Freight Factoring Questions

Freight Factoring Questions

Phoenix Capital Group

Q: What is freight factoring?

A: Freight factoring is an easy way to manage cash flow for your trucking or carrier company. Factoring is money that is advanced on accounts receivable. Phoenix Capital Group purchases freight bills at a discount then provides fast funding to the client for unpaid invoices. Truck drivers are able to quickly receive the money they have earned, instead of waiting 30, 60 or 90 days for payment.

Q: What are the benefits of freight factoring?

A: Freight expenses grow quickly and frequently takes months for individual truckers or trucking company to be reimbursed. Freight factoring provides truckers with immediate cash so you can focus on growing your business. So not only do you have cash in your pocket faster, it’s a less frustrating process!

Q: Is there a minimum or maximum amount that you will fund?

A: There is no minimum or maximum amount we will fund for freight bill factoring. Businesses and invoices of all sizes are accepted.

Q: I’ve heard there are two different types of factoring, can you explain this?

A: Phoenix Capital Group offers recourse freight factoring and non-recourse freight factoring. Recourse freight factoring makes up most of the accounts receivable financing industry. When you make a recourse factoring agreement, you and your factor both acknowledge that you are responsible for buying back invoices that aren’t paid by your customers after a predetermined period of time, which could be 60, 90 or even 120 days. Non-recourse freight factoring means that the factor assumes the risk of non-payment by your accounts. With non-recourse factoring, your business is safe from the cost of bad debt, but the discount rate will be higher than it is for recourse factoring since it is a higher risk for the factor. Even with higher discount rates, many truckers see non-recourse as a promising agreement because the cost of an unpaid invoice is a much greater loss.

Q: Can I get a fuel card through Phoenix Capital Group?

A: Yes, we provide our clients with as many fuel cards as they need. Our fuel card program is used across the country and also offer substantial fuel discounts.

Q: How quickly will I receive my money?

A: As long as we receive your paperwork by the submission deadline, we will process the funding that same-day. We offer immediate wire transfers and fuel card funding as well as next day ACH options.

Q: Do you accept copies for funding?

A: Yes. We will fund all invoices based on copies, typically by email or fax. Even if your customer requires original paperwork in order to pay, we will still factor those loads from the copies and work with you to submit the originals in a timely manner.

Q: What happens if my customer does not pay you back?

A: We offer two different types of factoring programs. Under the recourse program, customers are generally expected to pay us within a 60-90 day window. If the customer does not pay us back within that time period, we will work with you to reimburse us for the missing payment. However, we also offer a non-recourse program where you will not be expected to reimburse us if your customer does not pay due to bankruptcy or insolvency.

Q: Are there any hidden fees?

A: The only other fee, aside from the contracted factoring fee, is for your preferred funding method. Depending on whether you would like to be paid by wire transfer, ACH, or fuel card deposit, these fees will vary. However, there are no set up fees, no termination fees, no invoice processing fees, or any other charges.

Q: Once I start factoring, how do I get my new customers approved?

A: You will be given access to our website where you can request credit on new customers or credit limit increases on existing customers. Additionally, you will be able to run accounting reports from the website. Some examples are accounts receivable aging reports, collections reports and purchase reports.

Q: Do I have to sign a long-term contract?

A: No. Our typical factoring agreement is simply on a month-to-month basis. This allows us to earn our client’s repeat business every single day that we work together.

Q: As a freight factoring client, why do I need an account manager?

A: Having an account manager keeps your papers organized and your customers accountable.Phoenix Capital Group’s account manager’s keep an eye on your invoices, your customers and your money. If you see an issue with your account, all you have to do is notify your designated account manager and they will handle it.

Q: What other services and products can Phoenix Capital Group provide me with?

A: We are a one-stop shop for all services that have to do with the trucking industry. Our priority is freight bill factoring, but with that comes several other services we can provide. From fuel cards, truck factoring and equipment financing. We are competitively priced and provide high-quality services to all our clients.

Q: How long does it take to sign up?

A: Signing up is quick and easy. Apply online for freight factoring and receive same-day approval with no application fee. We can set up a new account within 24 hours and begin funding your trucking company.

Q: Any more questions for us?

A: Contact us for more information!