Total costs of freight factoring depends on:
- The factoring rate
- The factoring advance
- Extra fees
- Credit of your shippers and brokers
Tip: You need to convince your factor that financing your business is a low risk to them. The lower risk the factor asses, the lower costs you will have.
Final Words
Maybe you are thinking now, if the freight bill factoring is such a right solution, why the big companies rarely use it?
Firstly, it’s a misconception that the big corporation don’t use it. They do, but they don’t need it that much, for their money muscle allows them to afford long waitings.
Furthermore, big financial institutions like banks are providing them all the services they need, while tight ropes are reserved for the beginners and small businesses.
The truth is that freight bill factoring is the better option for smaller trucking businesses, but not in a way that you chose it because you’re not good for the bank, but for it’s flexibility, quick response and a lot additional options they are bringing.
