have clients that are bad paymasters are generally refused freight bill finance. The credibility and the client profile of the trucking company are also determining factors. Today more and more freight bill factoring companies are offering faster turnarounds as they recognize the importance cash flow in running a successful business. Trucking companies need to present proper documentation and prove the credit worthiness of their clients, volume and duration to get the best deal from factoring companies. Freight bill factoring companies set up factoring lines in a few days. The presence of stiff competition has forced factoring companies to set up factoring lines in less than two days if the documentation of the trucking company is in order.

They also have toll free numbers on which truck owners can speak to professionals and seek advice on the documentation required. - almost all the major players in the freight factoring business have websites that offer instant factoring quotes and deals. Freight bill factoring is helping truck owners run cash flow intensive business without worrying about payments and this enables them to focus on their core activity.