Is your trucking company or freight brokerage stuck in neutral? One of the largest challenges that you will face as a transportation company owner is when a client offers to pay their freight bills in 30 to 60 days. This can be very challenging, especially for new and growing companies. Freight companies possess expenses that need to be paid now; such as suppliers, repairs, rent and drivers.
If your organization is not in a situation to obtain a bank loan, freight factoring may be one of the best options to get your cash flow.
Most shipping companies take an absurdly long time (weeks) to pay their freight bills. This means that your freight company may have some times where a few shipping companies have not paid you in weeks. The bills add up and your shipping company needs to pay drivers. This is when a freight factor would come in handy. You do not need credit, you just need the promise of an invoice being paid.
A normal freight delivery process goes like this:
A shipping company hires your freight company to deliver a haul —> Driver delivers the haul ——> The driver bills the shipping company and waits WEEKS to be paid.
A normal FREGHT FACTORING process goes like this:
A shipping company hires your freight company —> Driver delivers the haul —-> Driver submits freight bill to GMA FActor (factoring company) and gets paid within 24 hours —-> GMA later receives payment from the shipping company.
When a company applies freight factoring to their arsenal it takes a burden off of worrying where how to keep the business running when invoices pile up.