What is Freight Factoring? Feb08


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What is Freight Factoring?

Freight factoring (aka trucking factoring) is a form of invoice factoring that allows trucking companies, including owner-operators, to turn unpaid invoices into immediate cash. It’s common for a trucking company to use freight factoring to cover cash flow gaps while they wait to be paid by shippers or freight brokers.

If you’re looking for a freight factoring company, and you have at least $100k in annual revenue, take a look at BlueVine. They offer up to $5mm in financing with rates starting at 0.25% per week. Apply online in 10 minutes, and get funded in as quick as 24 hours

Freight factoring, aka freight bill factoring and trucking factoring, is an account receivable financing option that can monetize your outstanding invoices by getting you paid immediately for work you’ve already completed. The factoring company will traditionally pay you 80-90% of the value of your outstanding invoice up front, and then pay you the remaining balance, minus their fees, once your customer pays off the invoice.

Freight factoring is beneficial to both small owner-operators looking to get paid immediately to take on additional work, and for larger trucking businesses looking to fill a cash flow gap. It is also a great way to get financing if you’re not a prime borrower. You can qualify based on the creditworthiness of your customers instead of your own. Borrowers with bad credit may find this to be their most affordable working capital financing option.

Typically, freight factoring will carry different terms and qualifications based on how much factoring you need. Larger trucking companies who do $30K+ per month in invoice volume will typically seek different partners than smaller owner-operators doing less than $30K. Our comparisons throughout this article will take both types of businesses into account.

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