What do you know about freight factoring? You might be familiar with the service, but if you’re not, it’s a way to get paid immediately for the loads you pick up or deliver. Timing is everything and determines how large a payment you get upfront. If you submit the bill of lading for payment when you pick up the load, you’ll get a smaller payment than if you wait until you’ve dropped off the load. Take a closer look at how it works.
Pick up your load or deliver it and submit the bill of lading to the freight factoring company.
The invoice factoring team goes over the bill of lading and submits the payment request so that the appropriate amount of money goes to your Visa card or bank account.
Receive payment and download the generated invoice to your accounting software.
When you factor your invoices, you’ll get the money you’re owed minus freight factoring fees. If your freight factoring agreement gives you a portion of the money you’re owed, which is possible, you’ll get that percentage minus the fees. The balance is submitted once your client pays the invoice factoring company.
For example, suppose you’re owed $10,000 and you have a 95% factoring agreement. You’d get $9.500 minus the invoice factoring company’s service fee. When your client pays the invoice, you get the remaining money. If that fee is 3%, you’d pay the company $300 for the service. There can be other fees charged by your bank, so make sure you understand them before signing a contract.
That’s a quick breakdown of the way invoice factoring works. What other services are available from invoice factoring companies like Saint John Capital?
Click & Pay API
Click & Pay API simplifies administrative tasks. With this software, you can create a new auto straight from the software. You can upload your bills of lading and send them to Saint John for invoice factoring, and you’ll get invoices that you can then upload to your bookkeeping software. When you get paid, you’ll have a record of when the payment was submitted.
You’ll have everything you need to keep track of money that’s coming in, the invoices that are due, and an easy way to upload bills of lading for quick payment. It simplifies your bookkeeping.
You may not want Saint John Capital factoring the invoices for all of your brokers or shippers. You have a long-term broker who always pays on time and you trust that customer. Why pay a factoring fee when you don’t have to? That’s okay. There is no rule saying that once you sign up with Saint John Capital that you must factor every clients’ invoices. You’re free to pick and choose which you want to and which you don’t.
Find Loads
Find Loads software allows you the chance to maximize profits. Saint John Capital’s Find Loads app has millions of loads available. Sort through the options and find inbound or outbound loads that match your drivers’ routes. Find the higher paying jobs that boost profits and stop your drivers from driving with empty trailers.
The Find Loads software works on Android or iOS and comes with a free trial for 60 days. You and your staff have three months to test it out and make sure it’s exactly what you expected.
Free Business Credit Checks
You spot a job and want to take it, but you’ve never worked with that broker or shipper before. With free business credit checks, you can make sure the broker you’re about to work with has a solid history of paying truckers on time. If you find the broker has a horrible credit history, you’ll know before you agree to haul a load.
Track Loads
Your drivers are on the road, but your clients are calling you to get an exact location and ETA. With app features like Track Loads, you can pull up your driver’s exact location and have immediate answers.
Suppose a client calls and asks if you can fit in a rush job. You can quickly see where the nearest driver is and determine if there’s time before or after the load is delivered to take on this additional job opportunity. You can even assign the load to your trucker through the app, and your drivers get the notification for the additional work.
The other benefit to Track Loads is that your dispatcher may learn there is a major closure due to weather, and your driver isn’t caught up in it yet. You’ll be able to reroute your driver based on your driver’s current location.
Loan Products
As a trucking business owner, there will come times when borrowing money makes financial sense. You can grow your fleet if you purchase a new truck and that requires a loan. You may want to purchase a building rather than continue to rent. That’s a good reason to take out a business loan.
Sometimes, however, you need to have a steady cash flow for the unexpected. Your truck needs major repairs to get it back on the road. You don’t need a long-term loan for this, but you do need the option of spreading out that loan payment over several months. Many business loans can take weeks to go through credit checks, final approval, and the loan closing.
A line of credit is ideal for this situation. It works like a credit card in that you access the available loan funds as you need them. You may have a line of credit for $10,000, only need $5,000, and never have to pay for the funds you don’t use.
Why choose a line of credit over a credit card? The interest rates are far more favorable. You’ll save a lot of money with a line of credit.
For example, the interest rate (as of 9/12/22) for a line of credit with Wells Fargo is the prime rate of 5.5% plus 1.75% or 7.25%. Meanwhile, a Wells Fargo Business Platinum is prime plus as much as 17.99%, which could be up to 23.49%. You’ll find many other financial institutions out there offering business loans and business credit cards, but the bottom line is that you save a lot of money with a line of credit.
Visa Cards
A Visa card is a must-have for a trucking company. When you choose one, you want to partner with a financial company that offers rewards that help you save money on everyday business expenses. A fuel savings program is essential. Every gallon of fuel you purchase, you’ll save cash. If your fuel savings is 25 cents per gallon, in just 100 gallons, you’ve saved $25.
What other rewards can be helpful to your trucking company? Cards that offer extra rewards points on restaurant and quick stop purchases are beneficial. If you get triple rewards points on purchases at a store like Pilot Flying J, you could take all of those rewards points and apply the cash value to your monthly payment.
Saint John Capital provides much more than invoice factoring services. Partner with us to access all of the benefits you can get, including fuel discounts, find load boards, load tracking, and lines of credit options. With so many possible benefits on top of getting paid immediately instead of waiting weeks or months, it’s important to take a closer look. Reach us by email if you have questions.
