by Ashley Wilks
Many fleets have seen the benefits of factoring and how it serves as a valuable part of their business. A solid, reputable factoring company can provide support for your overall financial strategy and help your gain an advantage in today’s competitive trucking market.
But when you’re looking for a factoring partner to help you navigate growth or cash flow challenges, there are more aspects to consider than their standard rates.
To find a partner that will work in your best interests, you need to look beyond the total cost and see the big picture. It’s important to view factoring as a financing strategy conducted over a period of time – not just a way to get quick access to cash in the short term.
So, before you begin the search for a factoring company, know exactly what you need and ask a few key questions:
Some factoring companies charge a weekly or monthly fee, which is a percentage of the invoice value. While one company may have lower rates compared to the competition, you don’t want to overlook additional fees that could prove costly in the long run. Watch out for hidden costs such as application fees, credit check fees and processing fees. Will you be paying extra for additional services, and which portion of your overall cost is interest?
Because the factoring company may collect payment on invoices directly from your customers, you want to ensure that they are fair and respectful when completing these transactions. Whether we’re running credit checks on potential customers or performing collections management, our primary goal at WEX Fleet One Factoring is to provide excellent customer service to not only our customers, but to their customers as well.
Having access to services that will analyze the credit of your fleet’s customers and collect invoice payments allows you to be more efficient and focus on other important aspects of your business. Many factoring companies may be able to alleviate the significant burden associated with accounts receivable and collections.
Take a moment to see how the factoring company manages this process. For example, WEX Fleet One Factoring offers easy online invoice upload through FleetDocs, which allows drivers to electronically submit invoices for quick funding.
Contracts and Other Considerations
Before you sign on the dotted line, look carefully at the terms of the contract. The factoring company may require that you maintain a relationship with them for a certain period of time – and there could be substantial penalties for terminating the contract early. Also: Factoring companies may offer different credit line sizes. The size of your invoices and the total credit line you need should help determine which factoring company you choose.
Understanding these components will help you determine if the factoring company can lead to more efficient operations for your fleet. At WEX Fleet One Factoring, we can put money in your bank within 24 hours and assume the full credit risk for payment.
Factoring can help your fleet expand and give you an opportunity to free up valuable resources and focus effort on generating new business. But before you make a commitment to partnering with a factor, it’s important to research your options and ensure your factoring partner has your (and your customers’) best interests in mind.
Are you a Fleet Owner looking to grow your trucking business but limited with current financing options?
We can help you get paid faster for loads delivered and protect your fleet from lost revenue.
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