Trucking Fuel Advance

Take Your Trucking Company to the Next Level with Fuel Advances and Same-Day Payments

Trucker Fuel AdvanceFuel for a commercial truck costs on average about $70,000 a year. In fact, fuel is the number one operating cost for trucking companies, even exceeding drivers’ pay.  If you run a trucking company you already know this, but consider how having fuel advances can greatly impact your growth. Would having a percentage of your money upfront allow you to deliver more loads? Would it take some pressure off of your cash flow? Would it enable you to grow your company faster?

What if you could get paid for your delivery in as little as 2 hours instead of 30 or 60 days? Would faster payments on your deliveries allow you to buy more trucks, keep your trucks maintained and on the road, make more deliveries, generate more revenue, and ultimately earn you more profit?

Fuel Advances When You Load and Payments On Deliveries In As Little As 2 Hours

By using factoring, you can get fuel advances as soon as you’ve loaded your truck, and full payment on your invoices less the factoring fee when you deliver the load. Plus, you can remove all the headaches of collecting on the invoices. The truck factoring company collects on the invoice and some factors even generate your invoices for you.

Let’s look at an example of how this can work with a transportation company that has 20 trucks in its fleet. If each truck has a $1,000 load, you can get 40% or $400 per truck as a fuel advance when your trucks get loaded. So that’s $400 per truck, per day or $8000 a day. Plus, once you deliver the loads, you receive the remaining 60% for each load, minus the factoring fee, in as little as two hours. In the span of a single day, with 20 trucks making $1,000 deliveries you can earn another $600 per truck or $12,000, less the 1% to 3% the factor charges. If you repeat the process over a 30-day period, that’s $600,000 you’ve brought in 30-days earlier than normal. You can invest the accelerated payments back into your trucking business by growing your fleet, increasing your number of runs, keeping your trucks maintained and on the road, or hiring more drivers.

In addition, many truck-factoring companies use the latest technology so you can account for everything online. If you’re interested in learning more about factoring, contact us with the particulars of your situation.

What Is Spot Factoring for Trucking Companies?

What Is Spot Factoring for Trucking Companies?

spot factoring truckingSpot factoring, also called single invoice or selective factoring, allows you to factor your invoices on an invoice-by-invoice basis. It’s ideal for trucking companies since you can control the number of invoices to factor when you have a cash flow need, but you are not locked into any minimum requirements.

The alternative, offered by some freight factors, forces you to factor all the invoices for a specific customer once you factor any invoices for the customer. This can cost you extra in fees when you have to factor an invoice, but don’t really need to. On the other hand, spot factoring keeps you in control of the factoring process and allows you to use it only when you need short-term working capital.

Factoring and Billing

Many of the trucking factors that provide single-invoice factoring also bill and process the payments of your customer’s other invoices for a flat fee. This practice is similar to other freight factors, but you are not charged the factoring fee on the non-factored, but billed invoices. Also, you do not receive an advance against these invoices. Instead you get 100% of the invoice when the bill is paid.

Here is how the process would look if you had two $5,000 invoices from the same customer and you choose to factor one and bill the other. On the factored invoice, you receive an 80% advance, normally the same day, and the factor holds 20% in reserve. You get the remainder of your reserve, less the factoring fee (usually 1% to 3%) once the invoice payments exceed the advanced 80%. The other $5,000 invoice costs you a flat rate (around $5) for billing, processing and collecting payment, but you do not get paid until the bill is actually remitted (no advance).

Spot vs. Traditional 

The only real negative to single-invoice factoring versus more traditional freight factoring with minimum requirements is you may end of paying a higher percentage in fees on smaller valued invoices with the spot factoring. Normally the higher dollar volume of invoices you factor, the more room you gave to negotiate your fees, rates and terms. So you’ll still need to shop around and compare terms and rates from both kinds of factors to figure out which is best for your trucking operation.

If you plan to use factoring periodically, you’ll probably come out better with single invoice factoring. If you plan to use factoring consistently as a part of your ongoing financing strategy, you may get better rates by committing to a minimum dollar amount of invoices each month. Factoring companies do vary as  do your due diligence.

We’d be happy to help you out. Contact us with the details of your situation and we can help you find the best factoring arrangement for your transportation operation.

The Benefits of Using an Online Transportation Factor

The Benefits of Using an Online Transportation Factor

electronic bill payToday, let’s move beyond the benefits of transportation factoring in general, and talk about the specific benefits of using an online trucking factor. Let’s look at 4 benefits of using a truck factoring company that has a robust online presence.

1. You can submit all documentation and receive payments electronically.
Working with paper is quickly becoming a thing of the past. Many people pay bills electronically and get paid electronically by automatically depositing their paychecks into their bank accounts on payday. You can work the same way with your factoring company. With online access, you can submit your documentation electronically instead of having to mail in original bills of lading and other paperwork. You can also request funding and get your funds wired to your account. That means you don’t have to get back to your office to carry out your administrative tasks. You can do them on the road with an Internet connection. Some companies even provide you payments within two hours of your delivery.

2. You can work on your schedule instead of the factoring company’s schedule.
With online factoring companies, you get 24/7-access with an Internet connection. In only takes a few minutes to log in and submit your invoices. Then you’re back to delivering more loads. You don’t have to work around the scheduled business hours of a traditional factoring company. Controlling your own schedule results in a more efficient workflow, which enables you to haul more loads and earn more money. You can make your deliveries anytime, day or night, and submit your invoices immediately via the Internet.

3. You can access your customers credit status before you haul a load.
Many online factoring companies give you access to their online credit-reporting database so you can check your customers credit status before you deliver a load. Normally, you have a Company ID and password for online access and a toll-free number if you prefer to call for the report.

4. You can use cutting-edge account management websites.
Many transportation factors include access to their account services websites. This allows you to review your business in real-time. Normally, you log into an online dashboard that shows you the status of your accounts and offers you online tools to help you run your business better. You can request rush funding, check cash reserves, review your aging reports and balance, view current invoices, as well as do research on recent payments or deliveries.

By working with an online factoring company, you can manage your trucking business more efficiently. In the end, this saves you time and money and makes you more productive, enhancing your bottom line. If you have any questions or want to learn more, contact us.

9 Questions to Ask When Comparing Trucking Factoring Companies

Trucking FactoringIn the U.S., trucking generates $255 billion in revenue each year. According to American Transportation Research Institute., there are 500,000 trucking companies, but only 4 percent of the trucking companies have more than 28 trucks. The other 96 percent have 28 trucks or less, and 82% have 6 trucks or fewer. So, trucking is a multibillion dollar industry comprised mostly of small, independent operators.

Many of these smaller trucking companies find it harder to access bank loans or wait the 30 to 90 days it takes to collect on invoices. Freight factoring is one way to eliminate these obstacles, especially for smaller trucking companies or independent operators. You’ve likely heard of factoring, and it is basically a way to create cash flow immediately instead of waiting to collect on all your invoices. The freight factoring company pays you 70 percent or more upfront and then collects the invoice payments for you. Once the payments are collected they send you the rest of the payments, less a factoring fee. The fee normally runs from 1 to 3 percent of the dollar amount factored.

Many factoring companies specialize in trucking/transportation/freight forwarding, but the details of their proposals may vary widely. The number of options and the structure of the various agreements can get confusing, so here’s an overview of what to look at when comparing factoring companies.

How quickly can you get funding?
Typically you’ll receive funding after your invoices are received. Some factors provide same–day funding or next-day funding, while others will only fund after verifying your customer’s bills, which can take more than 2 or 3 days.

What kind of service does the company provide?
You need to find out if the factor is hard to get in touch with or if you easily access a live representative with questions or concerns. Do your homework before you set up a long-term arrangement.

Does the factoring company provide credit protection?
There are two kinds of factors, non-recourse and recourse. Recourse factors have the option of charging you back for any unpaid invoices, but the non-recourse factors provide credit protection. This means that you will get paid on the invoice even if the invoice goes unpaid. Since they take on more risk, non-recourse factoring normally costs more.

How much is advanced and how much is held in reserve?
Factoring companies normally provide 70 percent or more in advance and then hold the remaining amount in reserve. The reserve is paid out less the factoring fee once the invoices are paid.

What are the rates and fees?
Factoring rates and fees may vary from company to company based on sales volume, number of invoices or customers, contract period, time before invoice is paid, recourse or non-recourse factoring and other variables. The best way to compare proposals is to figure out the total cost of the fees as a percentage of the dollar amount of the factored invoices.

How are credit checks carried out?
Many factoring companies will check the credit of the customer, shipper or freight broker for you. You need to find out how this is done and how long it takes. You’ll likely want to work with a factor that can quickly approve your customer’s credit and your funding before you transport a load.

How much of the billing is handled by the factoring company?
One of the advantages of working with a factor is that some perform the back office tasks like billing and invoicing. For example, you can send them the bill of lading and a rate sheet and they’ll take care of the rest. Other factoring companies will ask you to do the invoicing and send them copies.

What are the invoice requirements?
You’ll need to find out if the factoring company requires you to factor all your invoices or lets you choose the ones you want to factor. Also, some factors charge fees on the gross amount factored, while others charge you for the net amount (gross amount minus fuel costs).

What is the contract period?
Some freight factors may require a long-term contract from 3 to 36 months, but others will offer you the option of canceling your factoring agreement at anytime. Make sure you understand the fine print and any fees associated with terminating your contract early if you decide on a longer-term contract.

If you have any questions or you’re ready to proceed with factoring, contact us. We can help match you with a factor that meets your desired criteria.

How Freight Forwarders Use Invoice Factoring to Solve Cash Flow Problems

Freight ForwardMany freight forwarders come across cash flow problems at some point. Normally, this results because they have to pay shippers, warehouses and other service providers in the supply chain before their customers pay them. This can create big problems for startups, growing businesses, or any business without cash reserves.

Obviously, if you can’t pay your carriers,(warehouse rent and suppliers) you’re not staying in business for long. Some freight forwarders try to solve this problem by paying more slowly than they get paid, but this creates more problems then it solves. Eventually, two of your most important assets, your credit standing and your business reputation, diminish if you do business this way.

Invoice Factoring: A Better Solution
Let me offer you a better solution. It’s called invoice factoring and it is tailor made for businesses, such as freight forwarders. Here’s how it helps you speed up your cash flow and solve your cash flow problem. It starts with your accounts receivable invoices. The factoring company reviews your invoices and the credit worthiness of your customers. They consider your credit history secondarily, if at all. Then, based on your invoices, they make a decision to fund your need. Most factors give you 70% to 80% of the face value of your invoices upfront within 24 to 48 hours. Then they take on the responsibility of collecting on your invoices. You don’t have to lift a finger, you just keep focusing on what you do best, managing the supply chain.  After the factor receives full payment on the invoices, you get the remaining value of the invoices, less the factoring fee. Normally, this fee runs about 1% to 3%, and depends on the quality and value of your invoices.

A Summary of the Benefits
Now you’ve probably already realized the benefits in this arrangement, but here’s a quick summary:

  • You get the cash flow you need to pay your suppliers and vendors within 24 to 48 hours of getting set up with the factor.
  • Even if you’re a startup or have a compromised credit history you can still get funded based on your customers creditworthiness or time in business.
  • This is not a loan, and it does not go on your books as outstanding debt. In addition, you do not have to present the intrusive financial and personal disclosures required for bank loans.
  • You can reassign or eliminate your accounts receivable personnel, and save money on your operating costs because the factor collects invoice payments.
  • The value of your invoices determines your funding capacity, not the bank.

I hope you see how invoice factoring is a great fit for freight forwarders. Keep in mind, you do not have to factor all your invoices, but I recommend you at least try it with a portion of your invoices and discover the benefits. If you have any questions, need more details, or exact terms get in touch with us 800-544-3050 or complete the contact form.

How Trucking Companies Can Benefit from Factoring Invoices

truck factoringTrucking companies keep our economy moving by transporting goods all over the country. Today, I want to show you how transportation companies can use factoring to solidify and build their businesses. So whether you are a brand new trucking company with one or two trucks or a company that has been around forever with a huge fleet, let me show you how factoring can benefit you.

What is factoring?
No matter if you call it freight bill factoringfreight factoringtruck factoring or transportation factoring, factoring basically works the same way. Simply put, accounts receivable or invoice factoring is the sale of your uncollected invoices for a discounted rate. It is not a loan. The factor buys your invoices at a discount and pays you a percentage of the face value upfront. The factoring company then takes on the burden of collecting the unpaid invoices. Once the invoices are fully collected, the factoring company pays you the rest of the contracted amount.

How Does This Benefit A Trucking Company?
Let me explain how this works with a little story. “Big Load” Trucking Company transports many loads across the country. They drop off the goods and wait 30 to 90 days to collect payment on the invoices. In the meantime, they run many more loads and have to put gas in their trucks, keep them serviced and pay their employees. As they are waiting to get paid, they are laying out a lot of money for operating costs. In simple terms, factoring gives you cash flow immediately to operate your business. It eliminates the 30 to 90 day waiting period. Many times you can get your payments within 24 to 48 hours of contacting the factoring company.

How Much Does Factoring Cost?
Now I can’t speak for every factoring company, but I can tell you what Meritus charges. Normally we pay you 97% to 99% of the face value of your invoices. We give you 70% to 80% upfront and the remainder when the invoices are collected. Plus, you don’t have to collect the invoices yourself. We do all that for you. All you have to do is keep moving loads and getting paid.

This cash flow enables you to expand your fleet, hire more drivers, eliminate unnecessary accounts receivable positions, maintain your rigs, etc.

Is It Worth It?
Our clients think so and here’s why. They find that consistent cash flow reduces stress and allows them to focus on the most profitable task of moving more goods.  As you know, transporting more loads means generating more revenue for your trucking company.

How Can I Get Started?
Give us a call at 800-544-3050 or fill out this easy contact form. Once we talk and get the details of your situation, we can give you exact costs and time frames specific to your company. I look forward to hearing from you.

Factor Truck Expenses To Stay In The Black

Hello. I’m Paul DeLuca, founder of Meritus Capital. Today we’re talking about factoring your truck.

You’re a trucker and you’ve been able to buy your truck and now you’re creating loads and invoices every single day. But here’s the key, how are you going to pay for your fuel bill? You’ve made your invoice, today and you’re not going to get paid for another 30 or 60, sometimes even 90 days. That’s where factoring your truck comes in handy.

An accounts receivable factoring company, will take your invoice, convert it to cash, and will do it every single day, you finish a load. Sometimes, as much as 95 or even 97% of your invoice can be paid to you today. So, this is exactly what factoring your truck is all about.

If you have any questions, please let us know. We love questions and we’ll answer them in a video series. Until then be safe, and make it a great successful day.

What Is Freight Capital?

Hello, I’m Paul DeLuca. I’m founder of Meritus Capital. Today, we’re talking about freight capital. What exactly is freight capital?

Those of you in the freight business, you know that one of the most important things for you is making sure you get paid and you get paid quickly. But, what if you’re just growing so fast that you really need to get paid immediately? That’s where freight capital comes in line. See, we as accounts receivable factoring companies can take your invoice, every single day, and turn it into cash. As much as 95, even 97%, of your invoice can be converted to cash today, and a factoring company will wait to get paid 30, 60, even 90 days later. So, that’s what freight capital is.

We hope that this has been informational for you. We’d be happy to answer any of your further questions. Please email us. We’d love to make another video out of it and answer those questions.

Until then, be safe and make it a successful day.

What Is A Truck Factoring Company

Hello, I’m Paul DeLuca. I’m founder of Meritus Capital. Today, we’re talking about truck factoring companies. What exactly is a truck factoring company?

A factoring company for truckers takes their invoices, and every single day, generates cash for them. Think about it, if you’re a trucker and you’ve just completed a load to the other side of the country, you want to get paid. You can’t wait for 30 or 60 days. By the way, you got to get back and you have to have enough gas to get all the way back, right? You need that fuel. So, what you can do is take that invoice, sell it to an accounts receivable factoring company, and generate cash immediately. Sometimes, you can generate as much as 95% or even 97% of the invoice amount.

We hope that this has been informational for you. Please make sure to email us any of your questions, we’ll make it a future video. Until then, make it a great successful day.

What Is Truck Invoice Factoring?

Hello, I’m Paul DeLuca. I’m founder of Meritus Capital. Today, we’re talking about truck invoice factoring. What exactly is it?

If you’re a trucker and you’ve already hauled your load to the other side of the country or even just around town, you’ve created your invoice and now you need to get some cash. You’ve got to pay your fuel bill and other expenses, but your customer is not gonna pay you for probably 30 to 60 days. So, what are you going to do?

Well, that’s where truck invoice factoring comes into play. An accounts receivable factoring company will take your invoice and pay you 95%, even 97%, of the invoice today instead of waiting for 30 to 60 days. So, that’s what truck invoice factoring is.

I hope that this has proved informational for you and if you ever have any questions or want us to create another video and answer some of those, please email us. We’d be happy to take your suggestions. We appreciate it. Until then, be very successful, be safe, and we’ll talk to you again.