Freight invoice factoring (freight factoring for short) is a service where you sell your unpaid invoices to a factor. That company pays you a percentage (sometimes 100%) of the money due and waits for the client to pay the amount that’s due.
Why would someone do this? It’s easy. A freight factoring company knows how frustrating it is to wait for payment. You’ve done your job, so why shouldn’t you get paid immediately? After all, a plumber doesn’t come to your house and wait weeks or months for payment, especially if you’re a new customer. You worked hard for the money that’s due, so why shouldn’t you get paid now?
In return for advancing you the money that’s owed, the invoice factoring company takes a small percentage as a fee. At Saint John Capital, our fee is as low as 1% if you have a fleet of 11 or more trucks. But, we work with trucking companies with just one or two trucks, too, so no company is too large or too small. In fact, some of our clients started with a single truck and were able to grow their businesses thanks to the speedy payments.
Some companies also charge fees if your client takes more than 30 days to pay. Plus, you could be held responsible if they don’t pay. If you’re in a recourse factoring arrangement, you’ll have to repay the money you were advanced should your broker or shipper fail to pay. Non-recourse arrangements are better as the invoice factoring company takes the loss and makes back some of the money that’s owed by selling that unpaid debt to a debt collection agency.
That’s what happens with freight factoring, but there are many other benefits to this arrangement. Here’s a comprehensive look at all of the services Saint John Capital offers.
100% Advances
Many invoice factoring companies offer rates ranging from 70% to 96%. Advances are highest in the transportation industry where they tend to fall in the range of 90% to 96%. What this means is you submit an invoice and 90% to 96% of the money that’s owed is sent to your fuel card or bank account, minus the fee for the factoring service. The remaining 4% to 10% is held in a reserve account until the client pays.
If you’re lucky, you’ll come across a company like Saint John Capital that offers 100% advances. The entire amount you’re owed is deposited to your fuel card or bank account, minus the fee. Nothing is withheld, so you get all of your money as fast as possible.
Click & Pay API
With today’s technology, you should insist on Click & Pay API no matter who you choose for factoring. There’s no reason you should have to wait for a check.
When you factor your invoices, that firm takes care of invoicing and remittance. But, you may have well-established relationships with some brokers and shippers. You know they always pay quickly. You do not have to enter into a factoring agreement with every client you have. You can pick and choose.
For the clients you want to manage on your own, Click & Pay API simplifies the payment system. Send an invoice via email and they can pay when they log into the account. You no longer have to wait for a check to arrive Click & Pay API makes it easy to submit a secure payment online with a click of a button.
With Click & Pay API, you can upload bills of lading and freight bills directly to Saint John Capital for immediate payment. If they’re submitted by the deadline, you could get paid the same day. Upload the invoices generated through Click & Pay to your accounting software, too.
Free Credit Checks
Part of growing your trucking company means taking on new clients. But, there’s always a risk with new brokers and shippers. What if they don’t pay? You’ve done the work and now they’re ghosting you.
Avoid that risk by checking their credit report. Free credit checks are another service offered at Saint John Capital. Before you take on a new broker or shipper, check their history. Do they have a lot of unpaid bills or do they pay on time? You reduce the risk of non-payment when you do a credit check before taking a job.
Line of Credit
Growing your company is your goal, but you have to be smart about it. Credit card rates can be much higher than a business line of credit. If you’re planning to get a business credit card to use on things like office updates or new computers, look into a line of credit instead. You’ll save a lot of money with low interest rates, no hidden fees, and weekly payments. Approval is instant, so you’ll know within minutes if you’re approved.
Load Finder
Partially filled trailers cost you money. Suppose your driver has just completed a haul to another state. For the return trip, the trailer is empty. You’re paying that driver for the return but not making any money. Use a load finder to look for loads near the driver’s destination that are being dropped off along the return route. You’ll make more money, which is key to growing your business.
Same-Day Payments
Sign up for a Visa card and you qualify for same-day payments. When you upload a bill of lading when picking up or dropping off a load and it’s by the deadline, the payment you’re owed gets transferred to your Visa card that day. You no longer have to wait for two, three, four, etc. days to get your payment.
Track Loads
Once a driver is on the road, you may not always know where your driver is. Use track load software to keep track of where your drivers are. If there’s a traffic delay, you’ll know and can relay that information to the employees at the loading dock at the destination.
You can also use track loads to pinpoint which driver is closest to a pick-up location if there’s a rush job available. You have a driver with a partial load and some extra time, and someone along that route has a rush job that pays double your usual rate. You could take the work, get extra pay, and have a satisfied customer.
Visa Card With Gas Discounts
After gas and diesel prices decreased, oil-producing countries like Afghanistan and Russia urged OPEC Plus to decrease production, leading to OPEC’s announcement that they’re going to cut oil production by 2 million barrels per day in November. It’s expected that gas prices will spike, and they’re already starting to go up. Gas prices were up about 7 cents a gallon.
Saving money on fuel is essential to truckers. A fuel discount card offers discounts on every gallon of diesel or gas that you purchase. Plus, you can get same-day payments to your Visa card.
Saint John Capital’s Visa card doesn’t require a personal credit score. Your drivers can use them at truck stops around the nation and at ATMs if they need cash for tolls. Another benefit to a Saint John Capital Visa is that you can check your balance 24/7 at an ATM, by phone, or on the app.
It’s so easy to get started. Head to SaintJohnCapital.com and answer a few questions. Create your account using your name, phone number, and MC number. From there, explore the different options for factoring your invoices with us.
