What Is Freight Factoring?

What Is Freight Factoring?

what is freight factoring PCG

Phoenix Capital Group’s transportation services keeps trucking companies of all sizes on the road. PCG’s freight factoring services allows truck drivers maintain steady cash flow and respond to business expenses by providing owner operators an advance on accounts receivable.

The cartoon below is the perfect representation of a truck driver’s slow paying client, and why Phoenix Capital Group’s freight factoring services are so important in the transportation industry:

Freight factoring is also referred to as accounts receivable financing or freight bill factoring. This is when a factoring company (Phoenix Capital Group) purchases a freight invoice from a truck driver or trucking company.  The freight factoring company (PCG) then sends the funds that the truck driver has earned directly to the trucking company or driver. Most truckers and transportation companies are forced to wait 30, 60 or 90 days for a customer to pay them. By factoring with PCG; truck drivers don’t have to wait for payments, they receive their money the same day they submit their invoices.

Phoenix Capital Group’s freight factoring process is simple:

  1. Apply online for freight factoring. PCG does not charge an application fee, or require long-term contracts. Regardless of the fleet size or volume of a trucking company, we can help cash flow by purchasing the freight  invoices.
  2. Receive your cash same-day. Once PCG purchases an invoice, the cash is funded that same business day. PCG advances up to 100% of the invoice amount and sometimes offers rates as low as 1%.
  3. Let PCG collect. PCG eliminates the hassle of collections. Truck drivers and trucking companies can focus on generating more revenue while PCG works with the truck driver’s customer.

What are the advantages of freight factoring?

The main advantage of freight factoring is that truck drivers and fleets now have an opportunity to increase cash flow at a faster pace. Freight factoring is highly beneficial to transportation companies because the service solves short-term cash flow issues and helps fuel the growth of the business.

  • Freight factoring is easier than other forms of financing: Just apply online, free of charge and be approved within 24 hours. PCG is hassle free, unlike bank loans and long credit checks.
  • Fast, flexible, and convenient: Trucking companies and truck drivers have time constraints; this is why PCG lets you apply online via desktop or mobile phone and provides quick, same-day funding.
  • Take on more loads: Factoring improves your cash flow and allows you to take on more loads sooner.
  • Reduces credit risk: Freight factoring is the solution to avoid bad credit. It is not a bank loan and does not require a credit check or bankruptcy check.
  • Accessibility to more offers: Whether you are an independent truck driver or manage a large fleet, factoring with PCG allows clients to apply for PCG’s fuel card program, equipment financing, and allows access to PCG’s free load board.

Will freight factoring affect a driver’s credit?

Freight factoring is highly encouraged within the transportation industry because it is not a loan and does not affect credit scores. Freight bill factoring gives owners the opportunity to avoid the normal loan process from the bank and does not require a credit check or bankruptcy check.

When is a good time to start freight factoring?

  • A good indicator is when a trucking company is picking up, but there is still a gap in cash flow. Freight factoring quickly builds cash flow so there is room to hire employees, buy equipment and cover other expenses that help drivers meet company demands.
  • When the payment process is too slow. It is common for truck drivers to be forced to wait 30, 60 or 90 days for a customer’s payment. PCG provides same-day funding, This way, PCG waits for payment while collections slowly process, and drivers can stay on the road.
  • Start-up trucking companies need to grow their working capital. Freight factoring gives company owners the flexibility to grow as a small business. Instead of shopping for a traditional bank loan, companies can begin factoring immediately. This gives owners and drivers more time to focus on more important aspects of growing a business. 
Regardless of fleet size, freight factoring has many advantages. It is cost effective, keeps owner-operators debt-free and is hassle-free. Request more information below, or click here to submit a no-commitment freight factoring application today.
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