Are you looking for the best rated factoring companies for your trucking business? If YES, then here are excellent factoring companies for you to consider. Choosing which factoring company to work with is a critical decision for any carrier. While there are many benefits to factoring, it is necessary that you choose the company that is an ideal fit for you.
What is Freight Factoring?
Freight factoring also called transportation factoring, trucking factoring, or freight bill factoring, is a process in which the person or business that delivers a load sells their invoice to a factoring company.
Note that the factoring company then pays the carrier the full amount of the invoice, minus a small percentage, within as little as 24 hours of receiving the invoice, rather than waiting a month or longer for a broker to pay the invoice. Have it in mind that the time it takes to receive payment can depend on a variety of factors, but generally different companies will have different timelines for payment.
The pertinent point to note is that factoring should not be confused with lending. When a factoring company acquires your invoice, that invoice belongs to the company. With factoring, drivers and businesses are able to get paid in advance — and use these funds to pick up new loads — without having to get a loan or incur debt.
The interest rates and loan terms of invoice factoring are the first considerations when choosing a factoring company. The loan sizes each company offers are also crucial. For instance, if a company needs access to a large amount to scale growth upward and a given factoring company only offers smaller amounts, that company may not be an ideal fit for the trucking company.
Recourse and non-recourse factoring are two types of invoice factoring a trucking company needs to understand when choosing a factoring company. With recourse factoring, the trucking company is still tasked with the debt even if the broker or client doesn’t pay.
Also, note that this type of funding may have lower fees than non-recourse factoring because the trucking company is left to manage the collections on invoices. Non-recourse factoring may have higher fees since the factoring company manages the back-office work on behalf of the trucking company, billing brokers, and clients for them.
Qualification requirements are another critical consideration when analyzing a company to factor in invoices. Information such as minimum credit score, annual revenue, and length of time in business may disqualify a trucking company from working with some factoring agencies.
Best Rated Factoring Companies for Trucking
-
Fundbox
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 up to $100,000.
Instead of a single loan, you can draw up 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 a 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
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. Also, note that they can fund up to $5 million and don’t take your personal credit into consideration 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.
-
Apex Capital Corp
Established Founded 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. The idea that so many of Apex’s customers feel that they are being supported is a big plus for the company
-
BlueVine
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 personal 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. 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 with the goal of providing 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.
-
RTS Financial
If you are in the trucking industry, RTS Financial might be your ideal option. Note that this company offers advance rates as high as 97% 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 especially due to their 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
Paragon Financial is a well renowned factor (25+ years in business) 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).
-
Riviera Financing
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 less than 24 hours after verification, which means you will never have to wait too long to get financed after you submit your next invoice.
-
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.
Also, note that 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.