What is Freight Factoring?
Carrier books shipment with broker.
Carrier delivers shipment. Carrier invoices broker, broker pays between 30-60-90 days after receiving invoice.
Carrier submits invoice to factoring rather than broker. Factoring company advances funds immediately for a competitive percentage.
Carrier is now paid.
At this stage, factoring company then, invoices the broker, and the broker remits payments to factoring company.
Factoring your freight bills has many advantages for truckers and freight brokers.
They include:
Take on more loads: Having access to financing and improved cash flow allows you to take on more loads. You are no longer restricted by your funds.
Improve customer quality: Factoring companies check the commercial creditworthiness of your shippers/clients. They help you avoid those that could become problems. This support allows you to focus only on your best potential clients.
Easy increases: Your customers can be approved quickly. Most line increases can be approved the same day. The size of your line is based on your ability to sign on good customers and deliver good service.
