Various Styles of Invoice Factoring for Trucking

Various Styles of Invoice Factoring for Trucking

The number of different types of factoring is extensive. Factoring companies have created varying facilities to meet the needs of numerous industries.

The number of different types of factoring is extensive. Factoring companies have created varying facilities to meet the needs of numerous industries.

The number of different types of factoring is extensive. Factoring companies have created varying facilities to meet the needs of numerous industries. These divergent types of Invoice Factoring can differ widely, depending on their intended use. To keep this information relevant to the trucking industry, we will discuss the types of factoring that are pertinent to transportation companies.

Types of Factoring include:

  • Factoring
  • Spot Factoring
  • Factoring Line of Credit
  • Freight Factoring

General Account Receivable Factoring:

General Account Receivable Factoring is the most all-purpose form of factoring. It is most often employed by manufacturing, import/export companies and staffing agencies to name a few. Usually, advances are 75% to 90% of the face value of the invoice.


Spot Factoring:

Spot Factoring is the selling of a single or one-off invoice to a factoring company. It is ideal for businesses that receive one-off orders or that choose to fund only their largest receivables when cash flow is required. It is basically a pay-as-you-go facility which only carries a cost when money is advanced. Spot factoring is rarely available to transportation companies as it is intended for companies that issue invoices in smaller amounts, but in larger dollar values.


Factoring Line of Credit:

A Factoring Line of Credit facility is A/R based and performs very similar to, but with greater flexibility than a commercial operating line of credit, which is asset based. It provides a line of credit equaling a percentage of the combined book of accounts receivables owed to the client. The line can be drawn on as needed and fees are applied only to funds drawn plus a small administration fee to manage the accounts receivables. This particular form of factoring is extremely cost effective and beneficial to large fleet operations that have a robust in-house AP department to manage the facility.


Freight Factoring:

Freight Factoring is a particular form of invoice factoring designed specifically for transportation companies.

Freight Factoring is a particular form of invoice factoring designed specifically for transportation companies. To meet the needs of a demanding industry, freight factoring provides easy qualification, fast funding, easy document submission and ease of use. Factoring fees range depending on the factoring company, but typically are much more competitive than general accounts receivable factoring fees.


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