Factoring is a service that’s been around for thousands of years. It goes back to the Code of Hammurabi in Ancient Babylonia where merchants used an agent to manage their trade finances. Factoring has come a long way over the decades, and the move to digital factoring is a game-changer.
If you haven’t embraced digital freight factoring, it provides faster payments, heightened transparency, easy account management, and optimized tracking. Plus, there’s the benefit of all the other services available with a freight factoring partnership. Your trucking business thrives with the right partnership.
Get Paid Faster Than Ever Before
The digital side of freight factoring allows you to maintain a steady cash flow. You get paid as quickly as the same day your driver completes a delivery. You’re no longer being paid at the end of the month. You get paid as soon as you have a bill of lading in hand and the request for immediate payment clears.
How quickly you’re paid depends on the arrangement you make with a factor. At Saint John Capital, as long as your bill of lading is submitted by noon EST, it’s possible to get paid the same day. No more waiting. No more juggling bills until your payment arrives when the 30-day invoice payment deadline is up.
With digital arrangements, you submit bills of lading through an app. It reaches the factor within seconds, and the system gets started processing your request. Once approved, funds are sent digitally to your debit card or through an EBT that goes to your preferred bank. Even if you miss the noon deadline, you’ll still have your funds within one or two banking days.
Know Where Things Stand
Use the information in your app to see exactly where your payments are. You’ll have instant answers to what is pending, what’s finished processing, and what funds are being transferred to your banking option.
You have instant answers regarding your finances at that moment and what’s about to enter your account. You can also use this information to better understand your cash flow from week to week. That makes it easy to adjust your payment requests and workloads each week.
Having a steady cash flow is essential when it comes to keeping a business afloat during the lean times. If you’re able to keep up with truck maintenance, surprises, payroll, and monthly office expenses, you’re not relying on credit cards and exorbitant interest rates during slowdowns.
While freight factoring fees do deduct a small percentage of the money you’re owed by your client, typical factoring rates are less than 5%. Compare that to business credit card interest rates that average around 22% as of January 2025. The 1% to 5% you pay in freight factoring fees is minimal compared to credit card fees and interest.
Manage Your Books With Ease
Running a business means keeping up with a lot of financial, employment, and other paperwork. You have tax forms, invoices, bills of lading, estimates, and so many other forms you’re dealing with each week. Go back 30 years or so, and all of this was done solely on paper. There was filing, copying, and notes from phone conversations or meetings.
Invoices were sent via mail, which delayed payments as it took days or weeks to arrive via the USPS. Fax machines sped this up, but faxes could be blurry and hard to read. Office workers also struggled to keep everything organized. Filing one thing in the wrong folder created frustrating delays. Checks could get lost in the mail or a pile of paperwork.
Technology changed all of this. Even if a file is put in the wrong folder, there are ways to search for the file name. Technology in freight factoring has made bookkeeping so much simpler.
Instead of having to generate invoices, print them out, and mail or fax them to your client, they’re generated through an app and sent via email or chat. Once the freight factoring company generates the email, it’s in your account for you to look over and upload to your bookkeeping software. What used to take hours now takes seconds.
Keep Track of Shipments in Real-Time
With today’s technology, it’s easy to track where your trucks are at any time of the day or night. Use GPS to find exactly where a driver is and how much time is left before the truck arrives at the loading dock.
Because you have real-time insights into delivery times, you provide your clients with up-to-the-minute arrival times and the utmost in customer service. Clients are happier, and that helps you build a strong reputation when it comes to reliability and timely deliveries.
Plus, it allows you to make quick route adjustments if there is an unexpected delay like a crash or freak weather event. No one predicted the lake effect snow squall that has brought the interstate traffic to a stop. When you know this is happening, you can reroute your driver or alert clients of the unexpected delay.
Access to Additional Services and Perks
With digital factoring, you also have several other beneficial services and perks available. In addition to faster payments, transactions are handled with top-notch security. You no longer must worry about paperwork ending up lost in the mail or delivered to a nearby competitor who opens it inadvertently, sees your rates, and uses that to their advantage.
Business credit checks are offered to trucking company owners. Before you take on a new client, pull up their credit report on your phone, computer, or tablet and verify that they pay their bills on time and aren’t heavily in debt.
Fuel discounts are one of the top benefits of most freight factoring arrangements. Provided you use your advance payments for fuel, you use that fuel card at participating truck stops and gas stations and get discounts on every gallon of diesel or gas. Even a 10-cent discount adds up quickly and puts money back in your pocket.
Some freight factoring companies offer low-interest business lines of credit. These are excellent financial products for covering larger expenses like new trucks, an addition to your current headquarters and garage, or new office technology.
Explore Freight Factoring With Saint John Capital
Saint John Capital may not have thousands of years of history in factoring, but we do have several decades in the industry. We offer some of the lowest factoring rates in the industry and boast a substantial number of additional services that help your business thrive. We embrace the use of digital factoring and payments to ensure you get your funds as quickly as possible.
