Large fleets of trucks depend on freight factoring to help them improve their cash flow. Many fleets are unable to wait to receive their payment for an extended period of time. By using a factoring company, fleets are able to receive most of their money upfront. Here is a look at some of the other ways that freight factoring impacts fleets.
Benefits
Freight factoring saves fleets time and energy by taking their focus away from worrying about making their deliveries on time. If any repairs need to be made, companies don’t have to take funds out of their emergency account to pay for the expense. Any expenses that arise on a trip are covered.
Thanks to the timely payments, freight factoring often boosts the morale of different fleets. Freight factoring helps fleets take care of daily expenses such as gas, insurance, repairs, and salary payments. Fleet trucks require the necessary fuel, oil changes, repairs, and tuneups.
Explaining The Process
The freight factoring process contains multiple steps. To start, companies can email the freight factoring company all of their client’s information. The freight factoring company will analyze the size of the load and the rate confirmation, among other things. The freight factoring company will run a credit check to help ensure that the client is trust worthy and not high risk. Once the client has been approved, the load is processed, Once everything has been emptied, the fleet contacts the freight factoring company again regarding the Bills of Lading. Withing 24 hours of emailing the documents, the freight factoring company will deposit the client’s payment into the fleet’s account.
As fleets start to research different fleet factoring companies, it’s important that they know whether the company uses a policy of recourse or non-recourse factoring. Non-recourse freight factoring allows fleets to avoid reimbursing the company for upfront cash if the carrier doesn’t perform. The factoring company will take responsibility for the risk. With recourse freight factoring, the upfront money is provided by the factoring company if the fleet agrees to reimburse them in the event that the shipper does not pay.
Making A Decision
Many fleets prioritize improving their maintenance budget and payments. For a small fleet, it’s hard to establish the necessary cash flow to keep things in order. That’s why choosing a freight factoring company has become more complex than ever before. Freight factoring companies offer many different benefits.
Freight factoring companies have been able to adapt during this age of technology. Purchases now occur faster than ever before. Some companies offer fuel advances and 24/7 roadside assistance. Some factoring companies are also developing mobile apps which will allow carriers to add information on the fly. The digital influence has made it much easier for people to establish a trucking company. In the future, factoring companies will likely add online account services.
Keep in mind that some freight factoring companies have monthly minimums that must be met by every carrier. Check on the length of the contract. Some companies allow carriers to use the service at their convenience, while others mandate that carriers sign a long term contract. Carriers should also do research on the freight factoring company’s termination fee. Inquire about the size of the fee.