Freight Factoring: Beyond the Basics
Keeping cash flow coming in is critically important in the trucking industry. This is especially true today with higher fuel costs and increased competition. Factoring can be a way to address bottlenecks in cash flow.
Explainer: Factoring in Brief
Factoring is a financing arrangement in which a business sells its unpaid invoices to a separate agency and receives an immediate payment of cash in return. The factoring agent pays out a slightly smaller amount than the total value of the outstanding invoices. Both the business and the factoring agent make out well: The business receives a rapid infusion of cash and the buying firm attempts to collect the full value of the invoices.
Factoring is not a fad; it has been around for ages. In today’s world, it provides an elegant way to kill two birds with one stone:
• Keep cash flow coming in a timely fashion
• Stop worrying about the collection from delinquent accounts
Utilize Freight Factoring
Factoring can be a great way to manage cash flow for trucking companies. Getting paid on time is essential. But not all customers pay quickly. Nobody really wants to chase down slow-paying customers when there are so many other aspects of the hauling business to keep on top of.
Utilize freight factoring instead. Here is how it works:
• You haul and deliver a load from point A to point B
• You have a relationship established with a factoring company and you send the invoice directly to them
• The factoring agent purchases the invoice from you
• You immediately receive the funds
• You don’t have to chase down collection; the factoring agent is responsible for that now
Connect with Champagne Global Capital Lending
Here at Champagne Global Capital Lending, we are factoring experts. Give us a call should you need more details about our freight factoring program. Our highly trained staff awaits your connection.