How Freight Factoring Works

Freight factoring is a financial tool that allows trucking companies to convert its unpaid freight bills into instant cash through financing. In essence, the freight broker factoring company provides funding and uses the trucking companys bills as security. The trucking company may use the money for maintenance, repairs, fuel, or other company expenses such as monthly bills and salaries.

Freight factoring is a straightforward solution. The freight factor buys the trucking companys accounts receivables, often paid in two installments. The first installment pays for 90 percent of the unpaid invoice and wired to the companys bank account the instant the … Read the rest