The 4 Best Factoring Companies For Fleets, Owner Operators, & Other Trucking Companies
As the owner of a trucking company, you’ve probably encountered your share of challenges. From driver shortages to variable costs like fuel and tolls, the industry can sometimes be a bit unpredictable. One of the biggest challenges faced by trucking companies, though, is waiting to get paid. You could potentially wait for weeks (or even months!) to receive payments from your customers. This can cause cash flow issues that prevent you from growing your business or even covering operating expenses.
Fortunately, there’s a way to get paid quickly to keep cash flowing into your business. If you have unpaid invoices, give invoice factoring a try. You can have access to instant (or near-instant) cash instead of waiting 30, 60, or 90 days for your customers to pay. But what’s the catch? In this post, we’ll take a look at invoice factoring for trucking companies. We’ll discuss how it works, who qualifies, and the top lenders in this space. Whether you operate a fleet, are an owner-operator, or are involved in the trucking industry in another way, invoice factoring could give you the capital your business needs. Read on to learn more about invoice factoring and how to put it to work for you.
||Best for non-recourse invoice factoring|
||Best for high credit facilities|
||Best for businesses that prefer a flexible line of credit|
||Best for businesses that want to compare their options|
Read more below to learn why we chose these options.
What Is A Factoring Company For Trucking?
In the trucking industry, it’s common to invoice customers. Even after the freight is loaded and delivered, your company must still invoice the customer. Depending on your payment terms, it can be days (or even weeks) until you receive payment.
Unfortunately, there are times when outstanding invoices cause problems for your business. If you have multiple invoices that haven’t been paid, your business isn’t bringing in revenue. A lack of cash flow can spell trouble for trucking companies — after all, you still have bills to pay. Luckily, there is a solution that gives you instant (or near-instant) access to outstanding funds from your unpaid invoices. That solution? Invoice factoring for trucking companies.
A factoring company for trucking pays you for your unpaid invoices in exchange for a small fee. Here’s how it works.
You sell your unpaid invoices to a factoring company. The factoring company pays a percentage of the value of the invoices to you immediately (typically within a few business days). The percentage you receive upfront varies but typically hovers around 85%. Next, the factoring company takes over in collecting payments on the purchased invoices. Once payments are collected, the remaining funds — minus a small fee, known as a discount rate — will be released to you.
The benefits of invoice factoring are that you no longer have to wait 30 days, 60 days, or even longer to receive payments from your customers. You also (in most cases) won’t have to worry about your personal or business credit score, putting up collateral, or meeting qualifying factors that play into other types of small business funding. Most factors consider the quantity and quality of your invoices when determining approval.
However, there are also a few drawbacks to note. Most companies charge a discount rate between 1% and 6% of the total value of your invoices per month. The longer your customers take to pay, the more this type of funding will ultimately cost your business. Like other forms of funding, it’s important to weigh out the pros and cons. While invoice factoring for trucking companies can get expensive, the cost may be worth it if your business is facing cash flow challenges.
Unsure if invoice factoring is right for you? Check out our post A Basic Introduction To Invoice Factoring For Businesses to help you make up your mind.
The Best Trucking Factoring Companies
We’ve found the best factoring companies for trucking that can help you get the funds you need for your business. Fleets, owner operators, and other trucking companies can resolve cash flow issues by selling their unpaid invoices to one of these recommended factoring companies.
1. Riviera Finance
Best for non-recourse invoice factoring
Since 1969, Riviera Finance has provided factoring services to small businesses across America, including trucking companies. Riviera Finance will pay as much as 95% of your freight bills — up to $2 million — with payments issued within 24 hours. The entire process is quite fast, only taking an average of 4 to 7 business days from the application process to funding. You can apply at one of over 30 local offices across the United States and Canada, or you can submit your application online. If you aren’t ready to apply just yet, you can schedule a free consultation to learn more about Riviera Finance’s factoring services.
There are no time in business, credit score, or revenue requirements to qualify. All you need are verifiable invoices or freight bills. There are no monthly minimums in terms of how many invoices or bills you submit, but you can be required to sign a contract. Most businesses have 6-month contracts with Riviera Finance, although the company will work with you to find a solution that’s best for your business. Discount rates start at 2%, but lower rates may be available for your business.
Riviera Finance offers non-recourse factoring, so you won’t be on the hook if your customers file for bankruptcy. You may still have to buy back your invoices in certain situations, such as if there was an error on the invoice. One thing to keep in mind is that Rivera Finance uses notification factoring, so your customers will be aware that you are using an invoice factor. If this is a problem for you, look for factors that offer non-notification services.
- Non-recourse invoice factoring
- Fast application & funding processes
- Receive up to 95% of your unpaid invoices/freight bills
- No credit score, time in business, or revenue requirements
- Only offers notification services
- Possible high discount rates
- Contract required
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Best for high credit facilities
If your business has multiple outstanding invoices and many high-dollar freight bills, BlueVine offers up to $5 million through its invoice factoring service. The amount that your business will be eligible to receive is based on a number of factors, including but not limited to your credit profile, transaction volume, and the creditworthiness of your customers. To qualify for BlueVine’s invoice factoring, you must meet the company’s minimum requirements: a minimum credit score of 530, monthly revenues of at least $10,000, and a time in business of at least three months.
Through BlueVine, you can receive up to 90% of your unpaid invoices upfront. Discount rates start at 0.25% per week but can go as high as 1.7% per week. These fees can add up, but if your customers typically pay pretty quickly, the benefits of BlueVine’s invoice factoring may outweigh the costs. This is especially true if you need more funding than other factors provide.
BlueVine offers recourse factoring and both notification and non-notification services. Agreeing to notification services may net you additional funds. There are also no contracts required.
BlueVine works quickly to give you access to funds. Initial approval takes about 24 hours, while the process of submitting invoices, getting them approved, and receiving money in your account may take around three business days. In addition to invoice factoring, BlueVine also offers business loans and lines of credit to qualified borrowers, which may open up more potential funding opportunities for your trucking business.
- High credit facilities
- Fast & easy funding
- No contracts required
- Can be expensive
- Must meet several requirements to qualify
- May have to agree to notification services to qualify for more funding
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Best for businesses that prefer a flexible line of credit
Fundbox offers a unique financial product called Net Terms. While it is slightly different from the invoice factoring provided by the other companies on this list, it’s another way that trucking companies and other businesses can receive cash for unpaid invoices. Net Terms is noticeably different in a few ways, and it is very similar to invoice financing. The first major difference is that Net Terms provides you with a flexible line of credit up to $100,000. Instead of a single loan, you can draw up to and including your set credit limit as you need funds.
Another difference with Net Terms is that you aren’t selling your invoices. Instead, your unpaid bills and invoices work more like collateral to back your line of credit. This also means that funds aren’t repaid a soon as your customers pay their invoices. Instead, you’ll make weekly payments on the used portion of funds for a period of 12 or 24 weeks. Paying your balance off early will help you save money on fees. Fees for using Net Terms start at 4.66%. Net Terms is a non-notification service, so your customers won’t know that you’re using it.
The application process is fast, and many borrowers receive a funding decision in minutes. Once approved, you can request funds and receive them as quickly as the next business day. The application process is also extremely easy and allows you to simply connect your invoicing software to determine if you qualify for funding. To qualify for Net Terms, you must have a bank account that has been open for a minimum of three months. Fundbox also requires its borrowers to have a personal credit score of at least 500.
- Easy application process
- Fast funding
- Few borrowing requirements
- Low credit facilities
- Can be expensive
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Best for businesses that want to compare their options.
It’s always important to shop around before acquiring small business funding. Fortunately, you don’t have to spend hours behind your computer screen comparing lenders when you use Lendio. Lendio is different because it isn’t a direct lender. When you submit your application, you’ll be connected to one or more factoring companies so you can weigh out your options. One of the financial products you can apply to receive is accounts receivable financing.
Through Lendio, you can receive up to 80% of your unpaid invoices upfront in as little as 72 hours. Loan terms are available for up to 1 year and factor rates start at 5%. The specifics of your financing will vary based on the lenders you match with. Lendio is partnered with many top lenders, including BlueVine and Fundbox.
Borrowing requirements vary by lender, but one thing remains consistent: collateral is not required and personal credit history doesn’t play a large role in whether or not you’re approved. If you want to compare options, Lendio can connect you with over 75 lenders in just minutes through its easy application process. And if you want other types of small business funding, Lendio has you covered, allowing you to seek out other options including equipment financing, short-term loans, and more.
- Competitive rates & terms
- Easily compare loan options
- Fast & easy application process
- Not a direct lender
- Only receive up to 80% of receivables upfront
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Invoice Factoring For Trucking FAQs
Do I need a factoring company for trucking?
If outstanding invoices and freight bills are causing cash flow issues in your trucking business, using a factoring company may be a solution that works for you. Although you will have to pay a fee (or discount rate) for selling your invoices to a factor, you won’t be indebted to a lender like you would with other types of financing. That means no long-term payments, additional fees, and difficult borrowing requirements.
Like other types of small business funding, it’s important to carefully evaluate your options and determine if the cost of invoice factoring is worth it for your business. If you can afford to wait to get paid for your freight bills and invoices, then do so. However, if these delays in payments put your operations at risk or you need immediate funding for an emergency or business expense, a factoring company for trucking can help your business.
What are the advantages of working with a freight factor?
There are several advantages of working with a freight factor. With factoring, you don’t have to worry about meeting stiff requirements for approval. While most small business lenders take things like personal credit score and business credit history into account, the most common thing factors look for is the quantity and quality of your invoices. In other words, how much are your invoices and freight bills worth, and are your customers likely to pay?
For new businesses, businesses with lower revenues, and owners with credit challenges, factoring may be an option when other funding options aren’t available. One thing to note is that requirements vary by lender, so make sure you’re aware of the requirements before submitting your application.
Another advantage of factoring is that you can receive money quickly. Unlike loans and other financial products, there are no long waiting periods. In many cases, you can have your application and invoices approved and funded in a week or less.
Since invoice factoring isn’t a loan, you won’t have to worry about repaying a lender over a longer period of time. Instead, your invoices are being purchased and the factor takes its fee once your customers have paid. This means that your business won’t be in debt or have to make regular payments.
What are the disadvantages of working with a freight factor?
There are some disadvantages of working with a freight factor. The biggest is the cost. Discount rates can get quite high, and the longer your customers take to pay, the higher your fees will be.
Depending on the factor you select, you may have to sign a contract. Breaking that contract could result in additional fees. There may also be a set minimum for the number and/or amount of invoices you submit, so make sure you fully understand all conditions before choosing your factor.
Another drawback to note is that you may be liable for unpaid invoices. While non-recourse factoring protects you from liability when customers file for bankruptcy, there may be other instances where you’re held liable.
Finally, many factors use notification services, which means they interact with your customers. This could pose a problem if you don’t want your customers to know you’re using an invoice factor.
How much does trucking factoring cost?
The cost of trucking factoring varies based on the company you choose. Typically, expect to pay fees of about 1% to 5% of the invoice amount. A variety of factors may influence your rate, including the creditworthiness of your customers, the credit history of your business, and the volume of invoices you’ll submit. In addition to your discount rate, there may be additional fees, including early termination fees for contracts.
How long does it take to set up with a factoring company?
Getting set up with a factoring company doesn’t take long at all. Most applications are short and easy to complete, and many factors offer same-day or next-day approvals. Once your business is approved for factoring and your invoices are uploaded, the factor will typically verify your invoices before issuing payment. This could take anywhere from one day to several days. In most cases, though, the entire process takes anywhere from 3 days to 5 days. Again, this does vary by factor, so make sure you check turnaround times before applying.
What should I look for when choosing a factor?
When choosing a factor, it’s important to work with a reputable company that has an overall positive reputation with its customers. Look for factors that offer great customer service and support. Make sure that the factor you select offers credit facilities large enough to meet the needs of your business. If you don’t want your customers to know that you’re working with a factor, look for companies that offer non-notification services. Finally, if you don’t plan on using invoice factoring over the long term, make sure that the factor you select doesn’t have minimums or require you to sign a contract.
If you’re not sure where to start, check out our invoice factoring and financing reviews to find the factor that’s the best fit for you.
Final Thoughts On Factoring Companies For Trucking
Unpaid invoices and outstanding freight bills don’t have to be a burden on your trucking business. With invoice factoring, you’ll be able to easily resolve cash flow issues, even if you don’t have perfect credit or are a newer business. One thing to keep in mind is that invoice factoring can get a little expensive, so make sure to fully explore your lender options and weigh out the pros and cons of this type of funding before submitting your invoices.
If your trucking company needs extra cash, invoice factoring is just one option available to you. If you need additional funds to operate or grow your business, consider getting a business loan for trucking companies. For fuel purchases, you can also apply for a fuel credit card, which allows you to pay later, and some cards even let you build up rewards. No matter which financial route you choose, make sure to check out our reviews, comparisons, and other financial resources to help you make the best decision for your trucking business. Good luck!
In Summary: The Best Trucking Factoring Companies
- Riviera Finance: Best for non-recourse invoice factoring
- BlueVine: Best for high credit facilities
- Fundbox: Best for businesses that prefer a flexible line of credit
- Lendio: Best for businesses that want to compare their options