Transportation Factoring companies are third party accounts receivable financial institutions that buy a carrier’s receivables (invoices), take ownership of the invoice, and then collect on the amount due, giving the carrier immediate liquidity to keep funding their operations. This factoring transaction can yield cash within 24 hours or less deposited to your bank. Liquid capital is crucial to the freight industry, but with cash tied up in various operational expenses and other fixed assets, it’s not always readily available when you need it. When cash is not available from financing, investing, or operating activities this can disrupt your day to day routines such as not making payroll, purchasing fuel, making insurance payments, or even getting your equipment into the shop for minor fixes. This is especially true for startup companies who have already used up most of their cash including multiple bank loans to get their business up and running. That’s where factoring companies like CarrierNet come in as alternative business financing options. Learn more about CarrierNet Financial here. In addition to the buying invoices, some factoring companies offer other services, such as billing assistance, brokerage liaisons, collection efforts, credit checks, and even fuel discount programs.
Other than factoring being a great financial tool to use for immediate cash. Factors also have valuable knowledge in their industry which can be a huge benefit to new carriers or even a long time over the road trucker. Look at factors as a resource that you can call upon to give you their experience with a situation you have not had to deal with before or advise on how to work through with specific clients issues. There is a good chance that a factor has experienced a problem and may have the solution you need already. Learn more about CarrierNet Solutions here.