Trucking Factoring Company California

California is a beautiful place to live, and it can be a profitable place to do business. Los Angeles’ main industries include agriculture and technology. This makes it a great place to own a trucking business. However, it can be hard to keep up with your bills.

Simplex Group can help you with every element of running your trucking business. We can make sure you have money to keep up with your bills via our truck factoring services. 

When you open a trucking business in California, you are going to have to acquire trucks, find a place to work out of, hire drivers, and pass your new entrance audit with the Federal Motor Carriers Safety Administration. You are going to have a lot of expenses when you first start.

Acquiring clients is one of the hardest parts of a California trucking company. You want to make new clients happy and do a stellar job. Standard truck contracts allow clients between 30 to 60 days to pay bills. This can be a long time to wait. This is one reason you need a California factoring company backing you up.

Truck factoring is a process of selling invoices at a discounted rate to obtain immediate cash. Factoring is one of the best ways for new trucking companies to make ends meet while getting their businesses going. 

There are many invoice factoring companies in California, but knowing which one to select can be a daunting task. Simplex Group has 20 years of experience in the trucking industry. We know exactly what to look for in a truck factoring company. There are several things we take into consideration when selecting a factoring partner to work with.

The first thing to look at when deciding what factoring company to partner with is whether or not they offer recourse or non-recourse factoring.  When a non-recourse factoring company buys one of your invoices, they take full responsibility for it. That means that if the client does not pay their bill, the factoring company will pay for any collection efforts that are made. You will not be responsible for it in any way.

A recourse factoring company will hold you responsible if your client does not pay their bill. Therefore, you would have to either collect the debt from the client yourself or hire a collection agency.

Collection agencies work on a contingency basis. That means if they are able to collect money for you, they will take a percentage of what they can collect. 

Collection agencies will often give debtors a discount for paying in one lump sum. Hence, the amount of the invoice you can collect may be greatly reduced. The collection agency will also keep a percentage of the money they collect. Your company would have to make up the difference to the factoring company.

It’s in your best interest to find a financial partner who offers non-recourse factoring. You worked hard for your money, and you deserve to keep it. Non-recourse factoring is much more beneficial to your trucking company. The only real advantage to recourse factoring is that it is a bit easier to get.

A legitimate factoring company will expect you to sell them your invoice at a discount of around 10%. They should not have any extra fees. Their business overhead should be very low. A factoring company that has hidden fees is simply trying to take advantage of a trucking company.

Hidden fees can include application and setup fees. They may also try to charge you for credit checks for your clients. It is common for factoring companies to check the credit of their clients because they are taking a risk. However, they should pay for the credit check—you should not have to.

Some unscrupulous companies will charge you late fees if your client pays late. They might even charge you customer service fees for maintaining a call center or answering your questions. They may tack on a processing fee which is essentially a fee just for doing the job of a factoring company.

If truck factoring works the way it’s supposed to, you should not need it forever. You should only need it until you are financially solvent. Unfortunately, some truck factory companies will try and charge you a cancellation fee when you don’t need them anymore.

The right factoring company has no hidden fees and will not charge you just for doing business with them. You want a company that offers full transparency. If you’re in need of factoring services to ensure you get paid sooner, contact Simplex Group for a consultation.

Another reason to opt for non-recourse factoring is all the side benefits that it comes with. When you do business with a non-factoring company, they will run credit checks on your customers. This is beneficial to you because you will be able to know if you are dealing with solid businesses. 

Although you may sell many of your invoices at first, you will eventually want to collect on them yourself and get the full amount. Letting the factoring company check the client’s credit for you is a great way to find out who you want to do business with down the road after you move on from using the factoring company.

If you are like most small trucking companies, you may be struggling to make ends meet as you wait for clients to pay their invoices. Many businesses wait as long as possible before paying an invoice, but that doesn’t keep your expenses from piling up. From the costs of maintaining your fleet to paying your employees, you have a lot on your plate without having to worry about your clients paying you. Factoring companies are the perfect partners for small businesses that are just getting started.

Do I have to sell every invoice to the factoring company?

Not when you work with Simplex Group. Our factoring company has no monthly minimums.

Will my clients find out I am using a factoring company? 

Yes, the invoice factoring company will run their credit and it will send your clients bills for your services. You will have to let the clients know that they will be paying a factoring company.

Will using a factory company hurt my reputation with my clients and potential clients?

Most small trucking companies use factoring of some kind. It is nothing unusual in the trucking industry, and it should not hurt your reputation. 

What other services does Simplex Group provide?

In addition to helping small trucking companies improve their cash flow with invoice factoring services, Simplex Group handles all elements of running a trucking company. We can assist you with hiring drivers and acquiring trucks, getting insurance for those trucks, and keeping the background records and inspection records up to date. Give us a call today for cash flow solutions and full compliance services.