How the Freight Factoring Process Works
When you factor freight bills you can often have an advance funded within 1-2 days (or even faster) – up to 95%* of the face value of the invoice, with a low holdback (or even no holdback).
For instance, if you are billing a customer in the amount of $12,000 but you want to access the funds without waiting weeks – or months – for your customer to pay.
Assuming a factoring fee of 5%, and an advance rate of 90%, here’s how it would work:
|Day 1 –
||Generate a $12,000 trucking invoice and factor it
| – Day 2-3
||Receive $10,800 – a 90% advance – by wire transfer or ACH
||Factoring company earns $600 – a 5% factoring fee
||You receive the $600 holdback (or “reserve”) after the invoice is paid
*Your freight factoring rate could be as low as 5% – or even lower – ask about volume discounts!