Trucking Factoring

Starting a new trucking business is very expensive. You must find a place to operate, hire drivers, and buy or finance trucks. You must also buy insurance for those trucks and electronic logging devices for those drivers. You will need office supplies and furniture as well. Potential clients will have to know that you exist, so you will have to pay for advertising and hire salespeople. 

You likely have a business loan, but it may not be enough to cover your expenses until your clients start paying you. Most trucking contracts allow clients to pay 30 to 60 days after their hauls are delivered. If you want to keep your head above water, you may want to consider truck factoring. We are partnered with one of the most trusted factoring companies in the industry.

With over 20 years in the trucking industry, Simplex Group is committed to making new, small trucking companies successful. We want to see your company thrive and make sure that you are getting the most out of our factoring process.

Some factoring companies rely on call centers to answer customer questions. When you do business with us, you will be assigned your own personal representative who is available to answer any questions you may have.

Trucking Factoring or freight factoring, as it is sometimes called, is when a company sells its invoices at a discount. The client will pay the factoring company instead of the trucking company when the bill comes due. 

Factoring is one of the simplest ways to get money when you need it. Freight factoring companies do not scrutinize you the way a bank would. They will run your credit, but they will not hold you to the same standards that a bank will.

There are a few different ways to get running when your company is struggling. Small business loans are always an option. However, a bank will have to approve you. They will run your credit and do an extensive background search on you. It may take a long time to get approved, and your interest rate may be very high. You may end up waiting as long as you would have waited for your clients to pay you. This defeats the purpose of getting a loan in the first place. Plus, the loan can take a long time to pay back. When you use a freight factoring company, you can get same-day invoice processing. The money can be in your bank in as little as 24 hours after the sale goes through. 

Credit cards are another way of getting money in a hurry. When you open a business, you are certain to get many offers from credit card companies. Some of these companies have a high interest rate, and some will charge you annual fees. Whenever you make a charge on a credit card, you are just getting yourself into more debt. That debt will eventually have to be paid. When you sell your invoices, you will not accumulate any new debt.

Small trucking companies tend to have clients who are also small businesses. They are unlikely to pay their bills the second they come in and will probably wait until the bill is due. When you are first starting, you will have many bills coming in. The faster you pay those bills the better your credit will be. The better your credit rate is, the lower your interest rates will be. Truck factoring can save you money in the long run.

When you sign up with a factoring company, they will ask you for basic information about your company. They will also run a credit check on your clients. This is a benefit to you because credit checks are expensive. Even if you are not approved for factoring, you will be able to see if a potential client is worth doing business with.

Once you are approved, you can start selling invoices. Some truck factoring companies require you to sell a minimum amount of invoices every month. You will never have to worry about that when you do business with Simplex Group. 

The factoring company will pay less than the value of the invoice. They can even pay you within one or two days for a small additional fee. Trucking companies that do business with Simplex Group will pay a much lower fee than they would with other factoring companies.

There are two basic types of factoring; recourse and non-recourse. If a company offers recourse factoring and the customer doesn’t pay its bill, the trucking company must pay the factoring company. If a factoring company offers non-recourse factoring, they will pay the bill if the customer cannot. Non-recourse factoring is normally more expensive than recourse factoring, but it is ultimately a much better deal. When you are a customer of Simplex Group, you will always have nonrecourse factoring. Running a trucking company is hard enough without having to worry about your client paying a bill that you have already sold to someone else.

If you use a non-recourse company, you will not have to worry about hiring a collection agency. The factoring company will own the debt, and all of the collection efforts will be its responsibility.

Some companies continue to use a factoring company long after they really need to. A factoring company will send out bills for you and collect on the back debt. You can save thousands of dollars a year on personnel when they handle your back office work for you.

When you go through Simplex Group to obtain factoring, we will provide you with a fuel card that can save you a ton of money on gas and supplies for your drivers. We consider ourselves your partner and want to make sure you save all of the money you can.

We have partnered with one of the top transportation factoring companies. They have been in business for over a decade and use the best software to process invoices. 

The company offers a client portal for complete transparency, so you will be able to see what is going on with your accounts and invoice payments at all times. They have a fantastic customer service team who will always answer our questions and yours.

Some companies will not give you all of your money right away. They will force you to keep a certain amount of the money that they owe you in reserve. You need your money now, and we know it!

Some factoring companies will charge hefty termination fees for clients who want to cancel their contracts. The whole point of truck factoring is for a company to get back on its feet financially.

If a trucking company is doing its job correctly, it will not need a factoring company for long, and it should never be charged a factoring fee. You should never have to pay an initiation fee either. Factoring companies make plenty of money when they take on new clients, so they do not have to charge additional fees. 

Some nonrecourse truck factoring companies will have a chargeback policy. This means they will ask you to refund your advance and return your invoice. When you partner with us, you will get a true nonrecourse provider.

What percentage of my money will a trucking factoring company keep?

A factoring company will normally withhold 2%-5% of each invoice.

Will the customer know that my company uses a factoring company?

Yes. When a trucking company partners with a factoring company, the factoring company will send a Notice of Assignment to your client that will let them know about the arrangement you have with them. When a trucking company’s relationship with the factoring company is over, the client will receive a letter of release.

How long will it take to get started?

In most cases, you should be able to get set up with factoring in a few hours.

There is no other company like Simplex Group in the nation. In addition to our factoring partnerships, we are a full-service trucking compliance company. Not only can we ensure that you are fully compliant with Federal Motor Carrier Safety Administration regulations, we will also make sure you pass your new entrant audit with flying colors. We will also make sure that you have the appropriate amount of insurance and that your taxes are paid on time. We can even help you with trip planning.

You need to make your trucking company a success. We want to make sure that you have enough money to stay in business for many years to come. Give us a call today.