Why Freight Factoring?
If you are considering freight factoring because you need to get paid quicker, you have come to the right place. Most businesses that have accounts receivables, including freight companies, often benefit from invoice factoring. Because it is common for freight companies to get their accounts receivables paid a month or more later, finding another solution to help with financing is essential. There are numerous things your business could use with that money such as fuel, bills, insurance, payroll, truck payments, etc. Today, we are going to look at a few top reasons why your freight company should look into freight factoring as a reliable source of financing.
1. Cash flow is crucial
As you most likely already know, businesses that use invoices may find themselves in financial binds. Whether you are just starting a freight business, or already have one and know what it’s like to wait on invoices to be paid, freight factoring can help with keeping your cash flow consistent. This is extremely important for keeping your operations running smoothly and having enough money to pay for fuel, repairs, payroll, and much more. If you need to stabilize your cash flow, non-recourse or invoice factoring is the best solution.
2. Quick and easy
Getting your account receivables paid through invoice factoring is not only a simple process, but it’s also a quick one as well. Often, in the transportation and freight industries, waiting to get paid is never convenient or good for business. Why wait to get paid? If you have numerous invoices that need to be paid, factoring can get that money to you within 24 hours of being approved rather than you having to wait over a month to have it paid by your client.
3. Your credit score doesn’t matter
If your company doesn’t have good credit you can still use factoring. Because a factoring company receives their money from your clients, your credit isn’t a factor in qualifying for factoring services. Rather, it will be your clients that will generally receive the credit check for approval. A factoring company will purchase your invoices and then will go to your client for collections, which is why you can sell those invoices without being required to have proof of good credit.
4. Can help improve your credit score
If you have bad credit and you want to turn that around, factoring can help you. Most of the time bad credit is due to insufficient cash flow. If you need to make sure that you pay your bills on time, freight factoring is your solution. Because factoring companies don’t look at your business’ credit score, this will give you the opportunity to gain a better cash flow so that you can make payments on time and improve your credit score.
5. Freight factoring is a major stress relief
When you take advantage of freight factoring, no longer will you be worrying about gaining the funds you need take payments on time, expand your business, etc. Not only will you feel a burden lifted with a more reliable and stable cash flow, but also you won’t have to worry about collections. Letting another company take care of the collections, so your employees can do what they’re best at is a huge benefit.
We hope these tips have helped you understand how freight factoring is a fantastic solution and we hope that you find the right type of financing for your company.