The trucking factoring world is about the ability of the trucker to insure his cargo and to be able to assign the credit risk. The two factoring types are the recourse and non-recourse factoring. The recourse factoring means that the truck driver will be the one to take the credit risk and it helps in lowering the fees that is paid to the factoring company. The truck drivers who can take the credit risks of the cargo normally choose this. The non-recourse factoring means that the factoring service company is the one to take up the credit risk. It means that the cargo may not take up the responsibility in case the cargo is not paid because of the credit problems. However, this type of factoring has normally high fees because the trucker will not have any risk.
There are many methods that the company can use to factor its clients and it is important to learn about them. The cash is important for your business and sometime it can be hard to wait for 60 days just waiting for the shippers and the brokers to pay you the money that you have worked for. You can talk to the factoring company to help you in getting the money immediately after sending your invoices.
The factoring company will buy the freight bills and it can pay for the day that you load your truck. You can choose to pay a high pay to get a high initial payment or you can choose to get low money at a low cost. You can use the company services if you are just an independent trucker or if you are a company with many trucks.
The last thing that you should not do as the trucker is to work for the broker who may not pay. The factoring company may also help you to check the credit worthiness of the company before you can load its cargo. The company ensures that you have all the important information before you can make the business decision for that company. The set up of your account with the factor company is free and it can take up only 48 hours to get money. What you have to do is to send the invoice and the proof of delivery before the money is sent to you. Everything will be easier.
When it comes to the truck factoring, you have to remember that some businesses may fail because they have run out of the cash. From a time to another, some businesses even if they may be successful, they may suffer the shortage of the cash. The problem is that many people think that the only place where they can get the money is from the banks and they forget about truck factoring company. This financial help has become the backbone of many companies, but it is still unknown to most business people because it is not a relatively new way to get money but it is not taught in schools. Many truck drivers have now become aware that they can fight off the ups and the downs of the cash flow by factoring their freights.
