Factoring Company for Trucking: How to Choose the Best

Factoring is a financing option that allows trucking companies to sell their unpaid invoices to a third-party company, called a factor, in exchange for immediate cash. This can help trucking companies improve their cash flow, cover operational expenses, and grow their business.

However, not all factoring companies are the same. There are different types of factoring, such as recourse and non-recourse, different rates and fees, different contract terms and conditions, and different benefits and services. Choosing the wrong factoring company can result in hidden costs, long-term commitments, or poor customer service.

Therefore, it is important to do your research and compare different factoring companies before signing a contract. In this article, we will review some of the best factoring companies for trucking and provide some tips on how to choose the right one for your needs.

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What to Look for in a Factoring Company for Trucking

When comparing different factoring companies for trucking, you should consider the following factors:

• Rate: This is the percentage of the invoice amount that the factor charges as a fee. The rate can vary depending on the invoice value, the customer risk, the industry, and the volume of invoices. A lower rate is better, but you should also be aware of any additional fees or charges that may apply.
• Advance: This is the percentage of the invoice amount that the factor pays upfront. The advance can range from 80% to 100%, depending on the factor and the invoice. A higher advance is better, as it means more cash in your pocket.
• Funding speed: This is how fast the factor pays you after you submit an invoice. Some factors offer same-day or next-day funding, while others may take longer. A faster funding speed is better, as it means less waiting time and more liquidity.
• Recourse vs non-recourse: This is the type of factoring agreement that determines who is responsible for the invoice if the customer fails to pay. With recourse factoring, you are liable for the invoice and have to repay the factor if the customer defaults. With non-recourse factoring, the factor assumes the risk and cannot collect from you if the customer defaults. Non-recourse factoring is more expensive, but it offers more protection and peace of mind.
• Contract terms: This is the duration and conditions of the factoring agreement. Some factors require long-term contracts, monthly minimums, volume limits, or termination fees. Others offer more flexibility and allow you to factor on a per-invoice basis, with no commitment or penalty. You should look for a factoring company that suits your business needs and goals and does not lock you into unfavorable terms.
• Customer service: This is the quality and availability of the factor’s support team. You should look for a factoring company that has a dedicated account manager, a responsive and friendly staff, and a 24/7 online portal. You should also check the factor’s reputation and reviews from other trucking companies, and avoid any factors that have a history of complaints or disputes.

Best Factoring Companies for Trucking

Based on our research and analysis, here are some of the best factoring companies for trucking that offer competitive rates, high advances, fast funding, flexible terms, and excellent customer service:

• OTR Solutions: This is a factoring company that specializes in small- and midsize trucking companies. It offers a true non-recourse factoring solution, with a 2% rate, a 100% advance, and same-day or instant funding. It also provides a fuel card, tax assistance, equipment financing, insurance, and a partnership with DAT TruckersEdge. It has a mobile app and a 24/7 online portal, and it does not require any monthly minimums, volume limits, credit restrictions, or long-term contracts. It has a top-rated customer service and a high customer satisfaction rating.
• Riviera Finance: This is a factoring company that has been in business since 1969 and has over 20 offices across the US and Canada. It offers a true non-recourse factoring solution, with rates starting at 0.675%, advances up to 95%, and same-day funding. It also provides a fuel card, credit checks, collections, and invoice management. It has a friendly and professional customer service and a high customer retention rate.
• eCapital: This is a factoring company that offers immediate funding and a revolving line of credit. It has rates starting at 0.5%, advances up to 90%, and funding within 24 hours. It also provides a fuel card, a mobile app, and a 24/7 online portal. It has a simple and transparent application process and a flexible and customized factoring solution. It has positive customer feedback and a BBB accreditation.

CONCLUSION

Factoring is a service that can help trucking companies improve their cash flow and reduce their administrative burden. However, not all factoring companies are the same, and choosing the best one for your needs can be a daunting task.

FREQUENTLY ASKED QUESTIONS:

What are the benefits of factoring companies for trucking?

Some of the benefits of factoring company for trucking are:

• • You can get paid within 24 hours or less, instead of waiting for 30 to 90 days for your customers to pay.
  • You can improve your cash flow and working capital, which can help you cover your expenses, such as fuel, maintenance, payroll, and taxes.
  • You can avoid taking on debt or paying interest, as factoring is not a loan but a sale of your invoices.
  • You can save time and resources on invoicing and collections, as the factoring company will handle them for you.
  • You can access other services and perks from the factoring company, such as fuel discounts, credit checks, equipment financing, and online tools.

How to choose the best factoring company for trucking?

There are many factors to consider when choosing the best factoring company for trucking, such as:

• • The factoring rate and fees: The factoring rate is the percentage of the invoice amount that the factoring company will charge you for their service. The fees are the additional costs that the factoring company may charge you for processing, wire transfers, credit checks, etc. You should compare the factoring rates and fees of different factoring companies and choose the one that offers the best value for your money.
  • The advance rate and reserve: The advance rate is the percentage of the invoice amount that the factoring company will pay you upfront. The reserve is the difference between the invoice amount and the advance rate, which the factoring company will hold until your customer pays the invoice. You should look for a factoring company that offers a high advance rate and a low reserve, so you can get more cash in hand and less money tied up.
  • The contract terms and conditions: The contract terms and conditions are the rules and obligations that you and the factoring company agree to follow when doing business. You should read the contract carefully and understand the details, such as the contract length, the termination notice, the minimum volume requirement, the recourse or non-recourse option, the hidden fees, and the penalties. You should look for a factoring company that offers a flexible and transparent contract that suits your needs and preferences.
  • Customer service and reputation: Customer service and reputation are the quality and reliability of the factoring company and how they treat their clients. You should check the reviews and ratings of the factoring company from other trucking businesses and industry experts. You should also contact the factoring company and see how they respond to your questions and concerns. You should look for a factoring company that has a good reputation and provides excellent customer service and support.

What are some of the best factoring companies for trucking?

According to some sources, some of the best factoring companies for trucking are:

• • TruckSmarter: This factoring company offers a flat 2% rate, a 100% advance rate, a TruckSmarter Visa Card with 1% cash back, and a mobile app that can be used to get fuel discounts up to $1.50 per gallon with no transaction fees. It also has no monthly minimums, no additional fees, and a monthly contract that can be terminated with 30 days’ notice.
  • Transportation Management Group: This factoring company offers truck factoring rates starting at 0.675%, a 100% advance rate, and fuel card, equipment financing, and small credit lines. It also has no monthly minimums and no long-term contract.
  • Apex Capital: This factoring company offers custom rates based on your needs, a 100% advance rate, and a proprietary Blynk payment service that allows you to get paid within minutes via debit, Zelle, or bank transfer. It also factors freight invoices on nights, weekends, and holidays, and provides a fuel card, a mobile app, and other online tools.
  • TAFS: This factoring company offers competitive rates, a 100% advance rate, and a TAFS Elite Fuel Card that can save you up to 55 cents per gallon at over 14,000 locations. It also has no long-term contract, no monthly minimums, no hidden fees, and a dedicated account manager.
  • RTS Financial: This factoring company offers low rates, a 97% advance rate, and a fuel card that can save you up to 50 cents per gallon at over 1,800 locations. It also has no long-term contract, no monthly minimums, no application fees, and a fast turnaround time.
  • TBS Factoring: This factoring company offers flat fees, a 100% advance rate, and a fuel card that can save you up to 40 cents per gallon at over 14,000 locations. It also has no long-term contract, no monthly minimums, no application fees, and friendly customer service.
  • eCapital: This factoring company offers competitive rates, a 90% advance rate, and a fuel card that can save you up to 55 cents per gallon at over 14,000 locations. It also has no long-term contract, no monthly minimums, no application fees, and a fast funding process.
  • Thunder Funding: This factoring company offers low rates, a 95% advance rate, and a fuel card that can save you up to 50 cents per gallon at over 14,000 locations. It also has no long-term contract, no monthly minimums, no application fees, and 24/7 customer service.