The main source of the growth has been that more accounts receivable finance companies have become more comfortable with freight broker factoring. With transportation factoring becoming more competitive, the factoring companies have looked to new ways to work within an industry that they understand. While the demand has always been there, transportation broker finance has just recently started offering additional perks that have made factoring desirable for more than just the cash flow aspect of invoice factoring. So what are these benefits that smaller and start up freight brokers are taking advantage of?
Quick or Prompt Pay – With the acceleration of capital to brokerage firms, quick or prompt pay programs are now easier to offer to their carries. As the transportation industry has become more accepting of electronic billing so have the freight broker Factoring companies which has made turning around the cash tied up in those invoices much faster, allowing transportation brokers offer a quick or prompt pay option to their carriers at a discount, offsetting the cost of invoice factoring making it a far cheaper option then almost any other industry.
Establish Credit – You know how important your credit rating is and how it directly effects your relationship with shipper’s and carrier’s willingness to work with you. This is yet another added benefit to working with a freight broker factoring company that is being taken advantage of. With the acceleration of Cash Flow, transportation Brokers can establish great payment trends much faster than they would be able to on their own. Once again increasing the standing with the carriers as well as the shippers and helping to grow their firm.
Letters of Credit – These been issued by invoice financing companies for years and are now expanding into freight broker finance. The traditional way that they were used was to give vendors some assurance that the company had the capacity to pay when they had not yet established strong enough credit lines or rating. This same principal applies to transportation broker factors. One of the biggest issues facing newer brokerage firms is getting companies willing to take a chance on you. A letter of credit can give the carriers and shippers that extra bit of confidence to get them moving forward with you.
With these benefits and many others, along with the increase of freight broker factors and the decrease in interest rates, more and more transportation brokers are turning to factoring. There are a lot of really good options out there but like all industries, it is not for every business and there is not one invoice financing company that is a perfect fit for every freight broker. That is why doing research and having the ability to compare the differences between the factoring companies is key.
National Factoring Group is the best way for you to find your factoring company. We are the one resource that allows you to review and compare the factoring companies across the country so that you can make the best decision for your business; both on structure as well as price. National Factoring Group sorts through thousands of options showing only factoring companies that work within your industry. We give you unique insight into each factoring company, giving you confidence in selecting the best factoring company for your business. Visit us at https://nationalfactoringassociation.com to learn more and find your next factoring company
Originally posted on Ezinearticles.com