What is non-recourse freight factoring?
Non-recourse freight factoring is when a factoring company, Phoenix Capital Group, gives clients the ability to sell their invoices without recourse. The typical invoice factoring period usually takes 30, 60 or 90 days for the customer to pay the invoice back. Waiting that long for an invoice to be processed can lead to financial stress, that’s why many truckers come to Phoenix Capital Group for factoring help. Non-recourse factoring with Phoenix Capital Group means that if an account debtor does not pay a trucker’s invoice the factoring company will take the loss on that invoice, not the factoring client.
How trucking companies benefit from non-recourse freight factoring:
Non-recourse freight factoring gives truckers and trucking companies the ability to haul their loads with confidence! Factoring gives companies the ability to respond to all business expenses without having to wait for their invoices to process. The factoring company, Phoenix Capital Group, is essentially ensuring the receivables for the factoring client. If a customer does not pay, or pays invoices slowly, then Phoenix Capital Group assumes the risk of nonpayment so you can keep your working capital.
When is non-recourse freight factoring a good option?
A non-recourse factoring plan is useful for truckers and trucking companies because it helps limit company’s bad debt. With non-recourse freight factoring, truckers are not liable for the advance if a factored invoice defaults. Or if a trucker’s customer does not have good credit, the invoice can be paid in advance or through a secure method.
Non-recourse freight factoring for small trucking companies:
The non-recourse factoring option has become very popular for independent truckers and small trucking companies. Non-recourse factoring is especially best for small trucking companies that haul for a variety of shippers, companies that would be harshly impacted by non-payment.
The typical non-recourse freight factoring contract does not cover:
PCG is candid about the pros and cons of our services, non-recourse has a few we would like to make you aware of; non-recourse freight factoring offers some defense against credit risk but it does not offer protections against disputes and overall performance problems. It usually covers truckers if a client goes bankrupt during the factoring period. It might be an important protection but it’s not all inclusive.
- Invoices disputed.
- Invoices where the client has breached its agreement with Phoenix Capital Group.
- Invoices when the factoring client has made the “credit problem” worse.
- Invoices that are offset by other amounts due to the account debtor.
- Invoices where the client has sent the invoice to the customer instead the factoring company sending the invoice.
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*Disclaimer: This website is for information purposes only and is not intended as financial or legal advice, and does not guarantee any factoring rates or funding timing. The accuracy of any calculations or rates are not guaranteed, for accurate calculations, rates and advice please call Phoenix Capital Group, 623-298-3450.