You might have to wait up to 90 days to get paid for your freight bills. Find out how "factoring" can help you get paid in just one day.
Freight brokerage is a business that can make a lot of money. As far as money goes, being a freight broker can be very rewarding, but it can also be very hard. Even more so because the drivers count on you to pay them quickly. And most of the time, your clients won't pay you for 30 to 60 days.
So you have something to do. Your drivers want to be paid quickly, but your clients want to pay slowly. The numbers don't add up. If you don't have a lot of money in the bank, it will be hard to pay your drivers. And trying to get money from a bank won't work. Banks always give you money based on what you've done in the past. What if you're a new freight broker or one who wants to grow?
Freight broker factoring is a better way to get the money you need to pay your freight bills. When you use freight factoring, you get money right away for your freight bills. This lets you pay your business bills and, most importantly, your drivers. Freight factoring is also easy to get compared to business loans. When deciding whether or not to give you credit, banks usually look at your past. Factoring companies, on the other hand, look at what you could do in the future. The most important thing is that you do business with people who have good credit and pay on time.
If you are a freight broker, factoring your freight bills may be a little different from traditional factoring. Most things will work together to help you find a way to pay your drivers on time since this is so important. Some people may even pay your drivers for you, which would help you with back-office work.
This is how freight broker factoring works:
- You can use the money right away, but the factor has to wait to get paid.
- Once the freight is delivered, you send the factor copies of the documents.
- The factor gives you up to 100% of the freight bill (less a fee).
- The transaction is over once the client has paid.
The fact that it is easier to get than a business loan is one of the best things about factoring. Also, unlike business loans, factoring financing grows as your business does. The more you bill, the more money you can borrow.
