A Guide to Freight Factoring For Trucking Companies - From BP Financing

January 16, 2020

One of the most difficult issues for most small businesses is the challenge of getting paid on time. Customers and clients occasionally have difficulty coming up with money, or wait until the last opportunity to pay for a variety of reasons.

Regardless of the obstacles, delayed payments are huge inconveniences for any business.

Freight trucking companies often face even bigger problems. Owning and operating a vehicle or a fleet requires constant financial support. Gasoline and road expenses combine with other costs and make profit margins seriously narrow.

Often, on paper, a freight company should bring in enough money to pay for expenses and eke out a small profit. Where the rubber meets the road, however, clients and customers pay late, in part, or not at all, and this harms cashflow.

We suggest that transport companies consider freight factoring services to help ensure ready cash when your enterprise needs it.

What Is Factoring?

At BP Financing, we work with our clients to take the risk out of accounts receivable. Our team assumes the debt of your customers or clients and pays a certain percentage, often between 80 to 95 percent, directly to you. This is not a loan, but the vast majority of sum owed to you. You then walk away with the money, while we chase your invoice.

You do not have to pay this money back, nor will you owe interest. This is your money, earned by your company, available for whatever purpose you have in mind.

Next, we collect the bill. When the customer or client pays in full, we remit the rest of the balance to you minus our fees for collection.

Some companies turn over problem accounts to us while others retain our services for all accounts receivable. In some cases, a company will enjoy higher net revenues than if they hired an in-house team to handle accounts receivable.

Why Should Truck Companies Consider Factoring Services?

Truck and freight company owners enter the field because they have wide knowledge and a strong skill set in transportation, supervising drivers, and more.

Not everyone, however, brings business administration skills to owning a company. In inexperienced hands vital information can get confused, bills may not be written up or sent properly, and you can lose money.

Even worse, the time spent in taking care of these necessary tasks distracts owners and staff from core business functions. Factoring eliminates this inefficiency.

How Factoring Benefits Freight Handlers

The biggest benefit of freight factoring is reliable cash flow. With help from a factoring company, your business can plan for expenditures knowing that revenues will come in on time and as planned. No more stress and anxiety waiting for a client or customer to pay up so that your company can take care of its own obligations.

BP Financing has extensive experience working with trucking, transport, and freight companies. We understand the business thoroughly and can provide factoring solutions that will keep your business going.

All factoring does is to allow BP Financing to assume your bill collection work and risk in exchange for a reasonable fee.

Reach Out Today

Learn more about how factoring can help your business concentrate on core functions and get paid on time. We may even save you money in the process. Call today if you have any questions. Our friendly and expert staff will be happy to provide answers or to set you up for an appointment.

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