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Semi Truck Factoring is the process in which an owner-operator or a trucking company sells an outstanding truck freight bill to a factoring company for a cash advance.
Up to $1597
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Semi Truck Factoring With Fuel Line of Credit
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Semi Truck Factoring With Dispatch
Get high paying loads with MaxTruckers Dispatch, the best dispatch company in the USA along with factoring. To experience the Dispatch quality, you get discounted dispatch price. Scroll down to see the price. NO fixed percentage, NO commitment and SAVE thousands of dollars!
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What is Semi Truck Factoring?
Semi truck factoring in trucking:
Semi truck factoring is a key part of truck factoring. Semi Truck factoring helps semi-truck to get factoring instantly or in 24 to 48 hours.
What are trucker/driver needs to do is to ply a load generate a BOL/ invoice and submit a digital copy of the trucking invoice on the factor’s website, mobile app or send it via email.
How does semi truck factoring ease trucking business cash flow issues?
Semi truck liquidity and cash flow solution:
After plying a semi truckload a semi trucker has to usually wait 30/45/60 or even 90 days to get paid for the loads pulled. This wait for the cash to come will create a cash crunch at the semi truck business.
So, what the business owner does is he will submit his trucking invoices to the factoring company, then the factoring company will pay you liquid cash after cutting the factoring fee. This cash injection in business will help semi-truck businesses to pay their expenses/ salaries/ maintenance/fuel bills/ driver accommodation, food, supplies, etc.
Why is semi truck factoring important for owner operators?
Semi truck factoring is vital:
Semi truck factoring helps semi truckers to achieve flexibility and liquidity by offering their trucking invoices at a fee/commission.
Other than liquidity injection, operational freedom a factoring company helps small and medium truckers to get on top of their carrier side paperwork and secretarial documents.
The money thus got from the factor can be used for working capital expenses like fuel, driver salaries accommodation & amenities; equipment maintenance and upkeep, tire or oil change, etc.
How do you select a semi truck factoring for your business?
Selecting a semi truck factor for your business:
To select a semi truck factoring company you need to keep in mind certain aspects.
You need to know what’s the factoring rate, and if the volume of invoices and size increases then the factoring rate also decreases. Is there a contract lock-in period, like a 6month contract or a 1year contract, if it is there you might have to pay a contract termination fee for an early exit. Are there any hidden fees like credit check fees or another fee etc, ask about hidden fees while you are going to sign the contract.
Is there a minimum factoring volume, should you factor all the invoices with your factoring company. Then you need to see what are the additional benefits like fuel card, fuel line advances, combo insurance, load board, etc you get from your factor.
You need to have responsive, dedicated, and problem-solving customer service. If you have a query the customer service should be ready to serve you 24/7/365.
You need to also check if there are any reserves, this reduces the amount of money credited to your account.
What is the cost of semi truck factoring?
Cost of semi truck factoring:
Factoring companies reduce an invoice commission/ cut from your bills submitted. The commission is about 1.5% to 5% depending on the factoring volume and size. For some companies there is a reserve also which would be deducted from your invoice amount, this will be paid back only after the customer pays the factoring company.
What is recourse and nonrecourse semi truck factoring?
Recourse and nonrecourse semi truck factoring:
In recourse factoring, if the trucking company surrenders their trucking invoice and gets paid instantly. But if there is a payment problem from the broker/shipper side when the payment is due. The trucking company bites the bullet and should pay the factor.
A non-recourse factoring program takes the risk away from trucking companies if a freight broker/shipper fails to pay an outstanding invoice.
In no recourse factoring if a broker/shipper fails to pay in certain occasions like bankruptcy or insolvency etc the factoring company takes the hit. This means the trucker or owner-operator is safe from risk arising from nonrepayment.
Is the semi truck factoring worth it?
Semi truck factoring is worth it!
If a trucker/driver/owner operator factors he/she gets cash or liquidity instantly. This means he/she doesn’t need to wait for the payment cycle to be due to get paid. Due to this, the semi trucker can pay operational, fuel, and maintenance expenses when it arises.
The other option for a trucker/driver to get a cash injection into his/her company is to go for a bank loan which will have a hefty interest cost and the process of getting it is cumbersome.
The other option is to go for a Quickpay from a broker which is fast but it’s only provided by a few brokers.
What are the merits and demerits of a good semi truck factoring contract?
Merits and Demerits of semi truck factoring:
Merits of semi truck factoring:
Easy way to inject liquidity into your business
Low invoice/ bill commissions or factor cuts
It’s a short and long term liquidity option
Demerits of semi truck factoring:
Invoices must be paid in 90 days
Should have quality and highly creditworthy customers to start factoring
Control of accounts receivable is lost
Taking credit based on accounts receivables in hand is not possible.
What are the additional benefits of joining MaxTruckers semi truck factoring?
Added benefits of joining MaxTruckers semi truck factoring program:
Fuel cards: MaxTruckers provides you with a TCS fuel card. This card gives you an average rebate on a gallon of fuel. The cards are taken at 1000 odd fuel stations and truck stops in the USA and Canada.
This card can be used to get fuel, do maintenance and upkeep, get supplies, fund driver amenities, oil and tire change, etc.
The cards are set up through the fuel card company. But, the funding is generated through the factoring agreement.
Fuel line of credit: MaxTruckers provides you fuel line credit, which you can use to fill up fuel and run to take your next high-paying load without any issues.
Flexible load volume requirements:
MaxTruckers factoring allows you to factor at a competitive rate, factor partially or fully also you can decide which invoices to factor. MaxTruckers factoring provides you funds according to your priorities.
Positive contract terms that favor semi truckers:
A good contract with factor is going to the great ambiance in your relationship with the factoring company. You need to go through the fine print and see what are features of the contract. You need to know, how long is the contract? Is there a termination fee or what are hidden conditions or hidden fees etc?
You should go for a month-on-month contract with the factor, you should not sign the contract if there is a lockin period. You need to also see if there is a termination fee, which might be a hefty sum, you will have to operate at a position of loss if you don’t know bout it early. Also do not accept hidden fees like paperwork fees or credit check fees etc.
Factoring companies should accept photos, scans, and copies of the invoice/BOL, etc. These companies should proactive, robust, and fast web portals or mobile apps to upload load paperwork. They should also allow you to email the documents. Any, factor that asks for originals is making the process complicated, so you must not factor in them.
Best Customer support:
Most truckers go for a long-term relationship with factoring companies. So robust, helpful, and dedicated customer support is essential for the success of the relationship. MaxTruckers provides you with a MaxTrucker buddy who is a dedicated customer support representative who will help you with factoring, insurance. load dispatch and other trucking services.
Fast and Pain-free approval:
During the MaxTruckers factoring approval process we look at the credit score and history of the client/shipper. Nothing else is considered for approval so it is a very fast approval process.
Rapid Cash payments:
Good factoring company pays fast, usually they pay within 6hours of load paperwork submission. Factoring companies make payments on invoices with in 24hours.
DAT Load board Subscription:
MaxTruckers provides you with a one-month free trial of DAT TruckersEdge load boards, the industry-leading loadboard in the USA. With it, you can hunt, find and negotiate high-paying loads from your mobile and desktop. Every day DAT TruckerEdge hosts 600,000 unique loads, you can put your trucking company in hyperdrive using DAT TruckersEdge.
300 member broker list for new MC owners/drivers:
We understand how hard it is to work as a new MC operator/trucker, so we have created a list of 300 brokers who are ready to work with new owner-operators.
Trucking Startup Friendly:
We know how hard it is for a trucking startup to survive in the hyper-competitive trucking space. We provide you with the tools, operational acumen, and contacts to prosper in all facets of trucking. Maxtruckers also provide knowledge resources, tools for the operation, due diligence. We provide vital services insurance like factoring, bookkeeping, etc for fresh of the blocks trucking companies.