Transcap

Freight Factoring FAQs

Freight Factoring FAQs

Have questions about factoring? You’ve come to the right place.

Questions

Freight factoring sounds complicated, but it’s actually pretty simple. As a trucking owner/operator or fleet owner, you may like to speed up payment on your outstanding invoices. Factoring pays you an advance on your invoicing – typically advance up to 95% of the invoice value – so you don’t have to wait. The held back amount reserve is returned to you, minus the small factoring fee, when your customer pays the invoice. This easy process instantly boosts your cash flow, allowing you to purchase fuel, pay insurance, make payroll and more.
Factoring is used by all kinds of businesses, not just truckers. If a company has large cash expenses (like fuel or payroll) required to complete a job, factoring allows companies to cover these costs without worrying about cash flow issues.
Full-recourse factoring means that you (the borrower) bear the risk if your customer does not pay the invoice. You will still be responsible for the payment. With recourse factoring, you will generally receive a lower rate for taking on this increased risk.

Non-recourse factoring means that we (the factor) absorb the risk. Under certain circumstances, you may not be responsible for non-payment of invoices. Factoring rates tend to be higher because we take on the associated risk.

These terms are further detailed in your agreement.

Nope! Compared to a traditional bank loan or line or credit, factoring can be less expensive. In fact, a trucking business only pays a few pennies for every dollar factored. For example, a $1,000 invoice can cost as little as $10-$25 in factoring fees.

With that said, it’s important to work with a factoring company that has a strong reputation and keeps pricing and fees low for you.

Every freight factoring company has a different process. We try to keep ours as simple and straightforward with as few steps as possible. Here’s an overview of our easy process:

Step 1: Sign Up – Complete our quick form in a few minutes or less. You should hear back from us shortly – often within the same day.

Step 2: You’re Approved – Once signed up, you upload your invoices to our online portal.

Step 3: Get Money – Once we have the invoices, we enter it into our system and release up to 90-95% of the invoice amount to you via Wire or ACH.

Step 4: Invoice Gets Paid – Once the customer pays, we deduct a small fee and release any remaining money to you. It’s that simple!

Traditional banks have a lot of red tape with strict approval criteria and lengthy review processes. Also, banks typically offer a fixed line of credit (LOC) that can become difficult to increase the facility limit as you grow.

On the flip side, factoring comes with far fewer restrictions. The process is much easier and the facility grows with you. There is no maximum or capped amount.

Bad credit happens – we get it. That doesn’t mean you won’t be able to factor with us. Plus, by factoring your invoices and having cash available immediately, you can start rebuilding your credit for future lending needs.

Of course! We work with companies of all sizes and stages, from startups to mature trucking businesses.

If your current factoring agreement hasn’t expired yet, you can still apply and get approved with us to get the process started. You don’t have to upload any invoices until you’re ready.

We’re also happy to work with your former factor to ensure a smooth transition. If you have more questions, contact us for tips to help you make the switch.

No! Whatever works for you, works for us. You can pick and choose which customers you’d like to factor with us. However, most customers prefer to send everything through our 24/7 online portal.

No way – you’ll never have to worry about that with Transcap. We give you the freedom and flexibility you need to make the best decisions for your trucking business. Our factoring agreement simply outlines our low fees and simple terms.

Because the majority of companies in the trucking industry use factoring, your customers are probably used to the process. Many shippers and brokers are well aware of factoring and don’t raise any concerns.

In addition to freight factoring, we also offer term loans and lines of credit to trucking companies. You must be a Transcap factoring customer to pre-qualify.

Term loans are ideal for trucking owners or fleets making large purchases that can’t be covered with a credit card. This could be major repairs, new equipment, acquiring another fleet, etc.  On the other hand, a line of credit helps companies needing steady cash flow for short-term business needs. These may include purchasing fuel, handling maintenance and making payroll.

If you’re interested in these funding options, feel free to contact us so we can provide more information.

We do! Give us a try for 90-days and we’ll waive the factoring fees on your first invoice. Hopefully, our fast service and added perks will impress you so much that you’ll continue to use Transcap for all of your freight factoring needs.

img

Talk to Transcap

Our team follows up with the speed and service you need.

Contact us