123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Insurance >> View Article

3 Facts That You Must Know About Freight Factoring Services

By Author: Husam Jandal
Total Articles: 3

The concept of freight factoring has certainly gained some popularity. A steady cash-flow is imperative to every business. Factoring ensures this by lending you money based on your invoice and helps you to maintain a constant workflow. A lot of things can happen from the client’s end to delay your payment process, but that should not hinder your enterprise. With this concept, you do not have to depend on banks that run a whole lot of processes to sanction a loan.

However, the whole process of factoring just does not involve the exchange of money and invoice. There are a few facts that you must know so that you are not thunderstruck during the process. A factor will maintain a certain level of safety standard, and you cannot blame them for following a few protocols. Here is a list of 3 facts that you must note down if you own a freight service and intend to go for factoring.

1. Factors check credentials of both you and your client

This is the first step when you contact a freight factoring company with your invoice. They will run a quick background check of your business which involves registration, legal papers, revenue rate, cash-flow history and more. They will conduct a similar check on your clients as well. So, both you and your client will have to present your papers to the factor.

The firm will pay you money and will expect the same from your client. It is only logical that they will look into the credentials of both parties.

2. Your invoice counts only after you have transported the load

You cannot present an invoice whose delivery is still pending. Generally, you can contact the factor when you sign the contract with your client. The agency runs its necessary checks and approves the loan. You make the delivery and collect the invoice from your client. On presenting this, the factor transfers you the decided amount. Approval takes less than 24 hours in case of a legit freight service. However, you receive the money only after you have delivered the goods. Do take a note of this difference.

3. Factors accept payments directly from your client

You do not come in when the client actually pays. Factors do charge a commission for their service and take the net payment against the invoice directly. For instance, if you are to receive $100 from your client, the factor will pay you $95 at the time of approval. However, when your client pays, they transfer $100 to the factor. The whole process gives the factor a commission of $5 or 5%. This is primarily how they earn. Every single entity is in a win-win situation with this.

To conclude –

There are also agencies that claim deposits for lending you the service but most do not. It's ultimately your call and your cost-benefit analysis that will tell you whether to opt for the service or not. However, freight factoring does bail you out at times of delay payments and this fact is undeniable. Let these 3 facts act as guiding pointers to you and help you with the right choice. Go to your drawing boards and decide what’s best for your business.

Find more information, about freight factoring here

Total Views: 101Word Count: 547See All articles From Author

Insurance Articles

1. Loan For Plot Purchase And Construction 9642445885 Housing Loan
Author: Loansa Assit

2. What Right Flood Insurance Policy Should Include?
Author: Claim Makers

3. Mortgage Loan Against Property
Author: Loansa Assit

4. Select The Best Health Insurance For Foreigners Based On Available Benefits
Author: Alzbetaberka

5. Choose An Expat Health Insurance Plan Carefully Based On Two Vital Factors
Author: Alzbetaberka

6. Home Loan For Senior Citizen Apply 9642445885
Author: Loansa Assit

7. Self Employed Home Loans 9642445885
Author: Loansa Assit

8. The Seo Service In Delhi
Author: perveen

9. Brief Classification Of Health Insurance Plans Based On Chief Segregating Factors
Author: Alzbetaberka

10. Nri Home Loan Apply 9642445885 How To Apply For A Home Loan
Author: Loansa Assit

11. Why It Is Important For Women To Have A Life Insurance Plan?
Author: Raj

12. Reasons Why Renewal Of A Term Insurance Policy Is Vital
Author: Maheshwari

13. How To Find The Best Insurance Apps For Agents?
Author: payal gandhi

14. Hire The Best Property Insurance Claims Adjuster For Handling Property Insurance Claims In New Jerse
Author: Donna

15. Why Car Insurance Online?
Author: winds lu

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: