More often than not, truck owners face the reality of not receiving payment for their delivered loads for 30 days or longer. The struggle is real when it comes to cash flow in the trucking landscape. Factoring is not a new topic within the industry but finding a good factoring company can be just as big of a struggle. But, that’s a discussion for the future.
There are different benefits to factoring that every truck owner can utilize. This article alone dives into those benefits and helps you get a better understanding of why factoring exists. Let’s talk about them.
1. Bringing in the Cash
One of the top benefits in factoring is the access to fast funds. Face it, in today’s world the majority of the American population can’t afford to sit around and wait to be paid for a job completed a month prior. iThrive’s factoring allows for a cash advance up to 98% of your invoiced amount for the delivery you completed within 24 hours.
Related: iThrive | FAQs
2. Say Goodbye to Payment Hurdles
Whether you have worked with the customer you’re delivering your load too or not, things can always pop-up delaying payment even longer. When you work with a factor, the factor takes on the responsibility of collecting payment from your customer. In short, you don’t have to worry about jumping through hoops or sitting on your hands due to paperwork headaches or just the customer dragging their feet.
3. Flexibility at Your Fingertips
Unlike traditional loans where you are tied to rigid terms, freight factoring is built to bend and flex to your needs. Factoring has your back without chaining you to a mountain of debt.
Avoid Long-Term Contracts: Working with factoring companies allows you to avoid long-term contracts. Using quality factors lets you use the benefits only when you need them. It’s best to thoroughly review a factoring agreement before committing to a factor.
4. Fueling Growth and Expansion
Growing a business is challenging because as your business grows so do the expenses. Factoring is a great way to help manage the cash flow and prepare for future growth With improved cash flow you are able to pay the expenses due today and set aside the funds necessary for future growth, such as a down payment on new equipment. Some factoring companies may even help with financing for a new truck, trailer, or insurance premiums to help you with your expansion.
5. Navigating Risks and Uncertainties
The trucking industry isn’t immune to the volatility of the economy or unexpected setbacks like breakdowns, and delayed payments from clients. These setbacks can cause disaster for truck owners, because time is money and the longer it takes you to get your wheels turning or money in your bank account, the more it costs you as a business owner.
Now a factoring company can’t prevent a truck breakdown, but they can help you pay for that breakdown because you won’t be waiting 30 days to get paid for work you’ve already done. Imagine, you’ve hauled three loads in the past two weeks and your truck blows a clutch. If you’re factoring the money to pay for that clutch is already in your bank, which means you can get back on the road faster. If you’re not factoring you might have to wait two more weeks to get the funds to make that repair, which costs time, which costs you money.
6. Managing Administrative Processes
Managing invoices, chasing payments, and reconciling accounts can be cumbersome tasks that take valuable time and resources that would be better suited for your core operations. Freight factoring simplifies these administrative burdens by taking on the role of chasing collections, handling paperwork, and making follow-up calls. Factors also take on the role of solving any disputes that happen to appear.
7. Free Customer Credit Checks
There is always a risk when you work with a new broker regarding their reliability when it comes to payment. At iThrive, a credit assessment is completed allowing you to see their history of timely payments. Which gives you the power to make a good decision for your business.
Factoring isn’t just a financial tool— it’s a ticket to smooth sailing in the world of trucking. By partnering with a factoring company you have the complete freedom to continue hauling more and more loads with the stress of whether or not you can pay your bills and expenses.
iThrive Funding has been a trusted factoring partner for over 10 years and have provided outstanding service to thousands of customers. If you’re looking for a company that still believes in taking care of their customers with honesty and integrity, click the link below to get started.
Related: Kash vs. Richard a Tale of Two Truckers
Related: How To Establish and Maintain Good Relationships as an Owner Operator
Related: Freight Factoring Benefits
