Factoring for Owner-Operators
Trucking owner-operators can often run into cash flow issues, waiting to get paid from the broker, living from load to load (paycheck to paycheck) with financial uncertainty. More and more carriers are turning to factoring to address this problem.
Managing paperwork, invoicing, and expenses are not tasks that typical carriers sign up for when they decide to pursue trucking as a career. Balancing budgets and avoiding debt can be daunting challenges, not to mention the time and attention it takes away from the heart of your business: hauling loads and making money. Load factoring solves much of this problem by taking the time-consuming invoicing task off the shoulders of the carrier and speeding up the time it takes the carrier to get paid for work done and loads hauled.
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Factoring gets you paid faster.
A good owner operator factoring solution means you don’t get caught in a cash crunch, trying to hang on until you get paid. It means you can cover your expenses, pay your bills, and sleep at night!
But don’t settle for just any freight factoring company, as not all factoring solutions have your best interests in mind. It’s important to shop around for a flexible solution that doesn’t tie you to long contracts full of loopholes and stiff penalties for cancelling. Some factoring companies even put a time limit on non-recourse factoring. Look for a factoring solution that offers more and requires less:
- Flat-rate pricing. NO HIDDEN FEES.
- No volume requirements. No minimums, no maximums.
- Non-recourse with no time limit, so you get paid even if the broker doesn’t pay.
- Full-service billing. We invoice the broker, saving you the time and hassle.
Get paid within 24 hours.
Oftentimes it takes brokerages 30 to 45+ days to process an invoice on a load you hauled. Even the most experienced and financially savvy owner-operators can find themselves caught between payment cycles and at the mercy of a brokerage’s accounts payable process. Then, when you finally do get paid, playing catch-up can be stressful. You’ve got enough to do without worrying about getting trapped in a vicious financial cycle.
Truckstop Factoring dramatically shortens the time between hauling a load and getting paid for it. The best-case scenario goes like this:
- You haul a load.
- Submit your paperwork to Truckstop instead of your broker.
- We pay you as soon as possible. In some cases, you can get paid within 24 hours (once your invoice is verified).
- Your broker pays us.
Factoring helps carriers avoid taking on debt.
Consider factoring as an alternative to getting a bank loan, especially if you already have some debt, like a truck loan or equipment leases or other freight bills. It’s just good business sense to keep debt to a minimum. Plus, you’ll avoid high interest rates that can quickly eat into your profit margins. You can also protect your credit score and avoid late fees that can come from creditors. Instead of a high interest rate, you’re opting for a predictable low flat rate, so it’s easy to wrap into your operating budget from month to month.
Not only that, unlike other factoring agencies or companies, Truckstop Factoring doesn’t require you to factor every single load. You can pick and choose which loads to factor, depending on your history (or lack thereof) with a certain broker (broker must be factorable, as determined by our team) or during a time when cash flow isn’t a problem, and you don’t need to factor every load. This flexibility allows you the freedom to run your business your way and make adjustments that fit your unique situation.
And speaking of flexibility, a 30-day notice is all we require to opt out. Some factoring companies require you to commit to a one- or two-year contract and charge steep penalties if you change your mind for any reason.
sign me upWith owner-operator factoring, you can grow your business without the growing pains.
As an owner-operator, you’ve got fixed and unfixed expenses. Fuel, equipment payments and maintenance, out-of-pocket on-the-road costs of living, and unexpected freight bills or emergencies can come fast and furious. It can be difficult for a carrier to keep their head above water, let alone think about ways to invest in business growth and future financial security. Factoring gives you access to the funds you are owed to do with as you see fit for the good of your current business and to lay a foundation for your future growth and prosperity.
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Factor one load, factor a few, factor them all. Find a flexible factoring solution that gives you control.
Maybe you work with many brokers you know and trust. You know their days-to-pay, you know when to expect payment. Maybe you don’t need to factor these broker customers. On the other hand, if you want to give a new broker a chance but don’t want to take a chance with your cash flow, you can choose to factor those loads. Likewise, to protect yourself in lean times, you can factor all your loads and get advances until your cash flow recovers.
Whatever your reasons, you can factor on your terms and use factoring services to work for you, not against you. Not all factoring services offer this level of flexibility. Make sure you choose one that does.
Start FactoringFAQs
In the world of finance, factoring allows a business to get money immediately based on the future income due to them on an outstanding invoice or invoices. A third party—the invoice factoring company—assumes the role (and the risk) of collecting on the invoice.
In the world of freight, factoring is a financial solution that helps carriers avoid cash flow problems. Factoring allows carriers to get paid on an invoice owed to them on a completed haul—but before the invoice has been paid by the broker. The factoring company buys your unpaid invoices, pays you immediately minus a small fee for their services, and then collects the money from the broker to pay themselves and complete the circle.
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