Best Factoring Company: How to Choose for Your Trucking Business

Best Factoring Company – If you are a trucking business owner or an owner-operator, you may have faced the challenge of waiting for your invoices to be paid by your customers. This can affect your cash flow and limit your ability to take on new loads and pay for fuel, maintenance, and other expenses. One way to solve this problem is to use a factoring company for trucking.

A factoring company for trucking, also known as a freight factoring company, is a service that buys your unpaid invoices and pays you a percentage of their value upfront. This way, you can get immediate cash for your work and avoid the hassle of collecting payments from your customers. The factoring company then takes over the responsibility of collecting the payments from your customers and pays you the remaining balance, minus a fee, once they receive the payment.

But how do you choose the best factoring company for your trucking business? There are many factors to consider, such as the fees, the advance rate, the contract terms, the customer service, the funding speed, and the additional benefits. To help you make an informed decision, we have compiled a list of the seven best factoring companies for trucking based on feedback from carriers and owner-operators.

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Best Factoring Company

Best for Trucking Specialists: TAFS

TAFS is a factoring company that specializes in trucking and transportation. They have been in business since 2008 and have served over 10,000 clients. TAFS offers competitive rates, high advance rates, same-day funding, fuel discounts, tire discounts, equipment financing, and more. They also have a dedicated team of account managers who provide personalized service and support to their clients. TAFS has a simple online application process and does not require any long-term contracts or minimum volume requirements.

Best for Owner-Operators: eCapital

eCapital is a factoring company that caters to owner-operators and small fleets. They have been in business since 1998 and have funded over $3 billion in invoices. eCapital offers flexible rates, high advance rates, same-day funding, fuel cards, insurance services, compliance services, and more. They also have a mobile app that allows you to submit invoices, check your account status, and access your funds anytime, anywhere. eCapital has a fast and easy approval process and does not require any long-term contracts or minimum volume requirements.

Best for OTR Trucking: TAB

TAB is a factoring company that focuses on over-the-road (OTR) trucking. They have been in business since 1998 and have funded over $1 billion in invoices. TAB offers low rates, high advance rates, same-day funding, fuel advances, fuel cards, equipment financing, load-board access, and more. They also have a friendly and knowledgeable staff who provide excellent customer service and support to their clients. TAB has a simple online application process and does not require any long-term contracts or minimum volume requirements.

Best for Instant Payments: TruckSmarter

TruckSmarter is a factoring company that offers instant payments for your invoices. They have been in business since 2017 and have served over 1,000 clients. TruckSmarter offers flat rates, high advance rates, same-day funding, fuel discounts up to $1.50 per gallon with no transaction fees, cash back rewards on their Visa card, and more. They also have a mobile app that allows you to submit invoices, check your account status, and access your funds anytime, anywhere. TruckSmarter has a transparent pricing policy and does not require any long-term contracts or minimum volume requirements. You can factor in with TruckSmarter without any hidden fees or charges.

Best for Flexibility: Porter Freight Funding

Porter Freight Funding is a factoring company that offers flexibility and customization to its clients. They have been in business since 2011 and have funded over $500 million in invoices. Porter Freight Funding offers competitive rates, high advance rates, same-day funding, fuel cards, equipment financing, dispatching networks, and more. They also have a responsive and professional staff who provide personalized service and support to their clients. Porter Freight Funding has a hassle-free online application process and does not require any long-term contracts or minimum volume requirements. You can factor with Porter Freight Funding according to your specific needs and preferences.

Best for Fast Turnaround Time: RTS Financial

RTS Financial is a factoring company that offers fast turnaround time for your invoices. They have been in business since 1995 and have funded over $20 billion in invoices. RTS Financial offers competitive rates, high advance rates, same-day funding, fuel cards, equipment financing, load-board access, and more. They also have a multilingual and experienced staff who provide exceptional customer service and support to their clients. RTS Financial has a quick and easy online application process and does not require any long-term contracts or minimum volume requirements. You can factor with RTS Financial within 24 hours of applying.

Best for Small to Midsize Carriers: OTR Capital

OTR Capital is a factoring company that serves small to midsize carriers. They have been in business since 2011 and have funded over $2 billion in invoices. OTR Capital offers competitive rates, high advance rates, same-day funding, fuel cards, equipment financing, load-board access, and more. They also have a dedicated and friendly staff who provide outstanding customer service and support to their clients. OTR Capital has a streamlined online application process and does not require any long-term contracts or minimum volume requirements. You can factor with OTR Capital with no setup fees or hidden costs.

Reviews The Best Factoring Company for Trucking

The best-factoring company for trucking in 2023 is TAFS. They scored 4.9 out of 5 stars based on 237 reviews from carriers and owner-operators. Some of the reasons why they are rated highly are their competitive rates, high advance rates, same-day funding, fuel discounts, tire discounts, equipment financing, and dedicated account managers.

In conclusion, Choosing the best factoring company for your trucking business can be a daunting task, but it doesn’t have to be. By comparing the features, benefits, and reviews of different factoring companies, you can find the one that suits your needs and goals. Whether you are looking for a trucking specialist, an owner-operator friendly, OTR-focused, instant payment, a flexible, fast turnaround, or a small to midsize carrier-oriented factoring company, there is a factoring company for you.

The seven factoring companies we have listed above are some of the best in the industry, but they are not the only ones. You can also use our web search tool to find more factoring companies for trucking and compare them yourself. We hope this article has helped you make an informed decision and wish you all the best in your trucking business.

Best Factoring Company: Frequently Asked Questions (F&Qs)

Who is the best factoring company?

There are several factoring companies that are highly rated. Here are some of them:

1. altLINE
2. Triumph Business Capital
3. RTS Financial
4. eCapital
5. TCI Business Capital

What is a good factoring rate in trucking?

Truck factoring rates can vary depending on the freight factoring company you use and any additional services they may charge for. Typically, charges can range from 1% to 4% per invoice¹. Some companies might charge 2% for the first month an invoice is unpaid and then add a 0.5% fee for every 10 days the invoice goes unpaid.

However, it’s important to note that these rates can also vary depending on several additional factors, including:

• The number of invoices you factor
• Invoice amounts
• Whether you choose recourse or non-recourse factoring
• Customer credit history

Some freight factoring companies also charge for faster payments, money transfers, collection costs, or administrative overhead¹. Therefore, it’s crucial to understand the contract fully before signing any factoring agreement for your trucking company.

As for what constitutes a good factoring rate, it can be hard to determine as one factoring company may offer you a 1.5% rate, which might sound like a very good deal, but there could be a number of other fees associated with the 1.5% rate. Those fees can add up quickly, ultimately bringing the total dollar amount far above the 1.5% you initially agreed to. So, it’s always best to read the fine print when comparing trucking factoring rates.

Is factoring worth it for trucking?

Factoring can be beneficial for trucking companies in several ways, but it also has its drawbacks. Here are some pros and cons to consider:

Pros:

• Fast Payment: Factoring companies typically offer same-day or next-day payment options. This can help improve your business cash flow and enable you to pay for fuel, salaries, equipment, repairs, and other expenses without using a credit card or other finance options.
• Easy to Qualify: Applying for factoring usually takes only a few minutes, and approval is typically granted within a few days. This is much simpler than securing a loan from a bank¹.
• No Debt Created: Factoring isn’t a loan. You’re not borrowing any money. Instead, you’re advanced the cash for loads that you’ve already hauled and delivered.
• Credit Isn’t Much of a Factor: If you have a low credit score or even a bad credit history, you can still qualify for factoring. Approval is mostly dependent on the creditworthiness and payment history of your customers.

Cons:

• Cost: While factoring can provide immediate cash flow, it does come at a cost. The fees associated with factoring can add up quickly and eat into your profits.
• Dependence on Customers’ Creditworthiness: Since approval for factoring is largely dependent on the creditworthiness of your customers, if your customers have poor credit or payment history, it could affect your ability to factor in your invoices.

What is the average factoring rate for trucking companies?