Switching Factoring Companies

Sometimes it becomes necessary to switch factoring companies.  By law you can only be under contract with one factoring company, so if your contract is not working out for you your only option is to find a new factoring company (you can not split it between two companies).  Some reasons people may consider switching factoring companies are:

The old factor is no longer professional.

Your needs are not being met.

You find a new factor that charges much lower fees.

You find a factor that better suits your business needs.

You should keep in mind that switching factoring companies can be expensive, difficult, and time consuming.  Make sure you do your research and find a factoring company that is right for you.  

Switching factoring companies works similar to a refinance.  In a sense the new factor is buying out the invoice (or contract) that is still outstanding with the first company.  You will want to consider all of these things prior to working up a financial agreement with the two companies:

• Outstanding receivables still not collected.
• Any fees still owed to the old factor.
• Amount in reserve (subtracted from the number).
• Any penalties, termination, or other fees.

Make sure that you get detailed reports of everything so that every invoice gets covered.  If you have looked at all of these things and feel it will be beneficial for you to switch just make sure you consult with all the proper people to ensure nothing will come back to bite you.

Freight Bill Factoring

Managing a trucking company can be difficult, and one of the most difficult aspects  is cash flow. Cash flow is the way money moves through your company. In the trucking industry it is typical for  clients that pay 30 to 60 days after you have shipped for them.  This can make your cash flow become a little strained.  Even though your customers have not paid you yet, you still have trucks to maintain, payroll to personnel, fuel costs and more. One way to cover these expenses while you wait for your clients to pay is freight bill factoring.

If you are a small trucking company you know it can be tough to get traditional loan financing, even medium and large companies can have difficulty.  If you are start up trucking company, or if you are going through a rapid period of expansion, you often do not have the available credit for traditional loan financing.

In such cases, freight bill factoring can help you obtain the capital you need. In freight bill factoring, a financing company – called a factor – buys the freight bill from you and advances you the cash. The factor will often in turn collect from the customer, so once you turn the invoice over, you no longer need to worry about it.