Best Factoring Company for Trucking – Trucking is a vital industry that keeps the economy moving, but it also comes with many challenges, such as cash flow, fuel costs, maintenance, and invoicing. That’s why many trucking companies and owner-operators use factoring to get paid faster and improve their cash flow. Factoring is a process where a trucker sells their unpaid invoices to a factoring company, which pays them a percentage of the invoice value upfront and collects the full payment from the customer later. This way, the trucker can get immediate cash for their loads without waiting for 30, 60, or 90 days to get paid by the customer.
But not all factoring companies are the same. Some offer better rates, faster funding, more flexibility, and more benefits than others. To help you find the best factoring company for your trucking business, we have compiled a list of the top 10 factoring companies for trucking based on customer reviews, industry expertise, pricing, and features. We also provide some tips on how to choose the right factoring company for your needs and avoid some common pitfalls.
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What to Look for in a Factoring Company for Trucking
Before we dive into the list of the best factoring companies for trucking, let’s review some of the key factors that you should consider when comparing different factoring options. Here are some of the most important things to look for in a factoring company for trucking:
- Factoring rate: This is the percentage of the invoice value that the factoring company deducts as its fee. The lower the rate, the more money you get to keep from your invoices. Factoring rates vary depending on the invoice amount, customer creditworthiness, industry risk, and contract terms. Typically, factoring rates range from 1% to 5% per month.
- Advance rate: This is the percentage of the invoice value that the factoring company pays you upfront. The higher the advance rate, the more cash you get immediately. Advance rates vary depending on the same factors as factoring rates, as well as your payment history and volume. Typically, advance rates range from 80% to 95%.
- Funding speed: This is how fast the factoring company deposits the money into your bank account after you submit your invoices. The faster the funding speed, the better your cash flow. Funding speed depends on the factoring company’s policies, technology, and customer service. Typically, funding speed ranges from a few hours to a few days.
- Contract length: This is how long you have to commit to working with a factoring company. The shorter the contract length, the more flexibility you have to switch to another factoring company if you are not satisfied with their service or find a better deal elsewhere. Contract length depends on the factoring company’s preferences and negotiation skills. Typically, contract length ranges from month-to-month to several years.
- Recourse vs non-recourse: This is whether you are responsible for paying back the factoring company if your customer fails to pay their invoice. If you choose recourse factoring, you have to repay the advance amount plus any fees if your customer defaults on their payment. If you choose non-recourse factoring, you don’t have to repay anything if your customer defaults on their payment, but you pay a higher factoring rate to cover the risk. Recourse vs non-recourse depends on your risk tolerance and budget. Typically, recourse factoring is cheaper than non-recourse factoring.
- Additional services: These are other benefits that the factoring company offers besides funding your invoices. Some of these services include fuel cards, fuel discounts, load boards, credit checks, collections, insurance, accounting software, mobile apps, and customer support. Additional services depending on your business needs and preferences. Typically, additional services add value to your factoring experience.
Top 10 Factoring Companies for Trucking
Now that you know what to look for in a factoring company for trucking, let’s take a look at some of the best options available in the market today. Here are our top 10 picks for factoring companies for trucking based on customer reviews, industry expertise, pricing, and features:
1. OTR Capital
OTR Capital is one of the leading factoring companies for trucking in North America. It specializes in providing simple and flexible factoring solutions for small to midsize carriers and owner-operators. OTR Capital offers competitive rates starting from 0.99% per month, high advance rates of up to 97%, fast funding within 24 hours, and no long-term contracts. OTR Capital also offers non-recourse factoring, fuel cards, fuel discounts, load boards, credit checks, collections, and 24/7 customer support. OTR Capital has a reputation for being reliable, transparent, and friendly.
2. Apex Capital
Apex Capital is another popular factoring company for trucking that has been in business since 1995. It serves over 3,000 clients across the U.S. and Canada. Apex Capital offers low rates starting from 1.5% per month, high advance rates up to 100%, fast funding within minutes via its proprietary Blynk payment service or within a day via other methods, and no long-term contracts. Apex Capital also offers non-recourse factoring, fuel cards, fuel discounts, load boards, credit checks, collections, insurance, accounting software, mobile apps, and customer support. Apex Capital has a reputation for being professional, helpful, and innovative.
3. TAFS
TAFS is a factoring company for trucking that focuses on providing fast and easy factoring solutions for owner-operators and small fleets. TAFS offers competitive rates starting from 1% per month, high advance rates up to 95%, fast funding within an hour during the week via its mobile app or within a day via other methods, and no long-term contracts. TAFS also offers recourse factoring only, fuel cards, fuel discounts, load boards, credit checks, collections, insurance, accounting software, mobile apps, and customer support. TAFS has a reputation for being responsive, efficient, and supportive.
4. RTS Financial
RTS Financial is a factoring company for trucking that specializes in serving the transportation industry. It has been in business since 1995 and has over 10,000 clients worldwide. RTS Financial offers competitive rates starting from 1% per month, high advance rates up to 97%, fast funding within 24 hours or less, and no long-term contracts. RTS Financial also offers non-recourse factoring, fuel cards, fuel discounts, load boards, credit checks, collections, insurance, accounting software, mobile apps, and customer support. RTS Financial has a reputation for being experienced, trustworthy, and generous.
5. Thunder Funding
Thunder Funding is a factoring company for trucking that focuses exclusively on the freight industry. It has been in business since 2006 and has over 2,000 clients across the U.S. Thunder Funding offers low rates starting from 1% per month, high advance rates up to 100%, fast funding within hours or less, and no long-term contracts. Thunder Funding also offers non-recourse factoring only, fuel cards, fuel discounts, load boards, credit checks, collections, insurance, accounting software, mobile apps, and customer support. Thunder Funding has a reputation for being friendly, flexible, and fast.
6. Porter Freight Funding
Porter Freight Funding is a factoring company for trucking that offers customized factoring solutions for carriers of all sizes. It has been in business since 2011 and has over 1,500 clients across the U.S. Porter Freight Funding offers competitive rates starting from 1% per month, high advance rates up to 95%, fast funding within 24 hours or less, and no long-term contracts. Porter Freight Funding also offers recourse and non-recourse factoring, fuel cards, fuel discounts, load boards, credit checks, collections, insurance, accounting software, mobile apps, and customer support. Porter Freight Funding also has a dispatching network that helps carriers find loads and negotiate rates. Porter Freight Funding has a reputation for being personalized, reliable, and convenient.
7. eCapital
eCapital is a factoring company for trucking that aims to provide simple and hassle-free factoring solutions for owner-operators and small fleets. It has been in business since 1997 and has over 3,000 clients across the U.S., Canada, and Mexico. eCapital offers low rates starting from 0.75% per month, high advance rates up to 97%, fast funding within 24 hours or less, and no long-term contracts. eCapital also offers recourse and non-recourse factoring, fuel cards, fuel discounts, load boards, credit checks, collections, insurance, accounting software, mobile apps, and customer support. eCapital has a reputation for being easy, transparent, and supportive.
In conclusion, Factoring is a powerful tool that can help you improve your cash flow and grow your trucking business. However, not all factoring companies are the same. You need to find the best factoring company for your trucking business that offers the best rates, advance rates, funding speed, contract length, recourse vs non-recourse, and additional services. You also need to avoid some common pitfalls that can affect your factoring experience and results. By following the tips and advice in this article, you can find the best factoring company for your trucking business and enjoy the benefits of factoring without headaches.
Frequently Asked Questions (F&Qs)
Who has the best factoring company?
According to Forbes Advisor, some of the best factoring companies of 2023 are FundThrough, Riviera Finance, RTS Financial, altLINE, Triumph Business Capital, and TCI Business Capital. It is important to note that the “best” factoring company for you may vary depending on your specific needs and requirements. It is recommended to compare the eligibility criteria, advance rates, financing amounts, and fees of different factoring companies to find the one that best suits your needs.
What is a good factoring rate in trucking?
Factoring rates in trucking vary depending on the factoring company and the specific needs of the trucking business. A good factoring rate for trucking is typically between 1% and 5% of the invoice amount. It is important to compare the rates and fees of different factoring companies to find the one that offers the best value for your business. Some reputable freight factoring companies include OTR Solutions, CoreFund Capital, altLine The Southern Bank Company, Apex Capital Corp, Porter Freight Funding, and Provident Commercial Finance.
Is factoring worth it for trucking?
Factoring can be a helpful service for many trucking business owners. It ensures you get paid within less than a week or even the same day, of delivering a load, no matter how long it takes a customer to pay. Freight factoring ensures a steady cash flow and allows you to meet your immediate financial needs, such as fuel, maintenance, and payroll without delay. It also secures your future and stability so you can safely invest in new trucks and expand your business. However, it is important to find a factoring company that will let you use it only when it makes sense.
What is the average factoring rate for trucking companies?
The average factoring rate for trucking companies varies depending on the factoring company and the specific needs of the trucking business. Typically, charges can range from 1% to 4% per invoice. Freight factoring rates can also vary depending on several additional factors, including the number of invoices you factor, invoice amounts, whether you choose recourse or non-recourse factoring, and customer credit history. It is important to compare the rates and fees of different factoring companies to find the one that offers the best value for your business.