The trucking industry keeps the nation’s economy humming by ensuring that goods are delivered when and where they are needed most. The transportation industry has over 7 million Americans employed in shipping, receiving, and is responsible for transporting trillions of dollars in products every year.
What Is Freight Factoring?
Truck or freight factoring is a service that can greatly benefit a carrier or a broker when it comes to providing a guarantee of payment (of sorts see below for different options of factoring). The factoring process is designed to expedite cash flow to transportation companies that can help them pay bills and expand.
Types Of Factoring
When it comes to freight factoring there are two primary ways to go about protecting yourself when a customer fails to pay or is frequently delinquent with payments. It is Recourse & Non-Recourse Factoring
Recourse Factoring– With this method, the transport business takes full responsibility for any unpaid invoices. This results in lower rates since liability protection is not necessary as the company can handle any unexpected debts. The one downside is that this will result in a higher cost as liabilities need to be covered by the factoring agency.
Non-Recourse Factoring *Ideal for Small Businesses*– This method removes any existing liability for unpaid invoices or clients who have defaulted, which is an ideal option for smaller businesses that cannot cover debts out of pocket.
Freight factoring can be a great solution for any company that may be facing cashflow problems or delinquency. Read on for some additional benefits that factoring can offer a business of any size.
- Immediate Cash Flow
- Reduce / Eliminate Overhead Surrounding Invoices
- Increased Capital
- Credit Flexibility
- Factoring Flexibility
How To Determine If Freight Factoring is right for your business?
Ask yourself any of these questions below and if the answer is a yes, then freight factoring may be right for you.
- Are customers late or delayed with payments?
- Are delinquent payments holding up other payments?
- Is a lack of cash holding you up from growing/expanding?
- Do you find yourself spending more time making collection calls than collecting?
Why Choose AWA for Your Transportation Collection Needs?
AWA operates on a contingency fee basis, meaning, if we cannot collect, you owe us nothing. If collection efforts are successful, our rates will be based on how old and how much the debt is, if there is a damage claim, and whether the debtor is in or out of business.
AWA specializes in Transportation collections; it is all we do! AWA’s strong understanding of the transportation industry puts its clients in the best position to get paid. If you have unpaid freight invoices and are not sure what to do next, call 662-892-8591 to speak with one of AWA’s client specialists today or Contact Us Directly!
For more information on our agency practices and methods, view our AWA Collection Process Page.