Why Work With a Professional When Factoring for Trucking

May 16, 2023

Thanks to the fluctuating economy, it’s more important than ever to maintain a healthy cash flow for your business. One of the most effective solutions for managing your company’s finances is partnering with a factoring company. But what is it, and why should you work with one?

This article will explain everything you need to know about factoring for trucking and why you should work with a professional.

What is a factoring company?

A factoring company is a type of financial services provider that purchase unpaid invoices from companies, giving them a percentage of the invoice value upfront and then collecting the total amount directly from the customer. This allows companies to receive an immediate cash flow without waiting on customers to pay their invoices, which can typically take weeks or months. Factoring companies charge fees for their services, which generally ends up being a percentage of the invoice value.

How does it work?

Factoring companies receive unpaid invoices in exchange for cash, which is used to typically fund business growth and pay expenses. Cash advances can help soften the financial blow of late customer payments. Here’s how factoring services usually work:

  1. Submit your unpaid invoices. Most factoring companies accept any unpaid invoices and then asses their eligibility. If you have a limited credit profile or a history of delinquency, a factoring company may turn you away.
  2. Receive an advance on your invoice. You can typically expect a factoring advance rate of 80 to 90% of each invoice’s value within a few days of submission. However, remember that the timing of your deposits and how much is advanced will depend on your history.
  3. Collect payment for outstanding invoices. Monitor and collect your customer payments and work to resolve any disputes that happen.
  4. Receive the remaining portion of your unpaid invoice. After collection, your factoring for trucking company will likely take their factoring fee and pay out the rest of the remaining invoice to you.

Reasons to work with a professional when factoring for trucking

There are several reasons to work with a professional when factoring for trucking. These include the following:

  • Getting your invoices paid quickly. The best factoring for trucking companies approve your application within one to two days so that you can receive your hard-earned money with little to no delay.
  • Access capital to grow your business. Business owners often have to make sacrifices when it comes to growing their company. But factoring for trucking companies can help set you up for success so you never have to pump the breaks on growing your business. The reason is that factoring companies can help improve your cash flow, ensuring you can pursue growth, pay debts, and cover expenses without selling any equity in your company.
  • Take the guesswork out of invoices and payments. Delinquent customers and constant late payments can hurt your business both short-term and long-term. Professional factoring companies help you avoid any of these damages by providing cash upfront, so you can avoid making any late payments.

Get in touch for help!

Don’t put off getting accounting and invoice factoring services for your business any longer. Contact us at BP Financing, and we’ll make sure that you have the money you need to meet your upcoming financial obligations. We offer invoice factoring services to businesses that need money sooner than their clients can pay out invoices. Give us a call at 845-352-3700 or send a message using our online contact form. We want to help you make sure your business is financially secure even before your clients pay you.