Freight factoring is a process used to easily manage the flow of cash in your trucking business. It is very important because how you manage your funds can make or break your business. Freight factoring allows you to get the money you are supposed to earn in advance to help you continue with your business. There is no denying that the money involved to run a truck company is huge.
What happens if you run out of money because all your customers have not yet completed their payments? Freight factoring can help you by getting a third party company to collect the bills for you. In effect, you will be able to receive the payment sooner compared to without freight factoring.
The volume requirements of the delivery also affect how efficiently you can use the money you will earn. If you are delivering high volumes of goods, it means that the money involved in the delivery is also very large. What will happen if that high volume delivery is not paid on time? It will render your company paralyzed. With freight factoring, you will not worry about high volume deliveries. No matter how large the payment you are waiting for, you can be sure that you will get the money right on time.
In the shipping and transportation/trucking business, having money at all times is imperative. Without money on hand, you will not be able to fuel or maintain your vehicles. The profitable delivery rotation will be put on hold. Every day you wait is equivalent to hundreds or thousands of dollars wasted. Money is needed to keep the cash flow on the move. As long as you have money on hand, you will be able to continue shipping other deliveries.
After booking your load, you can submit the details of your customer, load and rate of delivery to the factoring service. Once load factoring is approved, you can now pull the load. The moment you need the cash, all you need to do is email the factoring company regarding your cash request. Within 24 hours, the factor company will deposit the money that you need directly to your bank. After your customer has paid, you will receive the remaining money that you have not yet used.