Guest Post by: TCI Business Capital
Freight factoring, also known as invoice factoring, is a common cash-flow solution trucking companies use to maintain and grow their operations.
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Invoice factoring works by selling your invoices to a factoring company in exchange for immediate payment. The factoring company advances you around 80-95 percent of the invoice amount. Once payment is received from the customer, the remaining balance is remitted to you minus a fee for the services.
1.Eliminates Cash-Flow Gap:
Many trucking companies wait 30, 60 or even 90 days for customer payment. This causes a cash-flow gap which makes it challenging to keep your business running. Freight factoring eliminates this gap by paying you the day you’re ready to invoice.
2. Quick Cash:
When companies need quick cash in order to continue to run their business smoothly, invoice factoring provides them with the quick cash they need.
Unlike business loans or lines of credit, the approval, setup and funding process is quick and streamlined.
