invoice factoring allows you for invoices to get money today, which are towards you and be paid in the future , It is commonly used by freight forwarders to cover flow gaps in cash while waiting to be paid by shippers and freight brokers. In this article we will discuss the best freight factoring companies for truck drivers.
We recommend BlueVine and Fundbox for trucking companies because of the way to process the payment of invoices. Your customers will still make checks to your business, so they do not know you their bills factoring.
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As a small business to obtain loans
We recommend BlueVine for larger trucking companies to borrow more than $ 25K. Fundbox is our choice for smaller operations that need less than $ 25K.
BlueVine and Fundbox for freight factoring
| BlueVine | Fundbox | |
|---|---|---|
Amount You can borrow | $ 5,000 to $ 250,000 | $ 500 [1945027[$ 25,000 |
| type funding | advance based on unpaid bills | Short-term debt is based on unpaid bills |
| invoice amount advanced upfront | 85-0% | 100% |
| redemption structure | Get advance and the rest of (minus fees) when your customer pays BlueVine | Pay back loans in 12 or less equal to weekly installments |
Qualification Requirements | At least 530 credit score, 3-6 months in business and $ 70K in annual sales invoice must other companies or government customer invoices must due in 0 days or less | at least 6 months business must use online accounting software invoice must other companies or government customer invoices must due or in 0 days less |
Cost | 2.5 % In 4% per month (equivalent to 28-60% APR) | $ 52 $ 72 in fees to $ 1,000 account (equivalent to 38-54% APR) |
invoice factoring: Cash flow solution for Haulage
How Traditional factoring Works
invoice factoring is to help small business, which is not paid immediately for the goods and services they offer. Invoice factoring has come a long way, but some factors still do things the traditional way in terms of how they process the payment and collection process on outstanding invoices.
Traditional factors that you need to "assign" your bill to them, which means your customer pays the factoring company, but directly your business. After receipt of the factoring company will deduct their fees and you pass along the scale.
Before borrowing money, call traditional factors used and to your customers sign the bill to check. If the customer pays the invoice is not time, is the factor as a collection agency, keep the customer in contact until the customer pays.
Sometimes traditional factors that do not work with a company when they signed a long term contract or a minimum amount to each monthly statement. This can increase the cost of borrowing. You have to watch for hidden costs, such as reminders and ACH fees and reserve accounts to customer specifications on the way. Many small businesses do not like to use traditional factoring these reasons.
A new type of factoring
Fundbox and BlueVine have this system changed, to give you control over your bills and customers. None of them are your customers connected. Customers are still checked to make your business' name, so they do not know you their bills factoring.
Both lenders have a quick and easy online application, you can get your money in less than 2-3 business days. Moreover, neither company minima, reserves or long-term contracts requires. You can choose as few or as many invoices to factor, as you want
How Freight Factoring your trucking company can help .:
Without enough cash flow, a trucking business not buy fuel, pay for truck insurance, or take care of necessary repairs, all of which are costs that can not be deferred. It also prevents the business from new driver recruitment, the purchase of new vehicles, and to take on larger jobs. Nearly 70% of trucking companies have less than 4 employees , so that they make particularly vulnerable to unstable cash flow.
Factoring freight (aka truck factoring and waybill factoring) to stabilize your cash flow by capital now in exchange for bills work that are due in the future ( factoring is also available for other types of businesses available, the bill business or government customer invoice).
It is easier for invoice factoring to qualify as a credit line or a credit card. New enterprises can be considered with bad credit their bills and entrepreneurs. With an annual percentage rate (APR) of about 28-60%, invoice factoring is cheaper than merchant cash advances and alternative loans are good options and truck company with river irregular cash.
BlueVine and Fundbox, two leading online accounting factors. Below we have some of the differences between these two lenders explain so you can decide which is best for your trucking company.
BlueVine for larger truck companies recommend that need more than $ 25K
How BlueVine Works
BlueVine They extended a line of credit based on your outstanding invoices. You can credit lines ranging from $ 5,000 to $ 250,000 making this condition a good choice for medium-sized trucks businesses.
Example:
When with BlueVine, the money comes to you in two parts. Suppose you are waiting for a shipper to pay $ 60,000 for a large supply of dry goods to transport. BlueVine will advance you 85% of the invoice amount ($ 51,000) in advance (0% for some borrowers). You can use the money to hire drivers, pay for fuel, or whatever you wish. If the bill is due, the customer will pay BlueVine directly. On the same day that it is paid, BlueVine will deduct its fees and pass the rest along to you.
While this may sound like classical factoring, BlueVine has a system that is much more friendly to small businesses. BlueVine assigns you a account number and local P.O. Box address, both. In the name of your company Because these "are names in your company, your customers do not know you their bills factoring. All you have to tell them that your payment data is changed.
Remember invoices to account for trusted and timely customer. if the customer does not pay BlueVine within 2 weeks after the bill is due, you will be responsible for the debt, which can be a problem if you already spent the progress !
What you need to do to qualify?
to apply to BlueVine the owner (s) should have a credit score of 530 or higher and unpaid bills that are due in 0 days or less. business that are at least 3-6 months old in annual revenue with $ 70,000 can qualify. the application process is very fast, and you can usually have access to funds within 2-3 business days.
The costs
BlueVine charge special low rates for shipping companies. The fees range from 2.5% to 4% per month for truck drivers, reserved with the best prices for larger credit lines and regular customers.
According to the company, the average annual percentage rate (APR) is approximately 40%. New enterprises and companies with lower credit scores that qualify elsewhere for a loan, do not want to have been able to look at his BlueVine before for more complex alternative loans or merchant cash advances decide .
Fundbox for smaller trucking companies recommended that use less than $ 25K
How Fundbox Works
Fundbox gives you a short-term loan based on the value of the unpaid bills. You can choose between $ 500 to $ 25,000 so that this loan is a good choice for family truck lines and other small truck operations.
Unlike BlueVine with which you are an initial advance and the rest when it is paid by the customer, Fundbox you give 100% of your outstanding invoices in advance. For example, if you have a $ 10,000 unpaid bill from a consignor, you can a $ 10,000 loan.
The point is that you have to start this loan plus interest immediately in weekly installments back pay, and it must be repaid within 12 weeks in full. Some companies such as this structure, preferring to receive 100% of their bill forward and then pay it back at a time, a little. Others prefer BlueVine model where they have a good deal of money (85-0%) in advance and have to worry about getting through installments. It is a matter of personal preference, but if you use Fundbox, you have enough money to afford your weekly payments.
What you need to get?
to apply to Fundbox , your trucking company must be at least 6 months old. There is no minimum credit score. The application process for Fundbox fast. There is no paperwork, and you can have the money in your account within 2-3 business days.
However Fundbox is only an option for the truck drivers, the online accounting software such as QuickBooks or use Wave. The company checked invoices to your accounting software networking. While this is convenient and fast, it can be a barrier to entry that are still using pen and paper ledgers to track their finances for smaller forwarders. If it contains, you should try BlueVine that does not require specific accounting software.
The costs
The average effective interest rate on a loan Fundbox is approximately 46%. These conditions in terms of easier to delete Fundbox cost between $ 52 and $ 72 $ 1000 Invoice. As with BlueVine repeat Fundbox customers enjoy lower prices generally.
startups and entrepreneurs with lower credit scores find Fundbox cheaper than an alternative lender or a merchant cash advance. You can appreciate Fundbox of payment calculator your fees and weekly payments.
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How to get a Small Business Loan
Bottom Line
To compete to be. in the trucking industry, you need to have a steady supply of cash. Freight Factoring is one of the main ways to achieve this. Small operations can opt for Fundbox. If you are a medium-sized truck business, you may find that your needs are better served by BlueVine.
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