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How Does Freight Factoring Work?

Sometimes, you don’t want to wait to get paid. You’ve delivered a company’s merchandise, but you have to wait a month or two for them to pay your invoices. It would help if you had cash now. Urgency is a leading reason to consider working with a freight factoring company.

Freight factoring, also known as trucking factoring or transportation factoring, is a process where a carrier sells unpaid invoices to a freight bill factoring company. The carrier receives payment, often within 24 hours, minus the fee. You get paid right now, and the freight factoring company waits for the client to pay. It’s not a loan. It’s a cash advance. It puts money in your hands much faster than waiting for your client to pay

Why would you want to get paid faster? Say that you have an invoice that will cover the cost of a new truck. Your client has up to 90 days to pay up. That’s three months to wait before you get the new truck. Or, you could pay a small fee, get the money within a few days, and be able to double the number of loads you accept as you quickly grow your business.

There’s another benefit to transportation factoring services. You’re a busy business owner. You spend hours each day talking to clients, scheduling loads, keeping tabs on your drivers, and taking care of tasks like hiring, marketing, HR, etc. You struggle to find enough hours in the day to also track down late payments. You spend hours making sure clients received the bills of lading you’ve submitted and ensuring they have your payment scheduled. You’re tired of wasting time.

How Freight Factoring Works

The first step to signing up with a freight factoring company is to fill out the application. The company will go over the application and send you a contract that covers the factoring fees. Your clients are also looked at during the application process. The company will let you know which customers are approved for the freight factoring plan.

Once you’re approved, you take jobs as usual. When you’ve picked up and delivered a load, send the bill of lading to the freight factoring firm and receive a portion of the payment due minus the freight factoring company’s fee. It’s now up to that company to collect payment from your client. If you have a client who doesn’t pay on time, account representatives will track down payment. You no longer have to sit on the phone and chase down payments on outstanding invoices.

What’s important to consider is how much of the money you can get at once. Some transportation factoring companies will only advance a percentage of the money due. If you only get 70%, you have to decide if it’s enough. It’s advantageous to look at companies like Saint John Capital that offer up to 100%.

You also need to weigh the fee. Most companies charge a fee, and there can be subsequent fees if your client doesn’t pay the freight factoring company on time. Ideally, look for a company like Saint John Capital that uses a flat fee system. You shouldn’t be penalized for your client’s irresponsibility or forgetfulness.

Most freight factoring companies offer additional services that help reduce the time you spend on office management duties. If you no longer have to create and print invoices, handle collections, and have dispatchers finding loads and informing your drivers, it cuts your expenses.

Is Freight Factoring Right for You?

How do you know if freight factoring is a wise decision for your needs? There are several questions you need to ask yourself. Start by looking through past payments and seeing how long your clients take to submit payment. If you’re waiting months, freight factoring is a great way to get paid faster and avoid late fees because you don’t have the money coming in to pay your bills.

Are you having a hard time growing your trucking business because you’re often paid late? If you could do more if your clients paid the same day you delivered their loads, it’s worth taking a closer look at transportation factoring companies. If you’re spending hours upon hours trying to track down late payments, that’s another reason to work with a company that’s an expert in freight factoring.

Why Choose Saint John Capital?

Saint John Capital’s president has more than 20 years of experience in factoring and founded CD Consortium, a $100 million factoring company, before leaving to open Saint John Capital. It was one of the first companies to join BlockChain in Transportation Alliance. Freight factoring is fast and easy and doesn’t require you to create an invoice.

The transportation factoring company prides itself on offering services extending beyond freight factoring in order to help transportation companies grow their businesses. Choose Saint John Capital and embrace low-interest lines of credit, a Saint John Visa card, an interactive load board to help you find loads, so your trucks never travel while empty, and real-time tracking of your drivers and loads via your Android or iOS device. Even your bills of lading are created for you when you take loads from the load board.

With Saint John Capital, you don’t even have to mail or fax your bills of lading to us. Upload them using your mobile device. We offer same-day payments. We can send the payment to your bank account or a Saint John Capital Visa card account. If you use the Visa card, you avoid bank fees. You don’t even need to generate invoices anymore. It’s done automatically and can be uploaded to your accounting software.

When you choose us as your freight factoring company, you enjoy 100% factoring advances. We help trucking companies in the U.S., Mexico, and Canada, so you do not have to be local. We also work hard to give you the most advantageous rates to ensure your success.

Visit our website and fill out the quick application. You need your contact information and motor carrier number. Submit that, and we’ll walk you through the process and help you find loads and get paid quickly.

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