For owner-operators and others in freight broker business services, the holiday season is the busiest time of year as there will be more goods to be shipped across the country. Although this brings more profit, on the other hand, it also entails more expenses; fuel, staffing, maintenance.
Cash flow is a necessity for freight companies to continue normal operation; you have to use their cash to cover the shipping expenses. If you’re short on available funding, this is where freight factoring comes into play.
What is Freight Factoring?
Freight Factoring is a method of financial support where owner-operators receive money from a third party (freight factoring company) to cover their trucking expenses. Instead of waiting for weeks or months for customers to pay invoices, truckers get their money right away from the freight factoring company.
Benefits of Freight Factoring
- It’s not a loan. No return of interest. Imagine receiving money, but it is debt-free.
- Fast turnaround time. Applying for a loan from a bank can take more time than you think. All the paperwork and approvals will make your head go round. Freight factoring gives you money quickly.
- Better management of money. Since recipients receive their money firsthand, it will be easy for them to handle it. With money in hand you can continue planning business expansion and reach out to more clients without worrying about expenses.
- Reduced work. Freight factoring companies will track your invoices. This means that drivers don’t waste time chasing money. As a result, you’ll have more time to focus on how to improve your business further.
- Flexible. With freight factoring, truckers have a choice of the number of invoices to factor. If they have enough cash-flow this month, they can set aside factoring the current bills. And when they need money, they can have it with the stability of freight factoring.