12 Best Factoring Companies for Trucking
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Factoring companies for trucking, also called freight factoring companies, give trucking companies cash in exchange for outstanding invoices. They can be helpful to trucking companies that need working capital quickly or don’t have the staff to manage invoicing and collections, but be cautious about potentially unclear costs and contracts.
Here are our picks for freight factoring companies, as well as additional information to help you decide whether this kind of small-business loan is right for your business.
How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Best for upfront factoring pricing
Few factoring companies for trucking disclose their prices, but these companies offer at least a peek.
TruckSmarter
Time to funding: Within 24 hours.
Good to know: TruckSmarter is upfront with the rate and fees it charges and works with small- to medium-sized businesses. It has a mobile app that can be used to get fuel discounts up to $1.50 per gallon with no transaction fees.
Pricing details: TruckSmarter has a 2% rate and offers a TruckSmarter Visa Card with 1% cash back. There are no monthly minimums for the number of invoices you submit and no additional fees. A monthly contract is required, but you can terminate it with 30 days notice.
Transportation Management Group
Time to funding: Same-day funding.
Good to know: Transportation Management Group has 100% advance rates available plus you’ll have access to a fuel card, equipment financing and small credit lines. The company does not have a mobile app.
Pricing details: The company offers truck factoring rates starting at 0.675% and doesn’t require monthly minimums. You will be asked to sign a contract, but, according to the company, it’s not a long-term one.
>> MORE: The best trucking business loans
Best trucking factoring companies for funding speed
These factoring companies for trucking offer some of the fastest funding times.
Apex Capital
Time to funding: Minutes via its proprietary Blynk payment service; otherwise, same-day and next-day funding.
Good to know: Company factors freight invoices on nights, weekends and holidays. Its proprietary Blynk payment service, launched in 2020, allows customers to get paid via debit, Zelle or bank transfer. Apex specializes in small- and midsize trucking companies.
Pricing details: Apex charges a custom rate based on your needs. There are no minimum monthly volume fees, no long-term contracts and no termination fees, but few other pricing details are available on the website.
TAFS
Time to funding: One hour during the week, plus advances on weekends and holidays.
Good to know: The company’s mobile app allows customers to submit invoices to be paid right from a smartphone. TAFS is a recourse-only factoring company, meaning that if the customer ultimately doesn’t pay your invoice, you pay the factoring company. In other words, you bear the risk of nonpayment. TAFS offers factoring in numerous other industries, too.
Pricing details: Pricing information is not available on the TAFS website. The sales team will discuss costs and fees when they walk you through their factoring agreement.
RTS Financial
Time to funding: Within 24 hours.
Good to know: The company’s RTS Pro Factoring app lets you upload invoices, submit invoices in bundles, use the camera to scan invoices and access reports. RTS also does debt factoring in distribution, staffing, oilfield, textiles and manufacturing industries.
Pricing details: RTS offers a 97% advance rate and doesn’t charge ACH fees or invoice-uploading fees. Discounts to U.S. veterans are available.
TBS Factoring
Time to funding: The same day shipments are delivered to your customers.
Good to know: TBS offers both non-recourse and recourse factoring as well as an app to help you submit paperwork and verify your deliveries. Fuel discount cards are available which can save up to 90 cents per gallon. The company also offers bookkeeping services.
Pricing details: With TBS, you can receive a 50% advance on a customer order, when you commit to a three-month contract and are approved. Advance fees of up to $25 apply. There are no volume requirements or sign-up fees but you’ll need to talk to a representative for other rate information.
eCapital
Time to funding: Get paid the same day you submit your invoices.
Good to know: ECapital offers a 90-day free trial and customers get an automatic, pre-approved line of credit of up to $2,500 per truck. In addition to factoring, eCapital provides other products including payroll funding, asset-based lending, commercial credit cards, a fuel discount program and dispatch software.
Pricing details: Factoring fees are based on the factoring services you use, and the amount of invoices you submit. A $10 fee applies to instantly transfer money from eCapital to your bank account.
Thunder Funding
Time to funding: Typically within 24 hours.
Good to know: The company only offers non-recourse factoring which means it assumes all the risk in the event that your customers do not pay their invoices. A 90-day contract is required, but you can cancel after that. Thunder Funding also offers a fuel card, trucking insurance programs and fuel advances.
Pricing details: Price quotes are provided through a company representative based on company size, freight halted and other factors. There are no sign-up fees or volume requirements.
OTR Solutions
Time to funding: Same-day funding.
Good to know: Company offers non-recourse factoring. A mobile app is available to help you upload invoices and receive payment. Instant funding is offered with no bank wire fees. There’s a fuel advance program and an OTR fuel card with average savings of 54 cents per gallon.
Pricing details: You’ll need to talk to an OTR representative to get pricing details. There are no sign-up fees or monthly minimums.
Porter Freight Funding
Time to funding: Within 24 hours and sometimes sooner.
Good to know: At Porter Freight Funding you can choose between recourse and non-recourse factoring. The company also offers a mobile app and a dedicated account executive as well as a fuel card program, fuel advances and discounts. Contract options are month-to-month, six months or annual.
Pricing details: The company offers flat-rate pricing (as opposed to tiered) and there are no monthly minimums with one or more trucks.
CoreFund Capital
Time to funding: Same day.
Good to know: The company offers both recourse and non-recourse factoring and works with startups and trucking companies with one to 100 trucks. No mobile app is available, but a fuel discount card is offered. Factoring is also offered for other industries such as oil and gas, distribution, manufacturing, staffing and technology.
Pricing details: CoreFund Capital collects a fee for its services, but doesn’t disclose the amount on its website. However, there are no monthly minimums, no termination fees and no long-term contracts.
Single Point Capital
Time to funding: Same day.
Good to know: When you use Single Point Capital’s factoring services, you’re assigned a personal account executive to work with. The company has a program that helps you defer up to 50% of your insurance down payment which can be repaid from your factoring invoices. A mobile app is offered and you’ll have access to fuel advances and lines of credit.
Pricing details: The company customizes its rates to your business based on factors such as your customers and purchase volume. Single Point Capital requires a contract. You’ll need to talk to a representative to learn more about rates and fees.
What is freight factoring?
Freight factoring, also called transportation factoring or trucking factoring, is a process in which a factoring company buys invoices from a trucking company at a discount and advances payment once the order or load is delivered to the customers. The arrangement creates a source of fast cash for your trucking company. The factoring company charges a fee for its services.
Two types of factoring, recourse and non-recourse factoring, are generally offered by companies for trucking:
Recourse factors. If the customer ultimately doesn’t pay the invoice, the trucking company pays the factoring company. The trucking company bears the risk of nonpayment.
Nonrecourse factors. If the customer ultimately doesn’t pay the invoice, the trucking company doesn’t have to pay the invoice. The factoring company bears the risk of nonpayment, which is why nonrecourse factoring typically costs more than recourse factoring.
Do I need a factoring company for trucking?
A factoring company for trucking can be a source of quick cash, which could come in handy if a trucking company is having trouble making payroll or paying other bills, or if it doesn’t want to take out a loan or other financing. In addition, trucking businesses that don’t have the time or staff to deal with collecting money from customers might find factoring attractive.
Pros
Fast cash.
Flexible — factor only what you need when you need it.
Credit score doesn’t matter.
Cons
May cost more than bank financing.
Lender may come after trucking company if customers don’t pay.
How much do factoring companies charge?
Trucking factoring companies buy accounts receivable at a discount, meaning that trucking companies selling invoices won’t receive the full value of those invoices. The size of that discount is one of the key factors to consider when choosing a factoring company for trucking.
However, it’s rare to get an upfront price from factoring companies because they typically base their discount rates on a variety of factors:
Whether you want recourse or nonrecourse factoring.
Who your customers are.
The volume of the invoices.
Whether you want to pay a flat factoring fee (the same percentage fee for every invoice) or a tiered factoring rate (a lower fee on invoices that pay quickly and a higher fee on invoices that pay more slowly).
Whether the company also charges invoice submission fees or invoice processing fees.
For these reasons, it’s important to review the contract terms of any factoring agreement and make sure you understand the costs before you sign up.
Alternatives to freight factoring
Freight factoring is just one way to borrow money quickly. These other options might be viable alternatives for your trucking business.
Business credit cards
Borrowing money using a credit card gives you the opportunity to keep 100% of what your customers pay you. Credit cards can carry various rewards, such as travel miles or cash back, and a business gas credit card may make sense for a trucking company. But be sure you can pay your credit card balances off in full each month, because the interest charges may be higher than what you’d pay in factoring fees.
» MORE: Fuel cards for small business
Business line of credit
If you need access to ongoing working capital, drawing from a business line of credit might be cheaper than factoring to cover short-term costs. You’ll likely have a higher spending limit with a line of credit than with a business credit card, but there may also be higher qualification requirements in terms of credit score and financial performance.
