Freight factoring can sound intimidating. In reality, the factoring process is a simple, easy, and valuable way for carriers to get paid within 24 hours, rather than the typical 30-90-day waiting period.
Here’s a step-by-step guide for how freight factoring works.
What Is Freight Factoring?
Freight factoring is when a carrier sells their freight invoice to a factoring company, the factoring company pays them within 24 hours, takes a small fee, and then waits to be paid by the customer.
For carriers, factoring is an essential tool for covering expenses, taking on new business, and maintaining healthy cash flow.
How Does Freight Factoring Work? Step by Step
Here’s a walkthrough for how a typical factoring process happens.
Step 1: Deliver the load
Do the work you always do: no additional steps, just complete the load.
Step 2: Submit your rate confirmation and Bill of Lading
Once you’ve secured the Bill of Lading upon successful delivery, submit the paperwork, including the rate confirmation, to your factoring company.
Step 3: Provide your invoice to the factoring company
You can create an invoice yourself, or some factoring companies will even produce an invoice for you.
Step 4: Get paid
Your factoring company will deposit funds directly into your bank account, typically within 24 hours of submission.
That’s it. Once you’ve been paid, the factoring company will collect from the shipping company. The entire factoring process is straightforward for carriers.
Which Factoring Company is Best?
The truth is that factoring should be as simple as four steps… but some companies complicate the process.
England Carrier Services provides the convenience of a four-step process and these unique benefits:
- The deepest fuel and tire discounts in the industry
- Free online credit checks so you can avoid fraud altogether
- A dedicated account manager who knows your business
- Priority access to load boards
The England Carrier Services factoring program isn’t only a payment tool: it’s a robust suite of services designed to help carriers grow their businesses.
When Does Freight Factoring Make Sense for You?
If you’ve found yourself in any of these situations, freight factoring is a perfect solution for your business:
- You’re waiting 30–90 days to get paid
- You’re having to choose which bill to pay every month
- You’re turning down loads because you can’t keep up with expenses
- You’re wasting time chasing shippers to pay you
So, how does freight factoring work? By submitting your paperwork to a factoring company, you get paid faster, keep up on expenses, and can take on more loads.
When you factor with England Carrier Services, you get faster payments, discounts on fuel and tires, and tools to fight freight fraud.
Click here to explore freight factoring with England Carrier Services.
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The England Carrier Services (ECS) division offers a range of services for carriers, from maintenance to support. As ECS members, carriers have access to nationwide discounts on fuel and tires from dedicated team members committed to finding the best price. ECS also provides factoring services with benefits such as same-day funding to a bank account or fuel card. These options allow carriers to focus on growing their businesses while saving time and money.