Invoice factoring is an excellent way to improve your company’s overall cash flow, which can become sluggish due to slow-paying customers. The best factoring companies for trucking, brokers and businesses will purchase your invoices and pay you more than 80% of their face value upfront.
This allows you to fund payroll, purchase inventory, or meet other financial obligations.
Also, the best factoring companies for small businesses and brokers provide at least a 90% advance fee and fund in as little as one day. Customers typically pay invoices within 30 to 90 days, with 65 days being the global average.
Furthermore, a factoring company will give you the money upfront if you pay a small fee, usually between 5% and 8% of the total invoice amount. You won’t have to worry about how to get your money.
This article rated the best factoring companies for freight brokers, brokers, small businesses, and trucking. Our rating is based on the amount they will factor, their process and cost, and the speed at which you can receive the money.
But let’s go over some basics…
Best Factoring Companies 2023
RTS Financial: Best for industry-specific services.
RTS Financial provides easy and integrated factoring services, particularly for transportation companies seeking control over their receivables. Since its beginning in 1986, RTS Financial has worked with thousands of transportation companies in the United States and Mexico, establishing itself as an industry leader.
RTS Financial will advance up to 97% of the entire amount on invoices submitted via its web-based interface, RTS Pro. It can offer funding in as little as 24 hours and has no ACH or invoice-uploading costs.
Aside from invoice factoring, RTS Financial offers additional services that trucking firms may find useful. Its Fuel Card program provides businesses with discounts at over 2,000 gas stations around the United States. At the same time, its ProTransport software solution is intended to assist trucking companies in increasing efficiency while decreasing expenses.
RTS Financial offers special discounts to military veterans.
Triumph: The best option for same-day funding.
This is another factoring company that assists truckers and freight companies in obtaining same-day or next-day funding. Triumph aims to get your money ready as soon as possible, whether you own a single truck or an entire fleet.
Triumph customers can conduct limitless credit checks on current and potential clients through the MyTriumph web site, assisting them in avoiding untrustworthy consumers of their own. MyTriumph provides real-time feedback on invoices, notifies you of invoices that require your attention, and links you directly with Triumph’s customer support team if you require assistance.
Triumph does not publish its qualification requirements, and you must contact the company to acquire a quote.
AltLINE: The most adaptable
AltLINE, which operates under the auspices of the Southern Bank Company, eliminates the requirement for an intermediary to obtain funds. Clients will benefit from cheaper expenditures as well as increased dependability and trust.
Staffing, distribution, manufacturing, consultancy, food and beverage, wholesale, textile and clothing, oil and gas, professional services, and other industries are all supported by altLINE. It offers factoring to both startups and more mature enterprises without requiring a previous operating history.
altLINE also provides accounts receivable (AR) finance, which is useful for businesses who like to maintain control over their payment process.
TCI Business Capital: The best option for large amounts of funding.
TCI Business Capital has assisted thousands of firms in various industries, including trucking, employment, manufacturing, communications, and oilfield services, since its inception in 1994. This provides some of the highest investment amounts in the business, with options ranging up to $20 million.
You can acquire a real-time quote of the fees you’ll have to pay by entering your typical sales, chosen payment periods, and an advance rate of 70%, 80%, or 90% into TCI Business Capital’s web page. TCI Business Capital requires a total minimum invoice value of $50,000 per month, making it unsuitable for smaller enterprises.
Aladdin Capital: The best option for small businesses.
Aladdin Capital provides specialized factoring for businesses (including fleet factoring) and manages its clients’ accounts receivable billing and collections. The fleet factoring program at Aladdin Capital is specifically designed for trucking companies with 10 or more trucks and provides same-day or next-day loan clearance.
Aladdin Capital also provides equipment leasing, finance, and regulatory compliance services to help your business grow without making costly mistakes. Work computers, specialist vehicles, office equipment, and other items can be financed, allowing you to stretch out the cost of major purchases over time.
TBS
TBS offers a variety of user-friendly tools and technology to assist trucking companies in growing their enterprises and managing their finances. These features include live chat available 24 hours a day, the Get Paid App for independent trucking owners, and a fuel finder that enables access to inexpensive fuel across the United States.
TBS provides fuel discount cards with savings of up to 90 cents per gallon – a very impressive rate — as well as same-day invoice payments. TBS also has a scheme that allows customers to finance up to 50% of their truck insurance down payment over the course of eight weeks using factoring invoices.
Apex Capital Corporation
Apex Capital is one of the industry’s fastest factoring businesses, allowing you to obtain payment just minutes after purchasing freight bills. It’s new digital payment system, blynk, provides the speed, ensuring you are paid securely and on time.
Apex Capital’s full-service factoring package includes free credit checks, a mobile app with picture capture, recourse and non-recourse choices, access to its load board for carriers, shippers, and brokers, and an Apex TCS Fuel Card with 69 cents per gallon discounts.
Apex Capital offers factoring to businesses around the clock, including weekends and bank holidays.
TAFS: Best for trucking.
TAFS is a prominent transportation factoring company that offers dependable accounts receivable (AR) finance. They frequently provide payment within an hour or two while maintaining competitive rates with the rest of the business.
The TAFS mobile app lets clients to upload invoices directly from their cellphones while also providing truckers with fuel discounts, free credit checks, and back-office support.
TAFS is a recourse-only factoring company, which means that if a customer does not pay their invoice, you will be responsible for paying for TAFS’ services.
Is The Best Factoring Companies Worth It?
Working with the best factoring companies for small businesses can be beneficial if you need to manage cash flow issues or pay short-term expenses. It can also be useful if you’re unable to obtain bank financing or require faster access to capital.
If you don’t mind giving up control of your invoices and trust the best factoring companies for small businesses to deal with your customers professionally, then factoring may be a better option than invoice financing.
The following are some of the benefits of choosing the best factoring companies for small businesses, brokers, freight brokers, or trucking:
There’s an increase in cash flow
The best factoring companies for brokers can assist you if you require working capital to bridge a cash gap while waiting for customers to pay their invoices.
Customers can pick from a variety of payment options
With the best factoring companies for trucking and small businesses, you can keep your payment terms while keeping your business running smoothly. You can do this even if longer payment terms keep some of your best customers happy.
What Is A Good Factoring Rate?
The factoring fee, also known as the discount rate, can range between 1% and 5%, depending on the invoice amount, sales volume, and creditworthiness of your customers. It also depends on whether the factor is “recourse” or “non-recourse.”
The factor type refers to who is ultimately liable for an unpaid invoice; your company or the factoring company.
If the contract is a recourse factor and the customer fails to pay, you may be required to purchase the unpaid receivable from the factoring company or replace it with a more recent receivable of equal or greater value. If you use a non-recourse factor, you are not required to repay or replace the unpaid receivables, but you will most likely be charged a higher transaction fee.
This is because the best factoring companies assume the additional risk of not receiving their money back.
How Do I Choose The Best Factoring Companies For Small Businesses?
There are different ways you can choose the best factoring companies for trucking, small business, or freight brokers. They include:
Choosing based on a specialist in the Industry:
The best factoring companies for freight brokers, trucking, and businesses come in all shapes and sizes. When looking for an accounts receivable factor, the first step is to find one who understands your business model and the industry in which you operate.
Working with an accounts receivable factor who understands your company’s unique characteristics ensures that the ongoing factoring process runs smoothly. Choose a funder who is familiar with your industry.
The flexibility
The amount of flexibility offered to clients is the second factor to consider when shopping for the best factoring companies for brokers, trucking, or small businesses. A wise business owner will ask potential factoring candidates some or all of the following questions:
- Is there a time limit on how long I must stay in the factoring relationship?
- Do I have to sign a personal guarantee, agreeing to be personally liable for any unpaid invoices?
- Is it necessary for me to sell all of my invoices?
- Is it necessary for me to factor in invoices for all of my customers?
- Are there a minimum number of invoices that must be factored in the case of a new business? And, if so, what are the consequences if I fail to meet the minimum requirements?
- Is there a maximum amount that can be funded in the case of a rapidly growing business?
The customer service
Time is money in the business world. It is a huge waste of time to have to navigate a difficult phone system and to be put on hold for long periods. This can be easily avoided during the research phase of selecting the best factoring companies for brokers, trucking, or small businesses.
The best factoring companies for freight brokers are the ones that are available when their clients require it. During the sales process, keep an eye on response times for both email and phone communications.
The stability
It is more important than ever for both small and large business owners to secure funding from a reputable invoice factoring company. It is just as important to work with a factoring firm that has a proven track record in the factoring industry as it is to find a factor that understands your business model.
One method is to select the best factoring companies for small businesses or large businesses that belong to the International Factoring Association (IFA). IFA-member factoring firms adhere to a strict code of ethics and business practices.
The pricing
Before diving in headfirst and talking numbers, it’s a good idea to understand how the best factoring companies for brokers and businesses structure their fees. When a factoring company advances money on receivables, it is essentially making a legal purchase of the invoices at a reduced rate.
This discount could be a one-time flat fee. It can also vary depending on how long the factor owns the invoice, with the factor charging a certain percentage based on how long it takes for the invoice to be paid.
How Much Do The Best Factoring Companies Charge?
The best factoring companies for brokers and businesses charge a factor fee to the business client. This is the fee they charge for the advancement of funds. This fee can be thought of as a discount rate.
For example, if a factor fee of 1% is applied to a $30,000 invoice, the fee is $300. Keep in mind that the 1% rate in this example is likely to increase to 2% weekly, and 5% by the third month.
Factor fees typically range from 0.75% to 5%. The longer it takes your customer to pay the factoring company in full, the higher the factor rate rises over time.
How Can You Sign Out Of A Factoring Contract?
To get out of a factoring contract, you must determine when your current factor’s contract expires and what fees may apply if you terminate early. Your contract term is typically found in your factoring agreement’s “Termination Clause.”
Before making a decision, you should think about the costs of switching. You must give notice once you have decided to leave your current factor.
To terminate the contract, all the best factoring companies for trucking, brokers, or businesses require written notice. The renewal date is usually 30 to 60 days in advance.
You must determine whether your termination notice must be delivered by mail or if electronic notice is sufficient.
What Percentage Does OTR Capital Charge?
OTR Capital is one of the best factoring companies for freight brokers that provides small businesses funding for the construction, trucking, staffing, and government contract industries. Its non-recourse coverage, fee transparency, and excellent customer service are superior to or competitive with those of the other companies evaluated.
The majority of the best factoring companies for freight brokers and various businesses provide both recourse and non-recourse factoring. When using a non-recourse option, the factoring company assumes the risk of an invoice not being paid. The inverse is recourse.
If a broker fails to pay the invoice, the trucking company must be reimbursed. As a result, non-recourse factoring coverage is an important comparison indicator.
OTR charges 2-4% for non-recourse options, depending on the size of the company and the risk involved. The non-recourse contract from OTR Capital is simple to understand.
Many reviewers felt that OTR provided an open and honest discussion of their process. Importantly, they promised to pay regardless of what happens as long as your delivery is on time, undamaged, and complete, and OTR is notified of any advances on the delivery ahead of time.
Is Apex A Good Factoring Company?
Apex is another one of the best factoring companies for freight brokers. There are numerous reasons to choose Apex for your freight factoring needs. This includes its quick payment and a low flat rate of 2%.
If you’re confused, Apex offers advances on unpaid invoices to shipping and freight companies to provide them with more liquid capital. This service enables businesses to capitalize on time-sensitive opportunities.
Conclusion
The best factoring companies for trucking, brokers, and businesses help you to purchase your invoices. They also pay you more than 80% of their face value upfront. With such companies, you can fund payroll, purchase inventory, or meet other financial obligations.
Also, the best factoring companies for brokers and businesses provide at least a 90% advance fee and fund quickly. Using a factoring company for your business can help improve your business and satisfy some of your needs.
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