To know which factoring company is best for your box truck business, it is important to know what factoring companies are all about. A factoring company for trucking businesses provides truck drivers a convenient, reliable, and fast source of pay on their unpaid invoices.
This company typically pays its clients within 24 hours of sending their freight bills in. This is extremely beneficial for trucking company owners as it usually takes freight brokers or shippers 30 to 90 days to pay for a hauled load.
This is how factoring for a trucking company works; when your company’s accounts receivable are converted into cash by selling the freight bill of lading or outstanding invoices to a factoring company, instead of waiting for 30, 60, or even 90 days for a load to be paid out, a factoring company will get you the money now for a service fee.
Please note that when you assign your receivables to a factoring company, the financing you receive in return is what helps regulate cash flow. It increases the amount of working capital available and as a result, you build a balance sheet with more liquid assets and can grow your business faster.
Best Factoring Company for Box Trucks
Apex Capital Corp
Established in 1995, Apex is one of the most established factoring companies in operation. Apex specializes in connectedness and providing users with quality customer service that keeps them in the loop about their invoices. Customer feedback is enormously positive for Apex, with many customers finding that their invoices are advanced quickly and that their account executives are very helpful in helping them navigate the factoring process.
This is indeed very useful for new carriers that may not have the knowledge or experience to effectively factor their invoices and grow their businesses.
This company offers a unique financial product called Net Terms. Although it is somehow different from the invoice factoring provided by the other companies on this list, it is another way that trucking companies and other businesses can receive cash for unpaid invoices.
Net Terms is noticeably different in a few ways, and it is very similar to invoice financing. The first major difference between Net Terms and traditional invoice factoring is that Net Terms offers you a flexible line of credit for up to $100,000.
Instead of a single loan, you can draw up to and include your set credit limit as you need funds. Another difference with Net Terms is that you aren’t selling your invoices. Instead, your unpaid bills and invoices work more like collateral to back your line of credit.
It also means that funds aren’t repaid as soon as your customers pay their invoices. Instead, you’ll make weekly payments on the used portion of funds for a period of 12 or 24 weeks. With this company, paying your balance off early will help you save money on fees. Net Term is a non-notification service, so your customers won’t know that you are using it.
altLINE is a part of The Southern Bank Company, and this makes it a concrete option for established businesses looking to factor high volumes of invoices. The bank has factored over $600 million in invoices over 80 years. They can fund up to $5 million and don’t consider your personal credit for qualification.
altLINE remains one of the very best because it is one of the most affordable options around and serves businesses in a diverse set of industries, making it a great option for almost any small business. The only drawback is that they are slow to fund compared to the competition, taking up to seven days.
BlueVine is a financing company that provides invoice factoring coupled with a business line of credit. If you need cash quickly, BlueVine might be your best option as they can approve you and sometimes fund in as quick as one day. Note that this is one of the only options that use your credit score as an indicator of your potential repayment success, meaning you’ll need a score of 530 or better to qualify at all.
With BlueVine, have it in mind there’s no long-term contract and you can easily apply online. Please also note that this makes it one of the easiest options to get started with and this combined with their speed of funding makes it our runner-up to the best overall.
Porter Freight Funding
Porter Freight Funding was established in 2011 to provide consistent cash flow to small or large trucking companies. Coupled with factoring services, the company also offers a dispatching network with pre-approved brokers and shippers. In addition, with Porter, truck drivers can access free fuel cards with fuel advances, as well as discounts at chains across the country.
Porter also provides flexible factoring services with no long-term contracts or commitments and has overwhelmingly positive reviews. Every client works with their own personal representative who understands their unique business needs.
If you are in the trucking industry, RTS Financial might be your ideal option. Note that this company offer advance rates as high as 97 percent of your total invoice amount and their familiarity with your business operations help you get access to more capital, faster.
Their rates can be high compared to the competition if you are in a riskier industry or if the amount you are looking to factor isn’t under $20,000 per month. RTS Financial is the best for trucking businesses due to its ease of use and experience in the industry.
However, the biggest downfall to the funding process is that you cannot apply online and instead must contact the company and wait for a representative to help you through the application process. If you want to get a general idea of your funding options without talking to anyone, this isn’t a good fit for you.
Paragon Financial is a well-renowned factor company that can boast of 25+ years in business, and a company that has worked with more than 2,000 businesses. It is one of the slower funding companies but is a solid option for all types of industries and could be affordable compared to others if you operate in a less familiar industry (not trucking or staffing). These factors make Paragon our choice for the best for smaller industries.
Triumph Business Capital
Triumph Business Capital specializes in both trucking and staffing factoring options, though they also have options for small to midsize businesses of all industries.
Triumph is slow to fund compared to many of the other options on this list, but it is still a wonderful choice for the staffing industry. Also note that their experience might be a good fit for you, and they could offer you a better rate than other factoring companies because of their familiarity with your industry.
TCI Business Capital
TCI Business Capital remains one of the best for businesses with slow-paying customers because it provides an option for customers to change their discount rate every 30 days, potentially lowering the percentage you are paying throughout the life of each invoice repayment.
This makes it a good fit for businesses needing the pricing to change every month because your customers may not pay very quickly. TCI Business Capital likes established businesses with a lot of annual revenue compared to the competition.
Riviera Finance has been offering financial services to businesses since 1969, making them a very renowned factoring option. Riviera also offers a guaranteed funding period of fewer than 24 hours after verification, which means you’ll never have to wait too long to get financed after you submit your next invoice. This helps make it our top pick as the best for quick financing.
Factors to Consider Before Choosing a Factoring Company for Box Truck
Here are some of the factors you should consider before settling for a factoring company for your box truck business;
The History and Reputation of the Factoring Company
One major factor you should consider before settling for a factoring company as a box truck driver is the history and reputation of the company. This is very important because a company with a rich history and good reputation will always give you value for your money and time.
Trust me, reputation is a key factor when it comes to entrusting your finance to a company. If you deal with a factoring company with a bad reputation, you are likely going to regret it.
The Fees and Service Charges of the Factoring Company
The fact that freight factoring rates are charged as a percentage of the load or invoice amount means that you should consider the fees and service charges of the factoring company. Depending on the criteria, the factoring company, and the services they offer, rates will usually range between 1% and 5%.
When a business factors their invoices, the factor (or factoring company) advances up to 90% of the invoice value to the business. When the factor collects the full payment from the end customer, they return the remaining 10% to the business, minus a factoring fee.
Please note that Invoice factoring is not regulated by the FCA. Check for hidden fees with any prospective provider before committing to anything. Not being regulated may currently be helping to keep costs for this type of finance down.
The Flexibility of the Factoring Company
When choosing a factoring company, make sure you choose a company that offers flexibility. Please note that some factoring companies require long-term contracts, pre-payment penalties, and/or monthly minimums. Make sure you choose a factoring company that allows you to choose which invoices you want to factor.
Documentation and Other Application Requirements
Documentation and other application requirements are yet another very important factor you should consider before choosing a factoring company to work with. This is so because your application is one of the most important requirements for invoice factoring.
Applications vary from one factoring company to another and this is depending on the factor’s needs, but most of them ask for things like business and personal phone numbers, email addresses, and business details.
Accessibility and Excellent Customer Care
The fact that you are expected to relate with the factoring company as often as you need them means that key factors such as accessibility and excellent customer care should be considered before choosing a factoring company to work with.
Trust me, it can be very frustrating when you can’t reach your services provider to lay a complaint or to get urgent clarification on issues. This is why before settling for a factoring company to work with, you need to read customers’ reviews on how to relate with their customers and how easy it is to reach out to them.
A standard factoring company should have multiple communication channels. They should have a call center, email services, walk-in centers, and even social media handles that their customers can leverage to communicate with them.