Trucking is a huge business. Imagine the many goods you need to transport every day. Depending on your clientele, it’s not impossible to earn thousands of dollars each month. But as they say in investing, the bigger the rewards, the higher the risks. For fledgling enterprises, this may come in terms of additional funding such as for unexpected truck repairs or loss of goods (in case you forgot to get a business insurance policy). If you need money, you can try asking for help from these factoring companies used by trucking companies.
But before we get into that, have an overview of what factoring means. Factoring is a process wherein you offer your invoices in exchange for money. Your invoices are basically your accounts receivables or your collectibles from customers. The company then gives you an upfront fee, which is ideally 70 to 90 percent of the value of your invoice. It then pays the rest once the customers have paid the invoices (it depends on the agreement, as you’ll learn later), less the factoring fee, which then serves the income of the company.
Factoring Companies To Choose From
When it comes to factoring companies used by trucking companies, you can count on these to give you the best deals:
1. Factor Finders
There are a lot of reasons why you’ll like Factor Finders. First, it offers both recourse and non-recourse factoring. In recourse factoring, you have to get the invoice back in case your customers didn’t pay their debt. This is beneficial if you’re looking for a cheaper fee. Non-recourse works in an opposite manner–that is, the factoring company absorbs the unpaid invoices, so you don’t really suffer a loss. But because of the high risks for the factoring company, the fees may be significantly higher.
Nevertheless, the factoring fee, in general, is small at about a percent. It also doesn’t require any minimum reserve or requirement. Usually, companies may approve your application only when your invoice reaches a certain amount at a specific period, say, 90 days.
Fundbox considers itself an invoice funding company than a factoring, although the concept is similar. The biggest difference is the upfront fee that you will receive. In factoring company, you get around 70 percent of the value of the invoice. With invoice funding, you will have 100 percent, and then you pay the company within the next 12 to 24 weeks after the customers paid the invoice. You will also use software you need to sync with your accounts receivables.
BlueVine is like Fundbox but with more flexibility. Moreover, it caters to small or growing businesses whose financial requirements are normally not as large as the established ones. They don’t support those in healthcare or medical industries. With them, you can already get a credit for as low as $5,000. Moreover, you have the option to choose which invoices you want to factor or funded. In other words, you have more control over your total fees.
These factoring companies used by trucking companies are stable and reputable. You can rest assured they give 100 percent support to small businesses that sometimes find themselves in a tight financial spot once in a while.
If you are in the trucking business you want to work with factoring companies used by trucking companies who know your industry well. FactoringCompany.net enumerates some of the best in the market today.