All Freight Factoring Quotes Are Not Created Equal

Freight factoring quotes can vary in dozens of ways. Here are some of the key things to look for that can help minimize the cost and maximize the benefits of factoring freight invoices. 

When you are evaluating freight factoring quotes or and want to (a) get the factoring services that can help your business the most and (b) work with a great freight factoring company, here are some of the criteria you can use to get maximum benefits for your trucking business.

Comparing freight factoring quotes? Here’s what to look for.

One reason we believe we rate among the best in freight factoring is that our team is experienced. We broker business financing now, but our team has more than a decade of experience working in a direct-funding factoring company. We put this expertise to work on behalf of our clients now and it shapes the way we do business and the freight factoring quotes we’re able to put in front of our clients. Our goal is to help our clients get the financing they need to grow to the next level.

Working with us doesn’t cost you more, but it can save you time and money. We’ll source the best freight factoring companies and work hard to get a quote that aligns with your preferences. As you read through the list below, think about the freight factoring terms and conditions that are most important to you, then let us know so we can help you find services tailored to the needs of your business.

5 Things to Look for in Freight Factoring Quotes

Recourse vs. non recourse freight factoring companies

There are more full recourse freight factoring companies there are non recourse freight factoring companies, due to the risk assumed by the factoring company. Transportation factoring companies that factor with full recourse may require a trucking company to buy back an invoice plus pay any associated collection or legal fees related to that invoice that remain unpaid for a certain number of days or are unpaid due to customer default.

Non-recourse freight factoring companies assume the credit risk for the invoices they factor, leaving less financial risk for the trucking company. If a customer is unable to pay an invoice for credit reasons, the non-recourse factoring company takes the loss, not the trucking company.

Full-recourse factors may also require trucking companies to buy back invoices if they remain unpaid for a specified period of time. Non-recourse factoring companies rarely require clients to buy back invoices, generally only in the case that a customer disputes the charge.

We can help you find non-recourse freight factoring services that offer rates and advances comparable to services that factor with full recourse so you can enjoy the added benefits without paying more.

Freight factoring quotes with low factoring fees

A factoring rate, factoring fee, or discount, is the cost of financing an invoice. A low factoring fee means more working capital for your trucking business. We offer freight factoring rates start as low as 1%, and usually range from 1-6%, based largely on the credit risk the factor assumes.

Some factoring companies offer low introductory rates or rates that are applied weekly, rather than just once. Make sure you read through the fine print. If you factor a freight bill that goes unpaid for several weeks, a super-low progressive fee will likely be far more than a simple percentage.

Freight factoring quotes with high advances on factored invoices

When freight invoices are factored, the factoring company generally advances a certain percentage of the invoice to the transportation company, holding the remainder as what is called a “reserve.” The higher the advance percentage means more cash flow available to the trucking company, and the lower the amount of money that will be held in reserve.

If you’re looking for factoring companies with high invoice factoring advances, look no further! We offer factoring advances up to 98% of the face amount of an invoice, holding the rest in reserve until the invoice has been paid in full. Once the invoice is paid, the reserve, less factoring fee (see above) is also paid to the trucking company.

For example, if a freight factoring client that had a 98% advance rate and 1% fee factored a $10,000 invoice with us, the invoice factoring process would look something like this:

• Invoice Amount: $10,000.00
• Advance Rate (98%): $9800.00 (sent to the trucking company the same day the invoice is factored)
• Factoring Rate (1%): $100.00 (the cost of financing)
• Reserve (1%) $100.00 (the amount held until the invoice is paid, then is returned to client)

Freight factoring quotes with no monthly minimums, or no long term contracts

When you are evaluating freight factoring proposals, determine whether you will be required to commit to a long term factoring contract and what your options would be if you decide that you no longer want to factor freight invoices or want to work with a different freight factoring company.

Likewise, find out whether the freight factoring contract will require you to factor a minimum number of invoices or a specific dollar amount with the freight factor on a monthly basis; these would be considered “monthly minimums” and it’s possible that your trucking company could be penalized of they are not met.

We can help you find freight factoring services that don’t require you to commit to factoring minimums. You can factor only when it’s in the best interest of your business. We can also help you find factoring services that don’t require you to sign a long-term contract; again, giving you the option to do what you feel is in the best interests of your business at any time without worrying about crazy-long auto-renewal windows or huge penalties for leaving.  After all, it is your business and you should have the right to manage and make choices that benefit your trucking company!

Add on fees, like factoring proposal fees, funding fees and notification fees

Receiving freight factoring quotes from My Factoring Brokers is free – and there is no obligation to accept. Likewise, we have no hidden fees anywhere in our process – no application fees or due diligence charges. We can help you find factoring services that provide you with free credit checks to help you vet new customers and who don’t tack on funding or administrative fees which would drive up the real cost of financing. When evaluating freight factoring proposals, make sure that you look for hidden fees that can drive the real cost of financing using invoice factoring up, such as:

• Application fees
• Account set up fees
• Due diligence fees
• Credit check fees
• Invoice processing fees
• Transaction fees or funding fees
• Account management fees
• Notification fees
• Reserve release fees
• Next day funding fees
• Contract termination fees
• Penalties for failing to meet monthly minimums

Our proposals and contracts are straightforward and we won’t surprise you with hidden fees or unexpected charges along the way. Complete the freight factoring form below and get answers to your questions about our freight factoring program in 24-48 hours, or even faster.