Answering Your Top Trucking Factoring Questions

Trucking Factoring Questions

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 34 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 FAQs section below.

What is factoring?

Freight factoring, also known as invoice 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?

There are two types of factoring available to carriers.

Non-Recourse Freight Factoring: takes on the credit risk. Should the account fail to pay due to a financial reason, not carrier performance, 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 and return with the following:

  1. Copy of your FMCSA authority letter. You can click here to see if it’s been granted if you are not sure.
  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. (Email to [email protected])

We will process for approval and send out the factoring agreement and other forms. It’s very possible you could get approved and funded all in the same day, but normally within 24 hours.

Will my company be bound to a long term contract?

We do have month-to-month agreements.

However to get the absolute lowest fee you also have the option to enter into an annual agreement with us.

Can I submit my paperwork anytime?
Our system allows you to submit 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 freight loads for that account until is paid in full with that account.
Are startups eligible for freight invoice factoring?
Yes, start-ups are eligible for freight invoice factoring! We love helping new carriers get on their feet!
Is there a minimum amount of loads I have to factor each month?
No, never! However, by factoring more of your freight, you may be eligible for a better rate.
How fast can I get paid?
Same day funding provided all documents required for billing are received by 1 PM EST and are verifiable.
How do I get paid?
You have a variety of Payment Options

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

Direct Deposit: This transaction usually credits your account the next banking day, may take an additional day for final credit. Service charge is $7.00.

Wire Transfer: Our charge for this service is $20.00 plus any fees your bank charges you to receive funds.

Still interested in learning more? Have a look at our freight factoring guide to get the a to z fundamentals.