Most of the new transportation and trucking companies today know that in order to progress prompt payment by the clients is absolutely necessary, but this is definitely not the case in most situations. The invoice might be paid late and delayed for even more that 30 days leaving you in a tight spot which might result in the delay of important shipments. The business of trucking demands cash in order to pay the drivers, for repairs or breakdown and fuel. If you do not have cash in hand for these demands then your business may not be as pleasurable experience. This problem is however a thing of the past for the trucking companies today due to the introduction of a system called freight bill factoring. Freight factoring enables you to maintain a steady cash flow without having to worry for late payments from your clients. It can get your bills paid in a couple of days itself. With a steady cash flow you can pay your drivers on time as well as tackle repairs and gas expenses.

Without the option of freight bill factoring you would be limited only to some kind of business financing which is obviously much more difficult to obtain as compared to freight factoring. Before issuing a business loan the lending firm would thoroughly examine all of the aspects of your company. In order to qualify for the financing your business would require some years of solid financial statements with a good and reliable background. New and upcoming companies will probably have some issues in meeting such stringent requirements. This is why most of the trucking companies choose freight factoring over the hassles of traditional business financing.

The whole process of freight factoring is very much straight forward. First you complete the shipment and get a freight bill. You then present the freight bill to the given factoring company which will then pay you an installment of about 90% of the original freight bill. Your company will actually get paid almost immediately while the factoring company waits for the actual payments to be done by your clients. Now once the company gets paid the remaining of the fees is returned to you in the form of a second installment. The factoring rates can vary depending on the duration of transaction, volume and customer.

Some of the benefits of trucking factoring are:

• It helps you to get paid immediately instead of waiting for your clients.
• It helps you to completely focus on your business that is trucking and not worry about the payments from your clients which would be the responsibility of the factoring company.
• Newer companies may hold a better chance to obtain factoring services as opposed to a business loan.