What Is Freight Factoring?

Freight Factoring

If you operate a trucking company, you know how easily unforeseen events can disrupt your monthly budget. Unexpected increases in fuel costs, repairs or delays in payments from customers can make it difficult to meet your recurring expenses. Using freight factoring can help you to resolve your cash flow problems.

How Does It Work?

Freight factoring, or bobtail factoring, is a simple process. Once the factoring company has approved the credit history of your customers, you forward all of your outstanding customer invoices to the company. The company will immediately advance a percentage of the value of the invoices to your account and then work with your customers to collect the total sum due. Once it has received this payment, the reserve is returned back to you, less a fee for the factoring service.

What Are the Benefits?

There are many advantages to employing a factoring business to handle your invoices. The most important is being able to predict your income and, thereby, create a more stable budget. This helps you to save money and expand your business. If your company is small and you do not have an official accounts department, it can also save valuable time as the factoring service handles the invoicing and collection processes.

You have worked hard to establish your company. Delays and interruptions in your revenue stream can put this at risk. Utilizing the services of a factoring company can help you to create a secure future for your business.

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