Trucking Factoring Company Texas

From Liability to Cargo, we keep you covered

Making ends meet is one of the most difficult elements of running a new trucking company in Texas. Start-up costs are high and include paying rent on your facility, purchasing trucks, hiring drivers, and acquiring clients. Once you have acquired those clients, you have to get their products where they are going before they will pay you. Most standard trucking contracts allow businesses a minimum of 30 to 60 days to pay their bills.

Fortunately, there are factoring companies in Texas that can help you stay on top of your bills.

Photo of a Happy Truck Driver

What Is Truck Factoring?

A truck factoring business buys invoices from trucking companies at a reduced rate. When the client pays their bill, they will pay it to the factoring company rather than the trucking company. 

There are two different types of truck factoring companies—recourse and non-recourse. Knowing the difference is important when selecting a company to do business with. 

Non-Recourse Factoring

If a trucking company has a non-recourse factoring agreement, the factoring company assumes responsibility if the client cannot pay. The factoring company will have to hire a collection agency to pursue the debt. They will take a loss if the client never pays their bill.

Recourse Factoring

With a recourse factoring agreement, the trucking company assumes responsibility if the client is not able to pay their debt. You would have to hire a debt collector, and you would have to pay the factoring company what the client owes if they never pay their bill.

Working With Simplex

Simplex Group is committed to making sure new trucking companies are successful. We focus on small privately-owned companies. We understand the struggle that trucking companies go through when they first open, and we know it can be difficult to pay your bills. That is why we have partnered with one of America’s top truck factoring companies to help you pay your bills when you first start.

In business for 20 years, we know just what Texas trucking companies are looking for. We assign a personal representative to each of our clients so you will never have to worry about dealing with a random call center employee when you call in to ask a question.

Which Type of Invoice Factoring is Right for Me?

A salesperson from a recourse factoring company will tell you that recourse factoring and non-recourse factoring are not that different. They will point out that they are similar in price. The amount of the discount at which you sell your invoice will be about the same no matter which option you pick. 

It is easier to qualify for recourse factoring than it is to qualify for non-recourse factoring, and qualifying for either type of factoring service is easier than getting a loan or a line of credit. 

At Simplex Group, we think that it is always a good idea to work with a non-recourse invoice factoring company. A trucking company will assume far less risk with this type of factoring.

The clients you get when you are a brand-new trucking company tend to be new companies themselves. In many cases, they may be struggling financially. You are taking a major risk when you use a recourse invoice factoring company.

Financial solvency is a constant problem for small businesses in America. When a company cannot or will not pay its bills, a trucking business will have to hire a collection agency. Collection agencies work on a contingency basis. Even if they can collect your debts for you, they keep a certain percentage of what they are able to collect. They often will not be able to collect the full amount of the bill.

When you use a non-recourse Texas factoring company, they will be responsible for collecting any unpaid bills. This can save you a lot of money and frustration.

Photo of Trucks on the Highway

Advantages of Factoring Over Other Types of Loans

Anyone who owns a small business has probably taken out a bank loan or two. If you own a small trucking company, you know that applying for a bank loan can be a long and arduous process. The bank will run your credit and look at all of your assets and liabilities. References may be required, and any other loans you have will be taken into consideration. It may be months before they make a decision, and that decision may not be in your favor. This will not help you if you need immediate funds.

Some trucking companies pay for their expenses with credit cards. When one credit card gets full, they will take out another credit card. The interest rates credit card companies charge are often high. In addition to paying off your purchases, you will also have to pay the interest. If you miss a payment on a credit card, there are often late fees. It is easy to get buried under a mountain of credit card debt.

You must be approved for a credit card just as you would with a bank loan. Credit cards are easier to get than loans, but they can get you in an equal amount of trouble if you cannot pay them off.

Applying for factoring is easy and you can usually get a decision right away. Once you have been approved, you should be able to start selling invoices within about a week. 

Once you start selling invoices, the factoring company will pay you within a few days. You can get an expedited payment for an additional fee in about 24 to 48 hours.

Why Texas Trucking Businesses Are Struggling

Like other freight businesses around the country, Texas trucking companies are struggling. This is due to an increase in fuel and equipment prices

Insurance rates are also climbing. Profit margins are decreasing and many small trucking companies are thinking of leaving the industry.

New owners of small trucking companies are at the highest risk. The demand for independent truckers greatly increased during the COVID pandemic and in the year that followed. This demand caused an increase in people opening independent trucking companies. Even mid-sized businesses are seeing increased demand.

Simplex Group wants to see every company that it works with be successful. We know exactly what a small trucking company has to do to earn new business and stay in the black. That’s why financial solutions like factoring are great ways for trucking companies to keep up with their bills when times are tough.

Hidden Advantages to Accounts Receivable Factoring

Truck factoring isn’t just a reliable funding solution for your Texas business. The right factoring solution comes with many additional benefits on top of getting you working capital quickly.

A factoring company will take care of billing your clients for you. Many established trucking companies will continue to use invoice factoring companies long after they need financial assistance. They find that letting a factoring company bill clients saves them thousands of dollars in personnel costs.

When you use Simplex Group for factoring, you will also get a discount fuel card. This can save thousands of dollars a year on diesel fuel or any other type of fuel that you use.

A Factoring Company You Can Trust

The factoring industry is not officially regulated. Hence, there are some scammers out there. Simplex Group ensures that you will do business with an established and legitimate factoring company.

There are factoring companies that will insist that you sell them a minimum amount of invoices every month to keep doing business with them. This can be counterproductive as you may not always need to sell the same amount of invoices to keep your head above water. 

The right factoring company has no monthly minimums in its contract. Some factoring companies charge startup fees, but when you partner with us, you will never pay these fees.

It’s important that you can trust your factoring partner. From the application process all the way to your first payment and beyond, you want an accounts receivable partner who offers flexible terms, timely delivery, and an expert customer service department to ensure your business can grow.

Factoring is not meant to go on forever. Some companies will charge you a cancellation fee If you decide you don’t need their services anymore. Our clients pay no cancelation fees for factoring.


How much of a discount do I have to sell my Invoices for?

The exact amount of the discount the factoring company receives on invoices will depend on how many invoices you are selling them and the credit risks that they are taking. It is normally around 3% to 5% of an invoice. When you work with Simplex Group, you will always get the best rates possible.

Will they run my client’s credit?

Yes, a trucking company is likely to run your client’s credit as part of your approval process. They need to verify that your clients can pay their bills. This can be advantageous to you because you want to know if your clients are financially solvent before you do business with them. Credit checks are expensive, and this is yet another saved expense.

Do I have to sell every invoice?

When you work with the factoring company that we provide, you can sell as many invoices as you would like. You may only need factoring once in a while. This is an important option because some of your clients may be uncomfortable paying a factoring company.

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Other Services Simplex Group Offers

In addition to offering Texas invoice factoring from a trustworthy company, Simplex Group offers many different truck startup services. 

We can help you set up your small trucking business with the Federal Motor Carriers Safety Administration and help you through the process of becoming compliant with its strict regulations. 

Screening drivers is an important part of FMCSA compliance. We will thoroughly research each driver’s background, arrange for drug tests, and keep your driver’s records up to date.

You must keep your vehicles insured and in good operating condition. We will make sure that you have every kind of insurance necessary to be compliant with government regulations to run your business safely.

Simplex Group will ensure that vehicle inspection records are stored electronically along with records of repairs. We provide state-of-the-art electronic logging devices that will record a driver’s vehicle inspections along with every single mile that they drive.

There are strict regulations on the taxes that a truck driver must pay. When you partner with Simplex Group, your taxes will always be paid on time.

Logistics is an essential component in running a successful trucking business. Knowing how to load a truck is key to making sure every load is profitable. We have relationships with many companies and can arrange for shared space. We will make sure that you never have a partially full or deadhead truck.

One way trucking companies lose money is by not knowing how to plan their lanes. Our team of trucking industry professionals has many years of experience in the trucking industry. We can plan routes that will maximize your company’s profitability. 

When you partner with us, we have a vested interest in the success of your business. Call us today.