Your Trucking Factoring Questions Answered

Some of you are new to factoring. Factoring is selling your accounts receivables at a discount in order to control your cash flow. According to industry statistics the average timeframe a freight invoice is settled is 36 days. That is a long time to wait to be paid. Please contact us and we will be happy to answer any questions you may have that are not covered in the FAQ’s section below.

Questions

What is factoring?

Factoring is selling your invoices or better known as accounts receivable at a discount in order to obtain immediate cash and better control your company’s cash flow needs.

What types of factoring options are there?

Pay4Freight.com takes on the credit risk. Should the account fail to pay due to a financial reason, not carrier performance, Pay4Freight.com will then take the full loss.

  • Non-recourse factoring: Pay4Freight.com takes on the credit risk. Should the account fail to pay due to a financial reason, not carrier performance, Pay4Freight.com will then take the full loss.
  • Recourse Factoring: The carrier takes all risk of the broker or shipper not paying the factor for any reason, including credit loss. Typically, all recourse factors require the carrier to reimburse the factor in full after 90 days from the initial advance.
How do I sign up, and when can I start?

In order to move forward quickly, we need the application that’s attached completed for all owners over 25% and returned with the following:

  1. Copy of your FMCSA authority letter.
  2. Copy of your current liability/ cargo insurance certificate.
  3. IRS document showing your Federal Tax ID Number
  4. Copy of the principal’s Driver’s License.
  5. Copy of the truck registration for each tractor in your fleet.

Once we receive all the required information we’ll quickly process for approval and sending out the factoring agreement and other forms. It’s very possible you could get approved and funded all in the same, but normally within 24 hours. After that, your funded same day when your loads are received by 12:00 p.m. CST

Will my company be bound to a long term contract?

No, Never! A factoring agreement will need to be signed since a secured financial transaction is taking place. You can stop at any time without penalty. If you ever want to cancel your contract, all we ask is that you give us written notice. We must collect all outstanding receivables prior to full cancellation. Once your outstanding balance is at zero, a release letter is sent to you. There will be a $50.00 fee to cover the cancellation of the UCC filing.

How long is a credit check good for?

When submitting a load for factoring, the debtor (whomever you got the load from) must be credit approved before we will accept the paperwork. Normally a credit check takes only a few seconds; however, direct shippers can take from several hours up to a day to approve. Credit approvals are good for 72 hours. Exceptions to this would be: if we receive a credit alert from our credit sources showing a material slowness in the account’s payment history, non-payment complaints being reported, a loss of broker authority, notice of bankruptcy, or out of business.

Can I fax my paperwork in anytime?

Our system allows you to fax or email in your loads 24/7. However, our cutoff time to get your load into the system for same day payment is 12:00 PM Central Standard Time daily.

Can I have more than one factoring company?

No factoring company will allow this. The reason is that the factoring company must hold first lien position on your receivables. This is simply protecting our interests on the loads we have purchased.

Can I factor all my loads?

You don’t have to factor every customer. Once you have factored an invoice from a credit approved broker or shipper, you must factor all loads for that account until Pay4Freight.com is paid in full with that account.

Is there a minimum amount of loads I have to factor each month?

No, never! However, by factoring more, you may be eligible for a better rate.

How do I get paid?

You have a variety of Payment Options

Comchecks or T-Cheks: These are filled out like any regular check, but requires authorization code that we provide to negotiate the check where it be at any truck stop who accepts them or your bank.

Comchecks: Fee is $4.00 per $1,000 incremental value of the check.

T-Cheks: Fee is $4.00 per transaction on the value of the check.

EFS Fuel Card: We will fund your Fuel Card account at no cost. You obtain the “cash price” at the pump at over 6,000 locations. Each transaction is $3 for fuel and/or cash or Transchecks plus rebates from 2 to possibility 20 cents per gallon at over 1,500 truck stops.

Comdata Data Fuel Card: We will fund your Fuel Card account at no cost. You obtain the “cash price” at the pump at over 6,000 locations, plus 2 to 4.5 cents depending on the truck stop. Each transaction is $3 for fuel and/or cash or put money on to a Comchek. This card can also be used as a debit card and used wherever MasterCard is accepted. Each transaction is $3.

Direct Deposit: This transaction usually credits your account the next banking day, but could take an additional day for final credit. The charge for this service is $5.00.

Wire Transfer: Our charge for this service is $15.00 plus any fees your bank charges you to receive the funds.

How do I send you my original documents per your requirements?

Your original documents are required to in our office within 10 business days after funding. You can use regular or priority mail but it’s not guaranteed to get here on time. We have discounted options available for you to send us your original documents. This would eliminate additional charges.

Discounted FedEx Stamps: The cost of overnight is $18 and second day delivery is $12. No set-up fee is required.

TripPak Service: To send us your documents more officially and least costly, we have secured a discounted rate of $5 per envelope (please one load per envelope) for drop off at any one of 1,600 truck stop locations. This price also includes TripPak scanning now available at more than 525 locations, which includes every TA and Petro location, and 150 Flying J locations. This is a great option if you are on the road for extended periods of time.