Show me the money
What is factoring? How do you choose the right company?
What is factoring?
Factoring is when you sell your invoice to get paid now, rather than waiting.
Brokers usually pay your invoice 35-45 days (or more!) after you have delivered the load and submitted an invoice.
Rather than wait for the broker to pay you, carriers can sell their invoice to a factoring company. This company will pay you now for the invoice. Then, the company will let the broker know to send payment to them directly, and they'll wait the 45+ days to get paid.
For doing this service, they are paid a fee. Of course, they're not doing this out of the goodness of their hearts.
You think you're just comparing the factoring fee - which is a percentage of the invcoice amount. Lot's of ads offering a low rate....but wait.
When you are a single truck carrier, often the fee may not be so great. The factoring company doesn't give you a discounted rate, because you're not earning them as much money as the bigger guys.
We know which ones work best for hot shot trucking carriers, like you
Plus there are a LOT of other fees they try to hit you with. Don't fall for those pretty marketing ads. It doesn't cost you a cent to ask us for the best company.
From the moment you Apply for MC Authority
Everything on your application is of public record. Thousands of companies use this information to inundate you with their sales pitches.
Use our experience to choose the right company
With all the carriers we service, including our own business, we have the experience to know what factoring company is right for hot shot trucking companies.
Factoring is a tool you can use to obtain payment for loads now rather than wait 45-60+ days later. Or rely on brokers that offer quick pay, with fees for such.
However, many factoring companies are unscrupulous. They claim there is no contract, but the fine print will generally indicate that if you do not give notice to terminate (basically on day one), it turns into a long term contract.
In addition, factoring companies will tell you about the "front end" fees - which range from 2-6%, depending on the revenue they expect you to generate each month. The "back end" fees will be for things like getting your money. So ACH or wire fees, advances, invoicing, and so on. Those fees really add up.
Some contracts will require you to earn a minimum amount of revenue each month, or they will assess a fee. Some will require you to sell them all your invoices, though the sales person will state this is not so - the contract will say different. And the contract is what you're held to.
Lastly, the factoring companies will tell you what the cut off times are for processing. However, they can change this at any time - leaving you out in the cold. A good example is a company that stated the cut off for same day processing was 2pm CST. One day they changed it, without notice to clients, to 9am MST. Carriers were left with no funds for an additional day, or more if it was a Friday.
I believe the best factoring company are those that truly have no contract. It is worth paying an extra 1% to work with them, as you have much more control, not to mention the ability to leave when you wish.
You don’t need active authority to set up with factoring.
One such company that we suggest is GSquared. No contract. No set up fees. Great customer service. And they earn your business with each transaction, not by contract.
The contact there is Ben and his direct number is 678-987-4383
Mention LTL RIG when talking to them, our volume can get you a slightly lowered rate.
ALWAYS ask questions. The rates and contracts change all the time. I base my referrals on feedback from carriers, so find out what the current rates/terms are.
We base referrals on carrier experience only.
As you shop around, I highly suggest that you select a company that does not hold you to a contract. One that allows you to leave when you want to. They should earn your business with every load, not just a conversation with their sales person.