Best Proven Ways To Choose An Ideal Freight Factoring Vendor
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Best Proven Ways To Choose An Ideal Freight Factoring Vendor

Best Proven Ways To Choose An Ideal Freight Factoring Vendor

Freight factoring is an immediate solution to maintain continuous cash flow in your fleet. The main aim of it is to provide peace of mind to you. But you can only enjoy the benefits of a when you choose the right freight factoring vendor for your fleet. You can find several service providers out there, but not all are suitable for you. 

An ideal factoring vendor would provide you with quick payment at a reasonable rate. Additionally, it will provide you with different backend services to help you reduce your operational workload. 

We have discussed the various factors you must consider while choosing a freight factoring vendor below. Also, if you want to avoid this chaos altogether, you can find a perfect vendor for your fleet. So stay with us till the end. 

What Is Freight Factoring?

Freight factoring is a go-to solution for fleet owners to maintain the cash flow to meet their immediate needs. It is a financial transaction where a vendor turns the invoices into instant cash. It eliminates the time gap between the service done and the payment date. 

There is a fleet company XYZ. It receives a project from a client to transport cargo. It completes its work in two days, and the client provides an invoice and requests to provide cash after 90 days. 

But the fleet company has its ends to meet, such as salary, fuel bills, maintenance charges, and more. It can’t wait for 90 days as it will affect its productivity. 

So instead of waiting for the whole 90 days, they approach freight factoring service providers for immediate cash. The vendor takes the bill and provides the amount after deducting their charges. 

Now 90 days later, the freight factoring service provider can collect the payable amount from the client in place of the fleet company. 

The freight factoring service is a win-win situation for all the parties involved.

But stop, here is something important to mention. What will happen if your customer is unable to pay after 90 days? 

Here is where non-recourse and recourse factoring service comes into play. 

If you choose a recourse factoring service, you will have to pay back the advance money to the company. 

On the other hand, if you have a non-recourse factoring company, you will not have to pay the money back to the company. The vendor will absorb the risk for you. 

But only if the dealer or shipper goes bankrupt. If they claim anything else, the company can ask for its money back. 

Benefits Of Freight Factoring For Fleets

Freight factoring is an excellent way to maintain the cash flow in your trucking business without getting into a loan. It is a simple process that involves:- you complete the haul, submit the invoice to the vendor, and they will pay you 80-90% in advance. 

But it may cross your mind- why should I share my profits with the third party. Well, here are some significant benefits of a freight factoring service to clear your doubts.

  • Boost Cash Flow 

The gap between the work done and the payment is detrimental for a fleet business. Without proper cash flow, you cannot meet your operational needs, upgrade your business, or even pay for fuel and repairs. 

A freight factoring company can fill the gap by paying 80-90% of the bill in advance. So you won’t have to wait for, say 60 days, to get your invoice clear. 

  • Fuel Cards

Some fleet factoring companies also provide fuel cards without any additional cost. You can use these to avail discounts while purchasing fuel for your trucks. 

When fuel bills constitute 60-70% of your fleet’s expenses, a fuel card is a good deal. 

  • Reduce Operational Costs

A freight factoring company offers more than just a factoring service. They can help you to reduce operational costs. How? 

An ideal freight factoring service can manage invoices, follow-up calls, and payment checks. In short, they can reduce 90% of your accounting work and allow you to spend time loading more hauls. 

  • Free Customer Credit Check

Got a new customer? Well, no worries. You can check their credit check with the help of a freight factoring company. It will help you to avoid bad debt and let you know whether the customer would pay their freight bills on time or not. 

  • Haul More Loads

With continuous cash flow and reduced operational work, you can spend more time on roads, hauling loads, and generating revenue for your company. 

  • No Limits

As your company grows, you are likely to get more freight bills. As long as your brokers or shippers are creditworthy, the freight factoring company will keep changing your non-paying invoices into cash.

  • Reduce Risk

What will happen if one of your clients goes bankrupt and become unlikely to pay. If you choose a non-recourse factoring vendor, they will absorb the risk for you. 

  • No Liability

In the past, when freight factoring service was not available, fleet owners had to take loans from banks to maintain their cash flow. They didn’t have any other option as their clients paid them unpaid bills. And they could not afford to wait and delay necessary charges. 

The real problem was that the bank gave them a loan but at high interest. Additionally, the process was lengthy. And there were several limits to the loan. It was like a debt trap. They could not focus on other revenue-generating activities as they were busy repaying the loans. 

But now, fleet owners can use freight factoring services to maintain cash flow without getting into any debt. 

Factors To Consider When Choosing A Freight Factoring Service

There are factoring companies out there, but not all are the same. You can check or look for these factors while choosing an ideal one for you.

  • Quick Service

In the trucking business, time is money. You cannot afford to break the cash flow of your business. Look for a company that can provide funds faster, ideally ranging from 1-2 days. 

  • High Advance Payment

A freight factoring company provides you with an advance to the unpaid invoice. Generally, it can range from 80 to 90%, but it is always good to look for a vendor that offers higher advance payment. 

  • Specialization

Factoring service companies serve a broad range of industries. But look for a company that specializes in the trucking industry. You can go for a company with good experience in the trucking industry that can save you from liabilities in the future. How?

These companies would know the trucking industry better. And hence are capable to help you to reduce your operational work. Additionally, they would have a record of clients for your reference. 

  • Reputation

Before you choose any factoring company, you should go through their background to know how they handle invoicing, billing and collection. You can refer to the company’s review and reference on Google or their website. 

  • Rate of Factoring

One of the most significant factors you should consider while looking for a freight factoring company is the rate charges. Never let low factor rates sway you; they might include hidden fees. 

Here are some hidden fees you have to avoid: 

  • Administration or maintenance fees
  • Invoice processing fees
  • Monthly minimum Target
  • Lengthy contract or deactivating fees
  • Credit Check

Almost all freight factoring companies provide credit lines checks. It helps you to determine the credibility of a potential customer. But not all credit checks are the same. 

You have to go with a freight factoring company that provides a dollar amount credit line in writing. It will help you to watch out for any possible bad debt.

  • Additional Service

A good freight factoring company will provide you with additional services. It will offer you a fuel discounts card, fuel advances, and other things that will help you with back-office management. 

  • Ease To Access Information

Another significant factor you can look for is the ease of access to information. You should choose a freight factoring service that offers a mobile application or web portal to facilitate easy access to valuable information. 

  • Customer Service

A factoring company that offers dedicated customer service is a good-to-go option. You are likely to encounter some problems while dealing with a company. 

An ideal freight factoring company would provide you with a polite representative that will introduce you to the company’s policy. And also help you to resolve your problem. 

  • Recourse and Non-recourse Factoring

Another factor you have to consider while choosing a freight factoring vendor is recourse or non-recourse service.

But for this, you should have a clear understanding of it. 

Recourse Factoring

In case of recourse factoring, if the client denies paying the vendor owing to bankruptcy, the company can claim its money back from the fleet owner.


  • Ideal for experienced or big fleets
  • You have to take the risk
  • Low rate
  • Long-term contract
  • Minimal target 

Non-recourse Factoring

In non-recourse factoring, the company will absorb the credit risk. So if the dealer or shipper goes bankrupt, they won’t demand their advances back.


  • Best for smaller fleets
  • The company absorbs the credit risk
  • Higher fees
  • Short-term contract
  • No target

Ideally, look for a company that offers non-recourse factoring services. 

Why Choose Matrack Freight Factoring Solution?

If you don’t want to go through the chaos of finding an ideal factoring service, here is an effortless solution for you- Matrack Freight Factoring Solution.

Matrack offers one of the most effortless and reliable factoring services for fleets. We have an integrated mobile application and web portal to facilitate easy access to your information. 

Matrack offers non-recourse factoring. And hence, it becomes an ideal choice for smaller fleets too. You can get your invoice paid in the blink of an eye. Yes, you heard right. We will clear your bills within 24-48 hours. 

Charges? We even are proud to tell you that we provide factoring at only 2% and dispatch at 3%. And yes, no hidden or extra fees. You can join us or leave without paying any additional cost. 

We also have exceptional customer care service for you to access 24/7. You can reach out to our experienced and polite representatives to solve your doubts. 

We also offer free ELD, weigh station bypass, and a dashcam. 

So how do you get started?

Here is a bird-eye view of how our freight factoring works. 

  1. You have to fill out our application form. Then we will contact you to sign a factoring agreement, which will include all the details regarding our service. 
  1. You will then have to submit a list of your customers. And then, we will check their credibility. 
  1. The next time you get an invoice, you can submit it to us. And we will pay you 80-90% of the amount in advance.
  1. Your work completes here. We will then work with your client to cash the invoice. 
  1. After a certain period, we will detect our factoring fees and transfer any amount left to you. 

Key Highlights Of Matrack Freight Factoring Service

  • Factoring at 2% and Dispatch at 3%
  • Non-recourse factoring
  • No extra or hidden fees
  • Easy and fast transaction within 24-48 hours
  • Free ELD with free monthly subscription service
  • Free Weigh Station Bypass
  • Free Dashcam

Final Words

Freight factoring has numerous advantages for fleet owners. But all of it will go in vain if you don’t choose the correct option for you. There are different vendors out there. And each one has its policies. 

You have to be careful before agreeing with any company. You have to ensure to read the fine printing of the paper. And also ask for hidden fees. 

If you want to know more about Matrack freight factoring service, visit our website now. 

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