If you are a trucker then you must be well aware of the expenses you encounter while being in the trucking industry. These expenses include fuel costs, maintenance coast, repair money and paperwork charges etc. Having a truck for commercial purposes is a good yet responsible work choice where you are required to meet all the costs and legalities. Now, meeting the requirements can easily eat up your cash flows and make you pay expenses on time. For this reason, truck factoring is seen as the most helpful advantage in order to get quick cash and fulfill immediate needs.
Truck factoring plays an important role if you are providing break free services and are having lucrative loads. The aware truckers know the value of truck factoring while most of them prefer a good truck dispatching company to provide them with the best factoring service. Let’s dive in deep to get a better understanding!
What is Truck Factoring?
Nothing seems more difficult than a simple act of waiting! Especially when you are doing a business. Truckers require quick cash payments so that they meet their expenses on time and make their workflow even more smoother. Let’s take a simple example to make you understand in the most simple yet efficient manner.
Consider yourself party A and your load supplier as party B, consider a third party (factoring service company) as party C. Now the deal is done between you and your load supplier with the aid of communication provided by a truck dispatcher or maybe at your own negotiation. Now you need the payment as soon as possible for the work you took but the supplier might delay the payment (due to any possible reason). Here comes the party C (your factoring service), they will make direct payment to you as you require and will receive the actual amount from your load supplier later when they will make the payment (they will deduct their commission while giving you quick cash).
This was an easy to get scenario and just an example to make you understand what actually truck factoring is and why it counts for truck drivers.
Here’s a proper definition of truck factoring:
“Also known as freight factoring, truck factoring means the fast and efficient payment of invoicing. It reduces the waiting slots for you and converts your invoices into cash at a discounted price. It allows truckers to stay on the roads while their cash flows get translated into quick capital.”
A Step-Wise Guide About Factoring for Truckers
It may sound like a lengthy process but factoring is much easier than running for bank loans and hectic agreements. Here’s a step-wise guide for our truckers:
Step 1: You have to Qualify for Factoring.
You have to deliver the shipment in order to get qualified for factoring. Your loads must be signed by MC (motor carrier) number. The loads which are leased on a different MC number cannot get qualified for factoring. You have to deliver the shipment under your personal details such as name and registration.
Step: 2 Receive an Invoice
When you get done with a deal and select a load for your truck, you get an invoice. This is when factoring starts in order to get your payment process initiated. The normal invoices take 40 days in general to complete the payments. This might cost a trucker time & efforts. That’s why truckers prefer factoring service. It makes it much easier for the truckers to get their payments done without any delays and work out for them in the most convenient manner.
Step:3 Get your Aging Invoices Sold
If you own an aging invoice, you can sell it to a factoring company like Truck Movers LLC. They will make your invoice’s value increase up to 97% of its total value. You just have to sign a bill of invoice and lading. Once you put your request for factoring, the team will start working on it. Make sure your credit score is good enough to qualify for factoring. The factoring companies do check their client’s credit history and draft a suitable proposal for them.
Step: 4 Get Ready to Receive the Funds
Once your proposal is forwarded, it is assessed based on your invoice’s nature and client risk. You will receive the offer and if you are okay with it, you just have to get done with some paperwork and you will get the payment in less than 24 hours. It is a simple and quick process, no fuss and no waiting for days.
Step 5: Collection from your Supplier/Client
The factoring company reaches out to your client or supplier to receive the actual amount. You don’t have to chase the client or supplier for payment when the factoring company makes an easy payment to you. The factoring company then receives the amount later on and makes the informed fair deduction for the service you enjoyed.
No more chasing clients and rushing for timely payments! Technology and services era has now made every task much easier than you can imagine. You just need to find a good truck dispatching company like Truck Movers LLC. Truck factoring has made it easier for the truckers to get quick payments and meet their immediate needs without having any fuss. Just follow simple steps and get paid in less than 24 hours. Truck factoring is important for the truckers because they know the value of time and money.