Freight factoring is worth it in nearly every application for trucking companies. Freight factoring is a worthwhile investment for your trucking company and for many reasons. In this article, we’ll cover the benefits of freight factoring. Let’s dive in!
What is Freight Factoring?
Freight factoring is when a factoring company purchases your invoice, typically for a small percentage of the total, in exchange for faster payment.
There are two types of freight factoring:
Non-Recourse and Recourse Factoring.
Non-Recourse Factoring
The first type of factoring is arguably the best factoring method. Non-recourse freight factoring is when a factoring company purchases your invoice and holds the majority of risk for unpaid invoices. This means that if your customer does not pay an invoice, you’re not going to be responsible for that payment.
Recourse Factoring
Unlike non recourse factoring, in recourse factoring you carry all the risk. Recourse factoring does work similarly in that you still get paid quickly.
Recourse factoring is not a great idea for any business. When looking for a freight factoring company, be sure to NOT use a recourse factoring company, as it will tend to come with the risk and several various fees and contractual agreements.
3 Benefits of Freight Factoring
Freight factoring is a very beneficial service to have for your trucking business. Each factoring company has their own brags, but let’s focus on the benefits of factoring with OTR Solutions.
1. Quick Payments
When factoring with most freight factoring companies, you will often get paid much faster than when you do not use factoring. However, not all factoring companies can pay you as fast as OTR Solutions. OTR Solutions uses our proprietary system called BOLT ,allowing you to get paid much faster than other factoring companies.
Curious to learn more about BOLT? Reach out to our team today!
Another way factoring with OTR Solutions helps you get quicker payments, is by offering you our mobile factoring application, a smart phone application available on iOS and Android operating systems. Our mobile factoring application lets you factor from anywhere in the world from the convenience of your tablet or smartphone.
2. Risk Mitigation
When you opt to choose non-recourse factoring, you will have little to no risk to worry about. Non-Recourse Freight factoring is simply a great choice if you don’t want any risk against your precious cash flow.
3. Dedicated Back Office Support
Back office support is something most factoring companies offer, however, not all offer the level of support that OTR Solutions can offer. We offer general back office support, operations, accounts receivable and even broker and shipper approvals. Our back office support team will guide you through operations, offer advice, and help you get set up for success!
Factoring is Worth It! Factor with OTR Solutions Today!
Ready to get started with factoring? Apply today and get approval within 24 hours to enjoy the many features OTR Solutions has to offer. From our mobile app, to our fuel advance options, OTR Solutions has the tools your business needs to succeed.