You’re tired of waiting a month, two months, or even three months to get paid for the loads you haul. Your creditors don’t feel bad that you’re not being paid. They want their money now, and they’ll slap you with late fees if you don’t pay on time. How do you get the money you need to pay your bills when your brokers and shippers are taking their time paying up?
Invoice factoring is the perfect solution to this dilemma. If you have clients who take too long to pay, but you don’t want to drop them because it’s good money, partner with a freight factoring company to ensure you’re being paid in a timely manner. In fact, many freight factoring arrangements offer same-day or next-day payments, which is ideal for growing your trucking business.
First, Understand What Freight Factoring Helps You Achieve
The first step in finding the right freight factoring partner is to know what it helps you achieve. All companies will factor your invoices, but some do much more. You need to consider what a company offers and fine-tune your choice to the services you need the most.
For example, you want to get paid quickly. Some companies can pay you when you pick up the load or after you’ve delivered it. Which best suits your needs? If you need to have money for fuel, especially when you’re a new trucking company, you may find it best to get the partial payment when you pick up the load.
Another thing to consider is how you submit the bills of lading when you do pick up and drop off the loads you haul. Scanning and faxing bills of lading may be how things used to happen, but times have changed. It’s faster and easier to take a photo of the paperwork and submit it through an online app. Plus, this step keeps you from ever needing to create an invoice with some companies. They’ll build the invoice for you and all you need to do is import it to your accounting software.
With Saint John Capital, send us your bills of lading through our free app and we can pay you when you pick up the load or after you deliver it. If you submit your request before noon EST and have an SJC Visa card, same-day payments are offered. You get the money you need to grow your business in the fastest manner possible, which can make a big difference.
Second, Research the Fees and Factoring Rates
The next step is to look at the fees and factoring rates. The way freight factoring works is that the company takes a percentage of the money you’re owed as a processing fee. The lower the fee, the more money ends up with you.
Factoring rates are one of the first fees you’ll find. This is the percentage taken out from the money you’re due. With Saint John Capital, factoring rates are based on how many trucks are in your fleet. The rates are:
- 11+ Trucks – 1%
- 7 to 10 Trucks – 1.25%
- 3 to 6 Trucks – 1.5%
- 1 or 2 Trucks – 1.95%
Some companies charge you subsequent fees. When possible avoid working within companies that charge these fees. A subsequent fee is a fee charged if your client hasn’t paid the freight factoring company within a certain amount of time. Essentially, you’re penalized because the broker or shipper pays late. It’s not your fault, so it shouldn’t be a fee you have to pay.t
Another fee you may come across is charged by banks. Bank transaction fees are charged to send money from the freight factoring company to certain banks. You may already be familiar with bank fees. If you use a credit card to pay a bill, some companies charge you the 3% banking fee that credit cards charge rather than losing out on that 3%. When you factor your invoices, you can also sign up for a fuel card or business credit/debit card as a way to avoid excessive bank fees.
Third, Learn How to Contact Customer Support
Find out how you contact the company if you have questions or need help. Ideally, you want a system that’s easy to work with. Phone support may work for some, but you might not have time to be on the phone. Can you email the company? That makes it easy to respond when you’re available. Plus, you have a written response to keep in your records.
Fourth, Check the Company’s History
Is the freight factoring company new or do they have a long history in the industry? The longer they’ve been in business, the more knowledge and expertise they have in helping you grow your business through freight factoring and other services they may offer.
Saint John Capital was founded in 2009. We were one of the first to join Blockchain in Transportation Alliance and have held memberships with the American Factors Association, International Factoring Association, and Secured Finance Network.
Fifth, Find a Factoring Company That Offers Other Perks
Look into the other perks that the freight invoicing company offers. If there are additional services and programs that can help you run your trucking company, you’ll benefit by partnering with them. Some of the options to consider are:
- Fuel Cards
A business fuel card that gives you discounts on every gallon of gas or diesel saves a lot of money. You’ll have a credit card to use at the pumps, and you’re getting substantial discounts on every fill-up, too.
- Click & Pay API
You want to be able to quickly submit bills of ladings and get paid. Click & Pay API does this. You can upload a photo of a bill of lading, request payment, and have it generate an invoice that you can upload to your accounting software like Quickbooks.
- Lines of Credit
To grow your business, you may need a line of credit to put towards repairs, new trucks, or a building of your own. A line of credit with favorable interest rates is a great way to grow and improve your trucking company.
- Find Loads Apps
One of the best ways to improve revenues is by finding loads to ensure trailers are full. Say you have a truck heading down to Atlanta, but it’s only half full. You could double your revenues by finding a second load to fill the empty space. With Saint John Capital’s Find Loads app, you can search by region, price, etc. to find loads for your drivers on the trips down and also for the return trip.
- Load Tracking Services
When your drivers are on the roads, have you ever wished you could track them via a live map? With load tracking services, you can do this. They may be unable to call and report in when they’re driving, but you can pull up a map and use the power of GPS to find exactly where they are and report to clients how long before they arrive.
Saint John Capital has the lowest rates in the industry, which already puts us ahead of the competition, but we also offer a lot of added perks. It’s free to create an account, and you’re under no obligation to factor every invoice with us. Pick and choose as you wish and try out our service. When you learn how convenient it is to get paid immediately and end the 30+ day wait period to get paid for hauling loads for your brokers and shippers, you’ll wish you’d signed up sooner.