Managing cash flow can be a difficult task for any company these days. The challenge can be even more daunting for those involved in freight shipping and transportation and who want to get paid for more loads more quickly. With so much economic uncertainty and market instability, it can be difficult for companies to keep the balance of operational costs and margins of profit in check. Taking advantage of freight factoring capital services and partnering with an industry expert and freight factoring capital company can make financial planning and management much more streamlined. What is freight finance, and why does it matter? Read on to find out.
What Is Freight Capital?
Freight factoring capital usually comes from unpaid invoices in the transportation and freight industry. In many cases, self-managed invoices and payment processes can result in massive payment delays. These can reach two or even three months in length regularly.
This type of delay in payment not only slows down internal growth and operations but can also put companies at a severe disadvantage as they struggle to pay bills or meet payroll and other critical timelines. Thankfully, there is a better way to deal with invoice payment delays and speed up the process. Cash flow management becomes much simpler and easier with capital factoring & finance support from a dedicated factoring company.
How Factoring Capital Companies Offer Access to Freight Capital
Freight finance factoring may seem too good to be accurate, but it is a genuine service that freight transportation companies can take advantage of regularly. Freight factoring services work by taking a company’s accounts receivable and turning them into cash that the company can use now, rather than waiting months for the actual payment from the customer. This more immediate payment is possible because the freight factoring capital company essentially buys freight bills of lading or outstanding invoices.
Instead of waiting for a load to be paid out, hopefully, sooner rather than later, a factoring company busy with that debt and gives the money to the freight company to invest back into their company’s operations. The factoring company will take a small fee to cover their expenses and ensure they profit from their services. So, suppose you, as a transportation company, have $3,000 in unpaid invoices that a capital factoring & finance company buys. In that case, you will get that money minus whatever fee they charge for giving you access to that cash right away.
The Benefits of Freight Factoring
Aside from significantly improving cash flow that allows for better business health and financial stability overall, factoring capital services also provide several other benefits:
- Freight finance access to improve busying and negotiating power.
- Easier time meeting payroll and other payment deadlines in the company.
- Less concern over fees and expenses related to missed payments.
- Greater bargaining power compared to other less funded freight companies.
- Ability to tap into capacity opportunities when they are available.
- Lower credit risks and financial risks in the eyes of different brokers and lenders.
- Easier time growing and implementing new technologies and innovations.
- Overall improved outlook and performance across the entire company network.
These are just some of the standard benefits freight transportation companies can expect from a partnership with a freight factoring capital company and easier access to factoring capital assistance.
Boost Freight Factoring Capital Access With the Right Factoring Solution, HaulPay
With all the current uncertainty and market instability, combined with continued recovery across domestic and global supply chains, cash flow management can be more challenging than ever. As companies struggle to balance profits and expenses, long wait times for invoice payments can be crippling for many freight transportation companies today. Partnering with a freight factoring capital company can simplify the delicate financial planning and management process.
By tapping into the financial stability and growth potential freight finance factoring offers, companies can grow and thrive, despite current pressures and volatility. Connect with ComFreight today to learn more about capital factoring & finance services, and be sure to schedule a demo of HaulPay for yourself.