Frequently Asked Questions about Factoring for Small Trucking Companies

Question 1

What is factoring, and how can it help a small trucking company?

Accepted Answer

Factoring is a financial service that helps small trucking companies improve cash flow by selling their invoices to a factoring company for immediate payment, rather than waiting for brokers or shippers to pay.

Question 2

What is the difference between recourse and non-recourse factoring?

Accepted Answer

The difference between recourse and non-recourse factoring is who bears the credit risk if a broker or shipper fails to pay an invoice. With recourse factoring, the trucking company is responsible if the invoice isn't paid. With non-recourse factoring, the factoring company may assume certain approved credit risks, subject to the terms of the agreement.

Question 3

How quickly can I receive funding for a delivered load?

Accepted Answer

Funding for a delivered load through factoring can typically be received within 24 hours, and often same-day, depending on the factoring company and when documentation is submitted.

Question 4

Are there hidden fees or long-term contracts I should be aware of?

Accepted Answer

Some factoring companies may have hidden fees or require long-term contracts. It's important to carefully review the terms, ask about all fees upfront, and understand the contract length and cancellation terms before signing.

Question 5

Can a startup or newer trucking company qualify for factoring?

Accepted Answer

Yes, startup and newer trucking companies can often qualify for factoring. Factoring companies typically focus on the creditworthiness of your customers (brokers and shippers) rather than your company's credit history, making it accessible for new businesses.

Frequently Asked Questions About
Factoring for Small Trucking Companies

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