Non-Recourse Factoring Companies for Trucking
Non-recourse freight factoring is an ideal, risk-free funding solution to make sure you get paid for the loads you haul in case your customer fails to pay. If you lack the cash flow necessary to run loads and keep your trucks in prime shape, Freight bill factoring can help.
What is Non-Recourse Factoring?
Like recourse factoring, non-recourse freight factoring allows you to carry your hauls without worrying about whether you will receive the payment you’ve earned. A factoring company will purchase your freight bills and advance you immediate cash that you can use to cover your expenses.
Unlike other factoring relationships, in which you are responsible when your customers don’t pay, a non-recourse factoring company will assume the risk of your invoices so you get to keep the cash you are advanced
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How Does Non-Recourse Factoring Work?
When you begin a non-recourse factoring relationship, the factor will agree to purchase your loads for a flat fee. The factor advances you the value of the freight bill minus that fee and then waits to be paid by your customer.
For example: You have a freight bill for $1,000.00. Let’s say the non-recourse truck factoring rate is 95/5 (factoring rates will vary by volume). The factoring company verifies the invoice and agrees to fund the load at a fee of 5%. The factor advances the remaining balance of $950.00 to you. The money is yours, free and clear. The factoring company will wait for your customers to pay the $1,000.
While a recourse factoring program would require you to repurchase unpaid invoices if your client doesn’t pay, the non-recourse program protects you from incurring any additional charges on the freight bills you have factored.
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Recourse Factoring vs a Non-Recourse Freight Factoring Company
Unlike recourse factoring, non-recourse freight factoring for truckers features a single flat fee per factored load. Freight factoring with no recourse has particular advantages:
- No risk! The non-recourse freight factoring company assumes the risk of non-payment by your customers.
- No worry! Your trucking company gets paid up-front, even if the invoice is never paid.
- No surprises! With a flat fee, you will always know the factoring fee before you ever sell an invoice.
Non-recourse truck factoring is a great way to build your credit in order to finance new equipment. It does not add debt to your balance sheet, and you can use the immediate cash you receive to pay your bills and qualify for quick-pay discounts. There is also no credit check for your business, so even if you have no credit or poor credit you may still qualify.
Factor Finders has relationships with both recourse and non-recourse freight factoring companies nationwide that are ready to factor your trucking invoices today. All you need to get started is an active MC or DOT number and copies of your current freight bills. Learn more about what to look for when reviewing factoring companies.
What are you waiting for? If you have loads to haul and bills to pay, contact us to get started with our non-recourse freight factoring program right away!
Additional benefits of factoring freight include: