| In a business such as transportation, where the | | | | factoring company charges a small fee for the same. |
| productive assets are on the streets and freeways, | | | | Freight factoring rates vary and individual companies |
| away from the owner it is important that the | | | | charge anywhere from 1.5% to 3.5% for 30 days. |
| trucking company owners have a steady flow of | | | | The charges depend on the volume and duration of |
| funds to meet operational expenses. Trucking | | | | transactions. Trucking companies with a history of 60 |
| company owners need cash for fuel, repairs | | | | days transactions are charged a higher fee than |
| breakdowns, drivers, tires, loan/lease installments, and | | | | companies working within 30 day duration. The |
| other day to day expenses. Generally clients of | | | | credibility and the client profile of the trucking |
| trucking company pay their invoices in 30 to 60 days, | | | | company are also determining factors. Trucking |
| depending on the contract, resulting in working capital | | | | companies which have clients that are bad |
| shortfall which truck owners find difficult to | | | | paymasters are generally refused freight bill finance. |
| overcome. | | | | Today more and more freight bill factoring companies |
| Most prompt paying customers still take 30 days to | | | | are offering faster turnarounds as they recognize the |
| clear their dues. In the past there was no option for | | | | importance cash flow in running a successful business. |
| the truck owners but to wait for the payments; one | | | | Freight bill factoring companies set up factoring lines |
| option that is gaining in popularity with the trucking | | | | in a few days. Trucking companies need to present |
| fraternity is freight bill factoring. Freight factoring | | | | proper documentation and prove the credit |
| effectively eliminates the waiting period and gets the | | | | worthiness of their clients, volume and duration to |
| freight bills paid in a few days, sometimes as less as | | | | get the best deal from factoring companies. The |
| two days! The last decade has seen the emergence | | | | presence of stiff competition has forced factoring |
| of freight bill factoring as the preferred choice of | | | | companies to set up factoring lines in less than two |
| truck owners. Freight bill factoring is different from | | | | days if the documentation of the trucking company |
| any other business loan. | | | | is in order. |
| Freight factoring works in a simple way, the trucking | | | | Almost all the major players in the freight factoring |
| company delivers the goods and issues a freight bill. | | | | business have websites that offer instant factoring |
| The freight bill is then sold to the factoring company, | | | | quotes and deals. They also have toll free numbers |
| factoring company pays up to 90%-97% of the | | | | on which truck owners can speak to professionals |
| freight bill to the trucking company as first installment. | | | | and seek advice on the documentation required. |
| The factoring company then waits the remaining | | | | Freight bill factoring is helping truck owners run cash |
| period till the bill is due. Once the factoring company | | | | flow intensive business without worrying about |
| gets paid in full it pays the balance amount to the | | | | payments and this enables them to focus on their |
| trucking company as second installment, however the | | | | core activity. |