Freight factoring can free up cash, and allow your business to take advantage of opportunities that might otherwise pass you by. If you feel pressured by a time sensitive purchase, you could use a freight factoring company to get an advance on your invoices and secure enough cash to go all in.
Freight factoring is the act of converting unpaid shipping and freight invoices into liquid cash. By selling the unpaid invoice to a freight factoring company for a cash advance of around 90% of the invoice value, your business can ensure that it has the money needed to make time-sensitive payments.After securing payment from your customer, the freight factoring company will then send you the remaining 10%, after deducting their nominal fee (typically between 0.5-4% of the total invoice value).
Freight factoring is a great way to get an advance on your shipping and freight invoices. Assess pricing and get factoring quotes today
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No companies need freight factoring, it’s simply a way of improving your cash flow and making sure your business has enough money on hand to take advantage of opportunities that might be time sensitive. However, with the low cost of the service, it’s not a bank-breaking choice if you ever find yourself short on cash.
Smaller businesses might not be able to use freight factoring to its fullest potential, as many companies require a specific annual turnover threshold in order to use their service. So businesses that have yet to prove themselves are going to have to establish themselves a bit before opting for freight factoring.
You won’t have to actively pay a freight factoring company, rather, they take a small fee directly out of the invoice you’ve sold to them. This is usually very nominal – tending to fall between 0.5-4%. And while this isn’t directly associated with cost, the advance you receive on the invoice will typically go up to 90% – you’ll receive the final 10% (minus their fee) once your customer has paid the company.
And another thing worth noting is that many freight factoring companies won’t deal with businesses that make less than a certain amount of annual turnover. These amounts vary, so check with an organisation before approaching them.
By filling out this form, you'll be able to receive tailor-made quotes that suit your business and needs. Provided you fit the factoring business's requirements (like having the necessary annual turnover), you’ll be able to talk to them and nail down a quote that suits you.