Cash flow challenges are all too common in the trucking industry. From waiting for customer payments to needing to pay for fuel and fleet repairs, it seems there is always something preventing you from keeping a consistently positive cash flow. Invoice factoring can be a much better solution than halting operations as you wait for payment. With the money you need in hand, you can keep your trucking business rolling.

How Invoice Factoring Works in the Trucking Industry

When you deliver freight for a customer, you send them an invoice and typically provide them 30 to 90 days to pay in full. That can seem like forever when your trucking company needs the revenue. With invoice factoring, you sell one or more of your accounts receivable invoices to a factoring company. Upon approval of your application, the factoring company forwards you the approximate face value of the invoice less its fees and any amount held in cash reserve. You should receive the remainder of the reserve once your customer has paid the invoice.

Since the factoring company makes its approval decision based on your customer’s credit, you can qualify for this type of alternative financing even if you don’t have perfect credit. You should choose invoices to factor from your most loyal and reliable customers. While the factoring company technically owns the invoice after you sell it, you could potentially be liable for repayment if your customer defaults. Choosing invoices from only your best customers helps to reduce the risk.

Trucking is a competitive business, and you need to offer generous repayment terms to attract customers. With invoice factoring, you can keep operations going uninterrupted and never feel hesitant to take on a new job or client.

Have Unpaid Customer Invoices? Contact Increase Lending Today for Invoice Factoring

Factoring is one of several alternative financing options we offer to trucking company owners here at Increase Financial. We invite you to contact us today to learn more about how we can help your business grow.