6 freight factoring service mistakes to avoid
Freight factoring (transportation factoring) offers trucking companies the money and resources to manage cash flow effectively, fund new loads, and grow their fleet. Instead of waiting for past dues, factoring allows these freight companies to spend more time and resources hauling new loads. However, many individuals sign up for freight factoring services without considering all of its aspects. Doing so may result in these six mistakes, which one easily could avoid. Not reading the fine print Every factoring service provides estimated costs to businesses. For example, the service may issue a true cost, which includes a 2% factoring fee. However, businesses that overlook the fine print might incur additional fees as high as 10% if they are not careful. The ideal way to avoid this is to seek freight factoring companies that are reputable and transparent about their fees and every detail. One should also read all the terms and conditions to understand their agreement. While the factoring fee may vary, it usually falls between 1% and 3%. Moreover, advance rates may range from 80% to 95% of an invoice’s value. Lack of research Another common mistake businesses make is poor research when looking for factoring services. Not all freight companies are the same; each may specialize in working with specific industries.
