Freight Bill Factoring

Factoring is simply the purchase of your invoices. The object is to generate instant cash to operate your business.

Carriers factor their freight bills to eliminate the cash flow problem that is inherent in the business because of the time lag between the mailing of the freight bill and receipt of the payment. It is not unusual for this to be 30 or more days and out-of-pocket operating expenses for this period can be substantial. There are many different types of factoring programs, and choosing the correct one for your business is an important decision.

Brokers factor their invoices so they can offer their carriers a "Fast Pay" option. They simply factor the freight bill when they receive carriers paperwork and they can then pay their carriers within 24 hours. This, in turn, makes it easier to find carriers to move loads because it eliminates a worry about getting paid by the broker. It also eliminates the need for the carrier to factor the freight bill.

Here is a summary of how it typically works:

You deliver goods (or services) to your customer.
Your customer accepts delivery and signs a delivery receipt.
You e-mail the invoice and backup documents to the factoring company.
The factoring company advances up to 95% of your invoice.
The factoring company bills your customer.
Your customer pays the invoice amount to The factoring company.

If you would like more information about factoring, including pricing information, the company I would recommend is TAFS (TransAm Financial Services, Inc.) TAFS has an excellent reputation and I get great feedback about them from customers who I have helped to obtain their carrier or broker authority.

Here is a sampling of some of the features the TAFS service offers:

No long-term contract
No Cost to Get Set Up
No Monthly Minimum
Same Day Approval process
No Per Invoice Fee
Free Online Credit Checks
24/7 Real-time Online Account Management
Invoices Imaged and Archived
And, the frosting on the cake is Fuel Discounts That Crush the Pump Price!