Choosing which load factoring company to trust with your business is a big decision for any carrier. You must select the company that provides the best benefits for you. This article reveals the top 7 factoring companies based on reputation, along with what you can expect when you do business with them.
What is freight factoring?
Freight factoring, also referred to as transportation factoring, truck factoring, and freight bill factoring, makes it possible for a person or business that delivers a load to sell the invoice to a factoring company. The factoring company then pays them the total amount of the invoice, less a small percentage, within a day or two.
The small factoring expense can be better for many truckers or trucking businesses than waiting a month or more for a client to pay the invoice. Getting paid faster — rather than more — can help with cash flow issues, including paying expensive commercial truck insurance and fuel costs.
Be aware: Factoring should not be confused with lending. When a factoring company purchases your invoice, that invoice belongs to it. With factoring, drivers and businesses get paid in advance and aren’t required to pay back any funds. The payment for factoring is covered when the transaction takes place.
7 Best factoring companies for trucking businesses
There are more than 100 companies offering factoring service for trucking businesses in the marketplace, which can make it overwhelming to look for the best one for your business. We are done intensive research to find the top 7 providers for your consideration:
1. Apex Capital
Apex is a leading truck factoring company. Founded in 1995, Apex is one of the most established truck factoring operations. It provides clients with top-tier customer service and communications, things load factoring companies often don’t get right.
Apex gets high customer marks, with many citing the speed of processing invoices and getting support navigating the factoring process, which can significantly benefit newer truckers and trucking companies. The company specializes in working with small- to medium-sized trucking businesses.
Apex offers the following:
- Recourse and non-recourse factoring
- Flat rate two percent invoice factoring
- No minimum monthly fees or termination fees
- Free credit checks
- No hidden charges
- Fuel card discounts
- 24/7 access to the Apex online portal
- Convenient mobile app
- Dedicated account executive.
Be aware there is one negative about working with Apex. While under contract, it demands that you factor all your invoices with them. This differs from many other factoring companies that allow you to factor with multiple firms. This gives you the freedom to decide which invoices make the most financial sense to factor with which company.
Apex can provide funding in minutes, same-day, and next-day. It also offers several options on how you get paid.
2. CarrierHQ
CarrierHQ is another multifaceted company that offers factoring and other services for truckers and trucking businesses.
If you do business with CarrierHQ, you can expect the following:
- Relatively low factoring rates
- High advance rates
- Funds can be deposited within one day
- Online, mobile-friendly invoice submission
- Money off on gasoline prices.
CarrierHQ is also a commercial truck insurance broker, providing truckers and trucking companies with a wide array of affordable trucking coverages from leading insurance providers.
CarrierHQ offers its factoring customers some down payment assistance on their commercial truck insurance policy. Instead of having to pay 20-30% down payment on their commercial truck insurance policy, their customers can only pay 5-10% to get its started and will pay the remaining on affordable monthly payment plan. If that is something you can be interested in, be sure to ask them for the details.
3. OTR Solutions
OTR Solutions is a non-recourse factoring program. It’s an industry leader in service, features, and benefits. The company was founded in 2011 to help carriers and owner-operators maintain regular and consistent cash flow while growing their businesses. OTR Solutions has experience working with companies of all sizes. It’s focused on building strong long-term relationships with its customers.
OTR Solutions offers transparent flat factoring rates with no hidden fees. It also doesn’t require long-term contracts or commitments like many other trucker factoring firms.
OTR Solutions regularly earns overwhelmingly positive reviews. Users regularly cite its professional and personable customer service and quick response times.
OTR Solutions offers its customers the following:
- Recourse and non-recourse factoring
- No chargebacks on cleanly delivered loads from approved brokers
- 24/7 credit checks
- Convenient invoice factoring through its client portal and mobile app
- No monthly minimums, volume limits, or credit restrictions
- A dedicated account manager.
What’s more, OTR Solutions has earned 4.7/5 stars on Google and an A+ rating from the Better Business Bureau®. You can expect funding in 24 hours, although OTR has a daily time cut-off.
4. eCapital
eCapital is a truck factoring firm that offers top-tier customer support. This is true whether your trucking business is large and well-established or just getting started. The company has recently merged with Accutrac Capital, another top factoring company.
eCapital offers:
- Recourse and non-recourse factoring
- Complimentary credit checks
- Factoring lines of credit
- Discount fuel cards
- 24/7 account access.
Your first funding with eCapital can take up to 48 hours. After that, it processes invoices faster. eCapital gives customers an automatic, preapproved line of credit of up to $2,500 per truck. Transferring money from eCapital to your bank account costs ten dollars, and factoring costs start at two percent.
There are some negatives with eCapital. Clients report some negative experiences with the firm, especially when it comes to customer communications and service. The firm also has contracts that are difficult to understand. It can also be challenging to cancel your contract. However, many customers are pleased with eCapital, so it could be worth cautiously checking it out. The recent merger could help resolve some of the contract and service issues. The company offers a 90-day free trial which could help you determine if it’s the right truck factoring company for you.
5. TAFS
TAFS prides itself on speedy factor funding. You can get money within 24 hours, 365 days a year.
When you factor with TAFS, you can expect the following:
- Recourse factoring only
- Several program options that range from getting funding in one hour to one week
- 24/7 online account access
- Free credit checks
- No minimums
- Fuel and truck maintenance discounts
- Ability to submit invoices online or through an app.
- Relationship specialists that strive to provide quality customer service.
Be aware that customers have recently had some negative experiences with TAFS. One of the biggest complaints is that the contract termination fee is very high, making it hard to change factor providers. Customers also report experiencing communication issues.
6. TBS Factoring
TBS Factoring Service provides factoring and other services to companies in the transportation industry.
It has more than 50 years of experience working with truckers. TBS factoring is known for its use of cutting-edge technology and for providing quality service.
TBS Factoring offers its trucker clients:
- Recourse and non-recourse factoring
- No volume requirements
- Fast payment through its app
- Fuel advance program
- No sign-up fees
- Fuel card benefits.
TBS can provide financing the same day you deliver your load. It also offers a program that allows truckers to finance 50 percent of trucker insurance down payments through eight weekly payments from factored invoices. The company is also unique because it offers bookkeeping services.
7. Triumph
Triumph is a multifaceted company serving the trucking industry. In addition to factoring services, it offers truck insurance, equipment financing and other forms of lending, and more.
For almost two decades, Triumph has provided financial solutions to thousands of trucking companies.
Triumph offers factoring to owner-operators, fleets, and freight brokers.
If you partner with Triumph, you can expect the following:
- Recourse and non-recourse factoring
- Same-day funding
- Fuel card program
- The online portal lets you check a broker’s credit and the status of your payment 24/7
- No minimums and no reserves.
You can also get access to affordable trucker insurance through the Triumph Insurance Group, which can be integrated with your factoring services from the firm. Triumph Insurance offers low-down payments and flexible premium options to get new drivers on the road and keep them there.
Is factoring worth it for trucking businesses?
Factoring is worth it for trucking businesses because it can provide instant access to capital that would otherwise be tied up in unpaid invoices. By factoring, a trucking business is able to quickly pay its bills, make investments and grow the business, giving them an edge over the competition. In addition, factoring can help a trucking business better manage its cash flow and reduce its administrative costs associated with accounts receivable management.
How much do invoice factoring companies charge trucking busineses?
Invoice factoring companies typically charge a fee of between 1% and 5% of the invoice amount for trucking businesses, depending on the size and type of the business. The main factors that affect the fees is how long it takes your customer to pay the invoice to the factoring company.
Some factoring companies may also charge additional fees such as account setup fees or monthly maintenance fees. It is important to compare quotes from different companies in order to get the best deal.
Who pays factoring companies?
Typically, your customers or brokers pay the invoice factoring companies. You pay the invoice to the factoring company and they will collect payment from the company issuing the invoice, which is usually your shipper or your broker.
Do I have to factor every invoice?
No, you don’t. Some factoring companies require trucking businesses to factor all invoices with them. However, many factoring companies don’t. Having the flexibilities to choose the right factoring company for each of your invoice is important. Make sure you shop around and compare fees from different factoring companies to choose the best one for each of your invoices.
Do factoring companies check your credit score?
No, factoring companies don’t usually need to check your credit score because they don’t collect the payment of the invoice from you. YOu collect payment from your shipper or your broker. They do check the trustworthiness of your shipper or broker before determine if they can factor your invoice and how much they would charge.
