Maintaining a healthy cash flow is vital to being a successful trucking broker in today’s economic climate. However, with carriers that need to be paid on time and shippers that expect you to wait a minimum of 30 days after you invoice before they pay you, maintaining positive cash flow is easier said than done. Some shippers will even push you to wait for 60 or 90-day terms if they can. There isn’t much room for error already, but accounts receivable processes like this make it more difficult for you to pay your business expenses, which puts your business at risk. There is a light at the end of this dark tunnel: Freight Broker Factoring. This type of invoice factoring, specifically targeted at freight brokers, makes it easier for you to get paid on time without compromising your business relationships.
How it Works: The Factoring Process for Freight Brokers
Nearly all companies rely on cash flow solutions from time to time. Large trucking brokers have access to banks and other sources for working capital, but the average trucking broker is often denied access to these traditional lending solutions. The reason usually comes down to poor credit history or the length of time they have been in business. While this would ordinarily put you at a disadvantage, freight factoring programs can fill the gap so that you have access to working capital when you need it.
Freight Broker Factoring is a Five-Step Process
- Set up your factoring account. You’ll need to have some basic information about your business and the companies you invoice.
- Book and dispatch as you normally would. However, you’ll have the security of knowing you’ll be paid right away for the load.
- Invoice your shippers. Your invoicing process can remain the same. You don’t need to change your terms.
- Send your unpaid invoices to the factor. In today’s connected world, you can send a digital copy of the invoice and the factoring company will receive it right away. This is your signal to your factoring company that you’d like them to purchase your invoice. You can send one of them or all your invoices. You can also use factoring all the time or just when you foresee a cash flow shortfall. It’s a flexible solution, so it’s up to you.
- Get Paid Fast and get your carriers paid fast. We provide same-day funding and, as a bonus, you will have the option to use our Carrier Quick Pay Services. It’s simple: Each time your carriers select quick pay, they get paid on the spot and you increase your bottom line by earning prompt pay discount fees.
Benefits of Factoring for a Freight Brokerage Company
Now that you’re familiar with the process, you’re probably already catching on to some of the benefits, but it goes much deeper than you’d expect.
Immediate Cash Flow and Access to Working Capital
The biggest reason truck brokers choose factoring is because it provides immediate cash flow. Instead of waiting 30-90 days for payment, you can get cash in hand the same day you invoice a shipper.
Approval is Determined by the Credit History of Your Customer
The approval process is a lot easier for freight broker factoring for a traditional loan because the factoring company is more concerned with the history of your customer. You can get approved even if your business doesn’t have a good credit score or hasn’t been around long. You can get approved even if you’ve been denied a bank loan too.
Better Cash Flow Improves Business Growth with Available Funding
When your shippers pay slowly, they don’t just make it difficult to pay your carriers. They make it harder to run your business. You might not be able to give a carrier another load or cover costs like office expenses and marketing. With freight broker factoring, you get paid right away, so you can funnel that cash right into the things that will help your company thrive. Timely payments to your carriers also help build trust and lasting relationships, ensuring you can continue to count on them to deliver time and time again.
Benefits of Working with Charter Capital
Factoring for freight brokers can pave the path to success, but it’s essential to choose the right partner. That’s where Charter Capital takes the lead.
- Same-Day Funding
Your funds can be wired to you almost immediately if need be. With others, you may have to wait days or more.
- No Term Contracts
You have the freedom to choose how long you’re with us. You aren’t required to use our services for any length of time.
- Low Rates
While rates vary depending on volume and other factors, we pride ourselves on having some of the lowest rates in the freight industry. Some of our factoring fees are as low as one percent.
Unlike other companies that will quote a rate and then tack on fees after, you’ll always get transparency with us.
- Dedicated Account Manager
You will always have one main point of contact—someone you can call as needed for assistance or questions.
- Free Credit Checks
Credit checks on your shippers are one of the best ways to reduce delinquency risk. We’re happy to do this at no charge for you.
- Decades of Experience
We’ve been supporting the trucking industry for years and understand the challenges you face. Our freight broker factoring services are tailored to meet your unique needs.
Request a No-Obligation Quote
If you want to explore freight broker factoring in-depth, connect with Charter Capital. Request a complimentary rate quote to get started.