If you are looking for the best truck factoring company for you, there are no doubt a lot of different factors that you will have to consider. That takes a lot of research so that you can get the top information that you trust in order to make your final decision. This decision can be made even more difficult when you are weighing multiple companies against each other and are not entirely sure of what differentiates one from the other!
For that reason, it is crucially important that you find a truck factoring company that will not only understand your needs, but will also make sure to do everything that is in their power to make your agreement work for you so that your business can flourish and grow.
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Above all, the primary benefit that truck factoring offers truckers and trucking companies is that it allows professionals within the trucking industry to gain access to a consistent and dependable flow of cash. This means that you can focus on completing your current jobs, look for new work, and pay employees and more without having to chase down your current or past customers to make sure that they are fulfilling and paying their invoices on time.
Within the trucking industry, truck factoring goes by many names. It is also called transportation factoring, receivable factoring and more. Whatever name it goes by, it is simply one of the most popular forms of financing and funding for businesses within the service industry. Visit the site factorfinders.com to learn more about factoring.
If you are thinking about taking advantage of the many benefits that truck factoring has to offer, here are some of the most important things that you should be looking out for.
But first, what is truck factoring?
Chances are good that you have a pretty good idea what truck factoring is, but just in case you are not totally confident in your understanding, we wanted to take a quick amount of time to simply explain what it actually is.
Basically, truck factoring is a process that provides a way for companies to receive money based on their unpaid freight bills. It is without a doubt a preferred method of accessing cash over something like a bank loan for example because it allows trucking companies to get paid almost instantly without having to wait the weeks or months that it would take for the customer to actually fulfill and complete their invoice.
Essentially, a truck factoring will first look at the amount of money that your company is owed through unpaid invoices and then pay you somewhere between 85 percent and 95 percent of that amount on day one. That means that you will get that lion’s share of the money that you are owed cash in hand. That will allow you to make major payments that you have to make in order to make sure that your trucks and your business keeps running smoothly without any delay.
From there, the truck factoring company will then take on the responsibility of actually getting those customers to complete the invoice – that money obviously then goes to them. Once all the money has been accounted for, the truck factoring company will get you the rest of the money that you are owed minus a fee that is a percentage of the total amount.
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When it comes to truck factoring companies, another wonderful thing to keep in mind is that you will not have to jump through tons of hoops and prove that you have an incredible credit score in order to gain approval. The reason why is because the collateral in the funding agreement are the unpaid invoices themselves. If any credit score is going to be considered, it is the score of your customers who have yet to pay their invoices, simply because a truck factoring company wants to make sure that they can be confident in their ability to actually get those invoices paid.
How to choose the right truck factoring company for you
When it comes to choosing the right truck factoring company to work with, you are going to want to make sure that the terms and conditions, and the way that they operate, fits your needs and desires.
Each truck factoring company is going to be basically the same, but also somewhat different. For that reason, it is really important for you and your company to consider those differences and figure out which align with the way that you do business.
If you are not entirely sure what those differences might be, have no fear! We have gone through the trouble of breaking the major ones down for you.
Flexibility
One really important thing to look at when you are choosing truck factoring companies is the flexibility they are able to offer in terms of your agreement with them. While truck factoring companies will very likely encourage you to sign a contract with a set time length attached (usually a year), they should be willing and able to work with you if you are not interested in signing a long-term deal.
If there is a company that you come across that is requiring you to sign a long-term deal and you are not comfortable with that, there is absolutely no reason why you should not walk away and find a different company to work with.
Find a truck company that is willing to work with you on a month-to-month basis if that is what you are looking for.
Beyond that, flexibility when it comes to invoice volume is important. Companies can get anywhere from a few thousand to many millions of dollars through truck factoring based on the number of invoices they have. Don’t let a factoring company force you into meeting a specific invoice volume because it is important for you to be able to factor the invoices you want to factor while not touching ones you do not want to factor.
Quick and simple
The primary reason why anyone wants to work with a factoring company in the first place is because they simplify business and make getting the money you need easier than going out to your customers and asking them to complete their invoices. The very last thing you are going to want to do is when working with a company that is doing to make your day-to-day more stressful and frustrating than it already is!
For that reason, you would be wise to look for a factoring company that focuses primarily on the credit scores of your customers and the amount of unpaid invoices you are owed.
On top of that, if you have narrowed down your choices, one great way to get a good idea of how good they are to work with is to look at customer referrals and online reviews. That could help you make your final decision a bit easier.
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Additional services and benefits
The top trucking companies are going to offer top services to their clients such as round-the-clock access to their online account, free credit checks for your customers, valuable fuel card programs, insurance help, and much more. While these are not a necessary aspect of a truck factoring company, there is no reason why you cannot get additional benefits for what you are paying for. In fact, if you find a truck factoring company that offers enough valuable benefits, it is surely possible that you will be getting more value out of those benefits than what you are actually paying the truck factoring company in the first place!
Funding
Of course, getting the funding that you need is one of – if not the – most important factors when it comes to choosing the company to work with. Make sure that you are signing up to work with a company that is able to guarantee that you will get your cash in hand within 24 hours of approval. This is the industry standard and anything beyond that should be a red flag in your eyes.
Beyond that, the timeline for funding and payment should work for you and your business. If a company is not able to guarantee fast financing, you should certainly look elsewhere.
They are easy to reach and stay connected
The final thing to go over is to make clear just how important it is that you decide to work with a company that is able to make it a clear priority to stay connected with you and your business throughout the course of your contract with them. This means that you will want to find a company that has the experience and organization necessary to keep you on top of mind at all times.
The reason why this is so important is because you need to know that you have someone to turn to if you hit a snag or have some kind of issue that needs taking care of during your agreement.
In the end, you are paying to receive the service that you need. That means having someone to call or email should you have any questions any day of the week, day or night.
Good luck!
