What Transportation Factoring Companies Do
Transportation factoring companies expedite cash flow for organizations that invoice their customers for payment after performing services or delivering goods.
They do this by giving the transportation business an immediate advance on freight bills or other customer invoices they factor in exchange for a small fee (called a factoring fee). The factoring fee is a small discount from the face value of an invoice, which is why this form of financing is also sometimes referred to as invoice discounting (or freight bill factoring).
Freight factoring is an especially useful tool for organizations in transportation and trucking! The faster your trucks can be put back on the road to take on new business, the faster your trucking business can grow. Any time your business has to wait for previous customers to pay to take on future orders, invoice factoring could be the answer!
Transportation factoring expedites cash flow by unlocking working capital that is on the books – but is tied up in customer invoices. In addition, factoring can relieve a business of some (or even all) of it’s invoicing and receivables-related tasks. Transportation companies can focus on growing their organizations instead of chasing down customer payments.
Not sure if factoring would free up working capital for your business? Request a free, no-obligation quote and we’ll reach out with more information to help you determine whether factoring could help your transportation company grow more quickly.