Why Transportation Companies Factor Their Invoices
Truckers are the backbone of America - if you bought it, a trucker brought it. To keep business running smoothly, there are many reasons transportation companies start factoring their invoices.
- Time: Shippers can take 30, 60, and even 90 days to pay carriers. Imagine you’ve started hauling loads for your new trucking company. You delivered the load and got the invoice, but now starts the waiting game… who has time for that? You can submit load invoices online within minutes of delivering the load and get paid the same day.
- Immediate Cash Flow: Carriers need money faster for fuel, wages, truck repairs, and other business or personal costs that may come up. With the promise of same-day payment, carriers can have that money in their accounts within hours of submitting invoices to factoring companies like InstaPay.
- Overhead Costs: Who wants to deal with invoicing and collections? Truckers have loads to haul. Carriers don’t need to focus on those back-end office operations. They can sell their invoices and offload the responsibility to collect from brokers and shippers to a factoring company. This eliminates overhead costs in terms of money and time spent on having someone track down payments on invoices.
- Non-recourse Benefits: Carriers in a non-recourse agreement get paid and won’t have to worry about a broker or shippers going bankrupt. The factoring company takes the loss in cases of broker or customer default in a non-recourse factoring agreement.
- No Credit Card Interest: Factoring eliminates the need for carriers to put their transactions on a credit card. They won’t have to worry about borrowing that money, making timely minimum payments a month, and paying interest. With factoring, they have money in their account ready to use with no impact on credit scores.
- Free Credit Checks: A hidden benefit to factoring is free broker credit checks. Factoring companies like InstaPay offer free credit reports on brokers for carriers on the online portal. Carriers can look up a broker in our database to check if they are trustworthy before picking up loads from them.
These are just some of the most common benefits to invoice factoring for trucking companies. InstaPay wants to be a knowledgable capital partner for small businesses, and that’s why in addition to immediate cash flow, free credit checks, and handling collections we value transparency. Work with us and you’ll never pay hidden fees or get locked into a complicated contract with minimum volumes or rate increases. Start factoring with us today!