*Article contributed by Sarah Williams.
Having a steady cash flow is crucial in the growth of any business. The same principle applies to the trucking and transportation industry. Aside from the constant stream of clients and bookings, having enough funds to pay all operational expenses is always preferred. Ideal as it may sound, this is not always true in the trucking industry.
You may have regular clients and bookings, but these clients usually pay between 30 to 90 days. It is where freight factoring comes in handy. While waiting for your clients to pay, you can continue your operations and get as many wheels rolling with the funding from factoring firms. All you have to do is apply for a cash advance, assign your unpaid invoices, and wait for the factoring firm’s approval. You can get your money on the same day, too.
With the number of factoring firms increasing, it is fitting to find one that will serve as your reliable business partner. Since services and terms vary, it is crucial to spend time studying your prospective partners before selecting one. So, how do you start choosing?
Check for factoring companies within your area
The first thing that you should do before scrutinizing each factoring company is to determine all your choices. You can check the web for a list of factoring firms in your locality, or you can ask from your network of trucking service providers for referrals. Once you determine these companies, make a list to make narrowing down choices easier.
Research on the services offered by these companies
Limit your choices to three to five factoring companies. Consider proximity and accessibility in narrowing down your options. After short listing three to five freight factoring firms, study the services offered and the terms and conditions of the same. Give careful attention to the requirements, application process, cash advance rate, and admin fee percentage. Compare and contrast these factors to see which one among them is the most accessible and beneficial to your business.
Check for customer feedback
Since you will be working with these factoring firms for a particular time, you have to make sure that they are credible and trustworthy. Check the feedback given by their previous customers. Find out if they have issues in disbursing cash advances, wiring payment excesses, or maintaining relationships with your clients. Remember, it is the factoring company that will be receiving payment from your clients, so keeping a cordial relationship with the debtors is also essential.
You can read the feedback from the company’s website, but it is better to look for more raw and impartial inputs in search engines. You can also ask the people that you know who have tried their services for constructive feedback. It will help you assess whether or not it is right for you to work with these companies.
Talk to the company
It will also help you decide better and level-headedly if you get the chance to speak with the company representatives. Ask them everything you want and need to know about their services. If you have clarifications, raise them as well. Talking to the company representatives will also give you an idea of the culture and working methods of these people. Along the way, you also get to test if you will be comfortable working with them in the long run. You may need immediate help in increasing your cash flow, but do not let this be the reason to work with just any factoring company blindly. If you spend time studying the services and offerings of these companies, you have a high chance of landing a reputable one.
*Article contributed by Sarah Williams.