Understanding The Basics of Freight Factoring
If you are a trucking business investigating freight factoring companies, this guide is designed specifically for you. The information presented in this guide provides much more than theories and suggestions, it identifies the critical information you need to assess a factoring company. It provides a step by step process for making an informed decision when choosing the best factoring company for your trucking business. Use the Table of Contents, located on the right, to access more articles to learn about freight factoring and how to choose a factoring company for trucking.
Owners of trucking companies are diverse and manage their businesses differently. Perhaps you are a road warrior who has chosen to operate your own freight carrier service rather than haul for someone else. You may be a fleet owner or manager with an accounting or other professional background. Or perhaps you are a freight broker with a start-up business to manage. No matter your situation, if you are operating a business in freight transportation, you need reliable access to working capital to sustain operations and support growth.
Freight factoring is a specialized form of invoice factoring designed specifically for the transportation industry. It has emerged as a mainstream financial strategy for trucking companies to improve cash flow. As it is a specific form of accounts receivable factoring, it will be referred to throughout this series of articles as either “freight factoring”, “freight bill factoring” or it’s more general term “invoice factoring”. In essence, it’s the selling of account receivable invoices at a discount in exchange for immediate cash. Although used extensively throughout the course of history and well ingrained in today’s global economy, the practice of invoice factoring is vaguely recognized and often poorly understood. The benefits are potentially extensive, but the anguish resulting from choosing the wrong invoice factoring company to work with can be equally devastating.
The decision to start factoring freight bills to gain immediate access to working capital is a sound business decision. The process of selecting the right factoring company for your trucking business requires a planned strategy and careful consideration. The following series of articles will provide you the ultimate guide to choosing the best freight factoring company for your trucking business.
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