A freight factoring company is just like any service provider; you check them out to see which ones can give you what you need for the best possible deal. And just like with any service provider, they are not all created equal. There are some things that you need to consider so that you will get the greatest possible benefit from a service that will potentially keep you out of the doghouse. Below are the 4 that you really should look into.
Some factoring companies require a minimum volume per month i.e. X number of invoices or require that they factor all invoices for a particular client in the future. Some such as TBS Factoring have no volume or long-term commitment requirement, so you can pick and choose the invoices you want to factor and when. In most cases, it pays to work with a freight factoring company that lets you run your business the way you want.
There are freight factoring companies that know everything about money but understand little about the trucking business, and that can be a problem because they don’t know the peculiarities of industry demands. This can affect how their programs are designed and may not offer the best solutions for truckers. Find a company that is endorsed by the local trucking association because in all probability they know the industry.
Your freight factoring company should offer free fuel cards. This can translate to considerable savings in the form of rebates and discounts when used in accredited establishments that cater to the trucking industry, including gas stations.
Your factoring company should offer you the option of non-recourse factoring programs. This means that the factoring company takes on all the risks of payment collection. You pay higher fees but you can set and forget. The alternative is recourse factoring, where the factoring company can demand that you make good on an invoice that they could not collect payment for.
It is important to remember that a factoring company makes money from you, so you don’t owe them any gratitude for bailing you out of trouble. Choose well and carefully so that you get the most out of freight factoring.Read More