Transportation Freight Factoring, What is it?

Trucking companies don’t need to wait when they need to get paid.

Trucking companies can get money immediately with same-day or next-day payment options.


They get paid fast with easy to use Transport Factoring services.

Transport Factoring enables freight brokers to take control of their business through simplified financing solutions.

Transportation/Transport  Factoring, also known as Freight Factoring or Trucking Factoring, is a financial service option that can help trucking companies with streamlining their cash flow.

Transportation Factoring can be the best choice for a trucking company.

One of the easiest ways to understand Transport Factoring is to understand the problem it solves for those in the trucking industry. When running a trucking business, one likely submits an invoice to their client at the time they complete a delivery that has been ordered.

The client then pays the invoice, yet usually not right away.

In fact, it’s more common for it to take anywhere from thirty to ninety days to get paid for trucking deliveries.

This makes it incredibly difficult for a trucking company to plan a monthly budget, as they never really quite know how much money they will actually have coming in during any given month.

This is where the need for Transport Factoring comes in. 

In the simplest terms, Transport Factoring involves the selling of a trucking company’s invoices to a third party, a Factor at the approved slightly reduced rate.

In exchange for the trucking company taking this slight reduction, the Transport Factoring company pays the trucking company for each invoice immediately.

The Transport Factoring company then handles the collection process from the actual client, who then reimburses them for the invoice. 

This allows the trucking company to focus on other aspects of their business.

The more business a trucking company does, the lower their rates will normally be.

Transport Factoring companies also tend to look more favorably when there is an diversified client base, because it can be more riskier to count on a payment from just one or a few clients.

A trucking company’s customers’ creditworthiness and their reliability when making payments on time will also be a consideration when a Transport Factor considers providing Factoring.

A Transport Factoring company may agree to cover some invoices but not all of a trucking company’s clients when certain customers appear to be too risky.  

If a trucking company only needs a certain percentage of each invoice upfront to keep their business running, there are times when they can get a lower rate by only asking for an advance of 85% – 95% of each invoice until the invoice is paid. 

For business owners with a fleet, ten or less trucks they can get the cash flow they need to cover their operating and growth expenses while outsourcing their billing process thus saving on labor costs while then using the increase in cash to grow their business.

The Transport Factoring company handles all the back-office tasks and the billing and collections of clients’ accounts receivables.

The trucking company can then focus on what they do best operating their business.

Transport Factoring exists to solve a common problem faced by trucking companies and freight brokers: customers/clients typically take sixty to ninety days to pay their bill to a trucking company.

The trucking company has to pay employees, buy fuel, and and keep up all their necessary equipment maintenance.

Having the money they need to operate their business is a very essential matter.

Everything from when they purchase fuel to making payroll to paying their taxes, all these things have to be paid right away, or their trucking company is going to be brought to a sudden grinding halt.

This is the main reason that every small to medium-sized trucking company struggles with cash flow and accounts receivable collection problems and this can keep their business from expanding or even running efficiently. 

Banks consider trucking company accounts receivables to be a sort of financial paper which is “too risky” for a Bank loan, but a Transportation Factoring company sees these invoices as collectible debt and an asset that’s worth their risk. Credit Unions never loan money to businesses.

Transport Factoring can help small and mid-sized trucking companies manage their account receivables and also their cash flow.

Remember Transport Factoring is not lending.

The Transport Factoring company – the Factor purchases invoices for a profit.

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