Factoring Industry News and Trends

Choosing The Right Freight Factoring Company

Choosing The Right Freight Factoring Company

by Eric Belk; Find Eric on Google+.

While there is no shortage of freight factoring companies throughout the United States, how can motor carriers and owner-operators make smart decisions on who to partner with? We’ve put together this helpful guide to assist you in making the right decision for your business.

Examine the company’s target market.

Not all freight factoring companies target the same type of owner-operators—some focus on small and medium-sized businesses while others specialize in handling large volumes of invoices. Be sure to select the partner who specializes in factoring for businesses of your size.

What percentage can they advance and how quickly can you receive funding?

If you’ve been waiting 30, 60, or 90 days for your customers to pay you, chances are you’re looking to factoring to help improve your company’s cash flow. Most reputable freight factoring companies offer a minimum of 80% cash advance, while some (such as Match Factors) offer 95% and higher cash advances to qualified customers. If you’re seeking to improve overall cash flow and get paid quicker, you’ll want to partner with a freight factoring company that offers same day (or 24 hour) funding upon receiving your invoices.

How simple is their factoring program?

To ensure long-term success, you’ll want to choose a freight factoring partner who offers a simple, straight forward program without any difficult program conditions. Programs that can offer you a flat rate structure rather than a variable rate structure may be more appealing to smaller trucking firms and owner-operators. This will help you better manage your budget since your invoice factoring rate will remain constant. Also be cautious of setup fees, time conditions and volume requirements, as these can be sources of potential additional costs and headaches for your business. Choose a partner offering multiple avenues of invoice submission as well to ensure flexibility when it’s time to submit your invoices.

Bonus: Consider choosing a partner that offers online account access so you can log in and view account information, reports, and notices no matter where you are.

What other perks come along with their program?

Many freight factoring companies offer additional benefits besides just factoring freight—common benefits include fuel cards providing you with discounts, free credit checks to review customers, and priority shipping for invoices.

Bonus: Some of the best perks you can receive from a freight factoring partner are stellar customer service and attentiveness to your needs. Pay close attention to how you are treated as a potential new client and make sure that treatment extends through the life of your relationship. The last thing you want is to partner with a freight factoring company that promises you the world only to treat you differently once you become a client.

We hope these suggestions help guide you towards finding the perfect factoring partner for your business. Interested in learning more about Match Factors? Check out more information on our freight factoring program.