Frequently Asked Questions
What is factoring?
Factoring is a financial service where one party, the trucker, sells an invoice or receivable to another party, the factor. The factor purchases the legal right to collect on the invoice, and then advances money to the trucker at a discount off the face value of the invoice. Factoring is an alternative to traditional financing for trucking companies that gives them consistent cash flow without going into debt.
Why would I want to factor my freight invoices?
When you factor your freight bills, you get paid immediately for the money you are owed. The trucking business is challenging because you are paying for fuel, tires, repairs and payroll on a regular, and in some cases, daily basis. Yet your customers generally pay you in 30-60 days. This timing difference between your cash inflows and outflows creates problems in trying to effectively run a trucking company. By factoring, you get steady, consistent cash flow so you can focus on making money rather than worrying about your bank account balance.
What is the difference between recourse and non-recourse factoring?
Recourse factoring is a form of factoring where you sell your invoices but still assume the risk of your customer paying the invoice. If your customer doesn’t pay the invoice, you will be required to pay the factor for the unpaid invoice. Non-recourse factoring is a type of factoring where the factor bears all the risk of collecting payment. If your customer doesn’t pay the invoice, you are not liable to the factor for the unpaid invoice. Since the factor carries less risk with recourse factoring, recourse factoring usually has lower rates. However, you should carefully consider whether recourse or non-recourse factoring is right for your business because every trucking company is different.
What do you need from me to get set up with Freight Finance?
You will need to complete our application form that provides us basic details about your trucking company, your experience in the industry, trade references, and your financial needs. We also require that you submit a W-9 Form, a certificate of insurance, your motor carrier authority and a copy of your CDL with your application.
Do I need to have motor carrier authority?
We do require that you have motor carrier authority either with the USDOT for interstate loads, or with your state for intrastate loads. Your authority must be active for us to factor your freight bills.
How fast can I get set up for factoring with Freight Finance?
We can generally get you set up to factor with us in as little as 24-48 hours. In some cases, we can get you set up the same day. However, if you have obligations to another factor or financial institution that required liens or a UCC filing, the process can be delayed.
How fast will I get paid when I factor a freight bill?
We can pay you the same day for any invoice received by 2:00 pm. A same day wire payment, as well as payments using Comchecks or EFS checks will incur an additional fee. However, ACH or direct deposit payments, which will be in your bank account the next business day, are free. We can also fund your money the same day on a fuel card for free.
How do I get paid?
We can fund your invoices using same day wires, direct deposit, Comcheck, EFS check, a fuel card, or regular paper check. Same day wires, Comchecks and EFS checks will incur additional fees.
Do you require original paperwork for funding?
We will gladly fund your invoices using emailed, faxed or uploaded files through our online Client Access Portal (CAP). We do require that you also mail the original paperwork to us within 5 business days so we can bill your customers that require originals for payment.
What should I do if I am currently factoring with another factoring company?
Generally, we can help you switch factors and sign up with us without any trouble. However, if you are currently factoring with another factoring company and want to switch to Freight Finance, the first thing you should do is review the agreement with your current factor and determine if you can terminate the agreement and if there will be any termination fees. If you choose, Freight Finance can review your current agreement to help you analyze the conditions for terminating your current factoring agreement. If you decide to switch, Freight Finance works with other factoring companies to ensure that the transition is smooth and pain free.
Do I have to factor all of my invoices?
No, you are not required to factor all of your invoices with us. However, once we factor one of your loads that you do for a particular broker or shipper, that broker or shipper is given notice that all payments must come directly to Freight Finance.
Do you have any monthly volume or invoice size minimums?
No, we do not have any monthly volume or invoice size minimums.
Do you provide fuel cash advances?
Yes, we provide fuel advances up to 50% on any shipment you have already loaded for a fee. However, we will not do a fuel advance on a load that you have received a previous fuel advance on from the broker or shipper.
Do you have a fuel discount card program?
Yes, we have a free fuel discount card program that will save you money on fuel, tires and other repairs and maintenance on your truck and trailer. The fuel cards are free, but there are some usage fees charged by our partner company who manages the fuel card program.
Will my factoring fee ever change?
Once you sign up with Freight Finance, your factoring fee will never be higher than what was agreed to in the contract. In certain cases, we may lower your fee based on your volume and other factors.
Will I have online access to my account?
Yes, we have a free online Client Access Portal (CAP) that allows you to monitor and manage your account 24/7 from your mobile device or computer. Through our CAP, you can submit loads for factoring, do credit checks on prospective customers, and view your account activity.
What makes Freight Finance better than other factoring companies?
We are better than our competition because we offer better factoring solutions with the best service in the industry. We only work with truckers, and we are good at it. We truly care about your success and do everything we can to help your business achieve maximum profitability.