It is standard practice for invoices to not be paid immediately but sometimes you need that cash flow. Keeping a truck (or even a fleet of trucks) on the road can be expensive and often you’ll need funds immediately. Need help finding the best factoring company for trucking?
Find out which 5 factoring companies can keep your business up and running without hiccups.
Quicklook: Best Factoring Companies for Trucking
- Best For Fast Turnaround: RTS Financial
- Best For Established Businesses: OTR Capital
- Best For Customer Service: Apex Capital Corp
- Best For Small Businesses: Thunder Funding
4 Best Factoring Companies for Trucking
Here is a better look into what these factoring companies are and what they have to offer.
RTS Financial
While some options prefer to keep it open-ended, RTS Financial focuses on contracts that last at least one year. But in that year, you will reap the benefits of all that they have to offer.
Best For: Fast Turnaround
Services:
- 24-hour funding
- Billing and collection services
- Customer credit services
- Online reporting
- Select invoice factoring
- Fuel cards
- Freight broker factoring
Maximum Funding: $30,000,000
Discount Rate: N/A
Expected APR: N/A
Advance Rate: Up to 97%
Recourse: No
Non-Recourse Factoring: Yes
Funding Time: Within 24 hours
Minimum Credit Score: N/A
BBB Rating: B
Special Features:
- Only non-recourse factoring
Benefits:
- No startup fee
- No minimum fee
- No hidden fees
Disadvantages:
- Customers have reported issues with the communication
- System has been described as confusing for users
OTR Capital
If you have an established business with a regular need for factoring, OTR Capital is a great choice. You can see immediate results from your hauls and keep everything going until the next job.
Best For: Established businesses
Services:
- Select invoice factoring
- 24-hour funding
- Billing and collection services
- Customer credit services
Maximum Funding: $25,000,000
Discount Rate: 10%
Expected APR: 2%
Advance Rate: Up to 90%
Recourse: Yes
Non-Recourse Factoring: Yes
Funding Time: Within 24 hours
Minimum Credit Score: N/A
BBB Rating: A+
Special Features:
- Quickbooks integration
Benefits:
- No hidden fees
- No monthly requirements
- Broker checks
- Online reporting
- Fuel advances
Disadvantages:
- Pricey for small businesses
- Restrictions on fuel advances
Apex Capital Corp
Apex Capital Corp is top of the line in customer service and finds ways to offer discounts to their customers that are up to date with mandates and even offer discounts on hotels and prescription cards.
Best For: Customer Service
Services:
- 24/7 factoring
- Same day and next day funding
- Professional collections on factored invoices
Maximum Funding: N/A
Discount Rate: N/A
Expected APR: N/A
Advance Rate: 80% – 90%
Recourse: Yes
Non-Recourse Factoring: Yes
Funding Time: Within 24 hours
Minimum Credit Score: N/A
BBB Rating: A+
Special Features:
- Apex 24/7 roadside rescue
Benefits:
- Great customer service
- No monthly minimum volume fees
- No long term contracts
- Fuel cards with discounts
Disadvantages:
- All invoices are required to go through Apex Capital
Thunder Funding
Thunder Funding has no ties to other industries and is fully focused on the trucking industry. This allows them to be more in tune with the needs of their customers.
Best For: Small Businesses
Services:
- Select invoice factoring
- Same day funding
- Free Credit checks
Maximum Funding: N/a
Discount Rate: N/A
Expected APR: 2% – 4%
Advance Rate: Up to 95%
Recourse: Yes
Non-Recourse Factoring: Yes
Funding Time: Same Day
Minimum Credit Score: N/A
BBB Rating: N/A
Special Features:
- Low rates
Benefits:
- No long term contracts
- 90 day agreements
- Free credit checks
- 24 hour turn around
Disadvantages:
- Limited in services compared to larger companies
What Is Invoice Factoring?
Invoice factoring is when you take the outstanding invoices for your company and sell them to a third party. This can improve your cash flow and keep you current on any bills or payroll that are relying on those invoices being paid.
How Does Invoice Factoring Work?
When you perform a service for a customer you send them an invoice and that invoice is not always paid immediately. There could be a payment plan or a later date set for that invoice.
If you are in need of cash flow immediately, you take the invoice and sell it to a factoring company that will pay you the money for the invoice, barring a fee. Your customer then pays that invoice to the factoring company.
Considerations When Selecting An Invoice Factoring Company
When you are choosing a factoring company, here are some tips and things to consider, both for yourself and the companies in question, before making your final decision.
Overall Cost
The way that factoring companies make money is by charging you a small percentage of each invoice you factor with them. So they will take your invoice and pay you, but you will be getting a small percentage less than the initial invoice. Then keep in mind that you can be charged additional fees for services like money transfers and collection costs. All of this should be factored together when you are choosing the best factoring company for you.
Funding Speed
The point of a factoring company is to receive your payments in a timely manner. If you are stuck waiting on the funds from the factoring company it defeats the purpose of using them in the first place. Be sure to see what guarantees can be made by any factoring companies before trading your invoices with them. Although, generally you should expect most to offer a less than 24-hour turnaround speed.
Credit Score Requirements
Using a factoring company does not require any in-depth credit score checks since there is no debt being taken on. Factoring companies will check credit scores but they are more focused on customers and credit scores since the payment comes from them. You are trading the invoice for cash directly with these companies and it can actually help you to improve your credit.
When you sell your invoices, you will receive cash that can be used to avoid missed payments. When compared to taking financing from banks, using a factoring company takes no toll on your credit while bank financing can have a negative impact.
Industry Expertise
Just as it is important that the factoring company has people who are knowledgeable in regards to your field, so should you. You want to know that you are up to speed with current measures and trends in regards to payment amounts, speeds, factoring, and much more. Be sure that you understand factoring and what the common rates are before choosing the one for you.
BBB Rating and Customer Service
The Better Business Bureau, also known as BBB is the standard when it comes to rating the interactions of companies with the public and with customers as well as the functionality of the business itself. They have a rating system that runs from A+ to F that will help you to understand whether your factoring company is worth interacting with. That being said you should also check out customer reviews for satisfaction and customer service.
Customer Service
Knowing the customer service record of any factoring company is important because there could be some issues that will sway your decision one way or the other. Through customer reviews, you can find out if the company is slower than advertised at sending funds, or perhaps they have hidden fees that you will not be initially exposed to. This and much more can be found out through customer reviews and customer service evaluations.
Factoring for the Future
While factoring can cost you a little bit on your income, it saves you time by getting the money in your hands quickly. Bills won’t wait for you to get paid, and you certainly don’t want to make any of your employees have to wait for their checks. When you factor with a top-of-the-line company like TAFS, you can get funds quickly and get started on the next job right away.
Start your invoice factoring today with TAFS and see the difference that they can make for your success.
FAQ
Factoring fees are usually a set percentage of your invoice but they can be influenced by factors such as the type of factoring, the number of invoices, and the amount of money involved with your invoices.
They are normally 1.15% – 3.5% per month.
Factoring is a common procedure in many industries such as trucking, freight brokers, wholesale, private investigators, advertising, logistics, and many more.
