You’ve been thinking about freight factoring
a lot, especially since you started seeing ads for it pop up everywhere. But as you think about it more, you wonder if there’s any real benefit.
“Freight factoring seems good, but will it really help?” If this sounds like you, we understand. Freight factoring
can seem really great, but unless it provides a real benefit to you and your customers, why bother with it? For a lot of reasons, actually. Below we’re going to go over the benefits of freight factoring
and how it can help you.
Make Late Payments a Thing of the Past
All you have to do is send over the unpaid invoice and the factoring company will pay a portion of it.
So, How Does Freight Factoring Work?
can appear complicated, but it’s really rather simple.
To help explain the process, let’s suppose that you manufacture washing machines. Everyone loves them. So much so that you get orders around the clock. You put them on trucks and deliver
. This is working really well until you hear something you wish you didn’t:
“I”m sorry; I just can’t pay you yet.”
You could really use the money, but you don’t feel comfortable pressing people. That’s not how you want to run your company. However, as you’re starting to find out, that’s also not how you make any money.
So how can you keep your business afloat and keep the good vibes with customers? Hire a freight factoring
All you have to do is send over the unpaid invoice and the factoring company will pay a portion of it. It’s usually about 80% of what the invoice is worth. Then, the freight factoring company you gave the invoice to will contact your customer for payment. You’ll get the rest of the invoice paid, minus a small fee from the factoring company.
Get Cash When You Need It
One of the biggest, if not the biggest, benefits of freight factoring is that you’ll never have to wait on payment.
Imagine this a moment: You have two trucks in your fleet. They are both solid workhorses. Then, suddenly, one truck needs repairs
. If you don’t fix things quickly, you’ll miss delivery dates. You were super close to adding a third truck to your fleet
, but with no way to keep things running, you’ll have no money to add anything, much less a new truck.
Enter freight factoring.
If you use freight factoring regularly you’ll never have to wonder when the money will come because it will already be there. You’ll a such a constant stream of cash that you could repair anything as needed, or even expand your fleet. Yes, you read that right. freight factoring
provides an income so steady that if you need to buy another truck
, or two for deliveries, you could!
Get the Cash You Need!
See Which Customers to Trust
Another big benefit to freight factoring
is credit checks. Let’s say you have one customer that never pays on time. You’re not one to pester people so you let them be. Here is where a fright factoring company can help.
They can go over your entire customer list and run their business credit scores. Why? So you’ll know which customers you can trust, and which customers you probably shouldn’t work with. That way, you won’t waste any more time on customers that can’t pay.
Freight factoring frees up your calendar so you can focus on more important tasks.
Ensure You Get Paid
Have you ever had a great customer suddenly pay late? They’ve always paid on time in the past, but recently their invoice payments are coming later and later. You want to give them a break, but you also want to get paid. So what can you do?
Let the freight factoring company call for you.
“Why would they do that?” you ask. For one reason: money.
As you recall from the first section of this blog, freight factoring only works on the basis that the customer eventually pays. And the only way to ensure the customer pays is to remind them. Having the factoring company handle that does two things:
- First, it frees up your calendar so you can focus on more important tasks.
- Second, it frees you from making the awkward payment call.
See, when you deal with people on a regular basis you get to know them. A lot of times this a good thing. You want a pleasant relationship with the customers you deal with often. However, if you get too friendly with them it might make asking for payment awkward. Especially when a customer’s payment habits change. Having a freight factoring company on hand removes this awkwardness so your relationship with customers is nothing but smiles.
Contact First Capital for Freight Factoring Today!
Are you a growing company with bills to pay? Are you looking to expand your business but need a flowing stream of cash instead of a trickle?
Call us today at 888-565-6692
or contact us
online. We will get the information we need from you, answer any questions you may have, and thoroughly explain the entire freight factoring process. Hopefully, as you ease your mind, we will be able to help you take care of your slow cash flow situation and get you on your way.