It S Called Freight Broker Factoring

Category: Finance.

If you are a freight broker, i. e. arranging transport to haul goods between carriers and shippers, then you could be wishing that you had ready funds to tide over those days while you wait for your credit freight bills to mature.

It s called freight broker factoring. Well, now there is a way. Fuel expenses and payment to your truck drivers constantly drain your finances and these two factors are critical in running your business. So in order to get instant finance, you can tie up with a freight factoring company. There are also other regular expenses like servicing the trucks and tire expenses and some irregular expenses like truck breakdowns. These companies buy your freight credit invoice, which you have issued to your customer. The first installment will be wired to your bank account within 1 to 2 days and could be 90% of your invoice value.

They pay you the invoice amount in 2 installments. The second installment will be paid to you when your customer makes the payment on the due date, and the freight factoring fee will be deducted from this installment, by the factoring company. This freight factoring ensures that you get immediate payment against your freight invoice even though you have dispatched goods on credit. This factoring fee normally ranges from 5% to 5% and will depend on a variety of factors such as the credit specified in your freight invoice, the credit rating as decided by the factoring company and the total amount of business you do with your factoring company. This money can be used to pay your drivers, pay off fuel bills and help you expand your business. Most freight factoring companies also take care of the payment collection from your customers, so this is an additional boon for your business. Some factoring companies also take on the task of paying drivers salaries, so that would leave you free to concentrate on other aspects for your business.

They send you regular reports of payments received by them as well as fresh receivables reports. It is also better than taking a loan from any bank, since you would have to submit extensive documents and have to offer collateral to get a loan, and would have to pay interest on that loan. So, freight factoring is more of an extension of your business. Also, freight factoring grows along with your business since the more invoices you submit, the more money you receive and less will be the factoring fee . But search for freight factoring companies with care. So, freight factoring provides you with instant finance, thereby helping you to create a cash flow, which can be used to meet your everyday expenses and also to expand your business.

They should be efficient and courteous while dealing with your customers, since they will be collecting payments from your customers, their behavior could cause problems in the relations you have with your customers. They should also be able to offer you prompt services and send you updated reports on time. Their payments to you should also be on time. Use the above pointers to your advantage and get hold of a good freight broker factoring company. This move could solve your financial woes and help your freight brokering business along the road to success.

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