Truckers battle a brutal paradox: The more successful they become, the harder it is to succeed. Many carriers may ask: Do I need a factoring company for trucking?
As truckers take on more business, their expenses rise… but their payment terms remain static at 30, 45, or 60 days. This leaves truckers sidelined by essential costs like fuel and unable to grow their business.
Freight factoring has been proposed as a solution to this problem. Factoring companies will pay carriers within hours of their load being delivered in exchange for a fee.
Is it worth the additional fee just to have your money sooner?
It’s a valid question that many carriers consider. Let’s look at two examples to find out.
A Tale of Two Carriers
Carrier 1
Carrier 1 completes a load for $600 on a 45-day payment term. Before this carrier takes on a new load, it must pay for fuel, insurance, food, lodging, and parking. Unfortunately, it needs the funds it earned to cover its expenses, so it does not take on any new business.
At the end of the 45-day payment term, Carrier 1 has made $600.
Carrier 2
Carrier 2 completes the same load for $600 on a 45-day payment term. Because this carrier uses a factoring service, they are paid $588 just a few hours after completing the load. $12 of the $600 was spent on the factoring fee.
Carrier 2 can cover its expenses with the funds it just earned. It takes on another load for $600. Again, it is paid within a few hours minus a factoring fee for $588.
At the end of the 45-day payment term, Carrier 2 has made $1176.
These two carriers are simplifications of their businesses, but they illustrate a critical point:
Factoring is necessary for carriers wanting to grow their business.
Which Factoring Company Do I Choose?
One differentiator is more critical than any when selecting a factoring company for trucking:
Choose a factoring company that is specifically made for truckers.
Factoring companies that specialize in trucking have several advantages:
- Fuel advance programs
- 24–48-hour payment turnaround
- Shipper credit checks to help carriers avoid high-risk clients
- Access to credit and collections teams
Some factoring programs, like England Carrier Services, even offer tire and fuel discounts to their clients to deepen their savings.
Factoring is an essential service for truckers looking to expand their business. By getting access to your money sooner, you can cover your expenses, take on more loads, and grow in a competitive market.
If you’d like to explore how factoring can benefit your business, you can speak to an account manager with no strings attached by filling out the form below.
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The England Carrier Services (ECS) division offers various services for carriers ranging 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 the freedom to focus on growing their business while saving time and money.