In the logistics and freight industry, where timely cash flow can be the difference between growth and stagnation, accounts receivable factoring can be a vital financial lifeline for carriers. This specialized form of factoring enables carriers to convert their outstanding invoices into immediate cash, addressing the common challenge of delayed payments in the freight sector. It’s a strategic move that ensures carriers have continuous access to the funds necessary for fuel, maintenance, and operational expenses.
Freight truck accounts receivable factoring offers several compelling advantages for carriers:
- Immediate Funding: Unlock cash tied up in unpaid invoices quickly, improving your cash flow and allowing for immediate reinvestment in your business.
- Credit Management: Factoring companies assess the creditworthiness of your clients, reducing the risk of bad debt and freeing you from the hassle of collections.
- Focus on Core Operations: With the administrative burden of managing receivables handled by your factoring partner, you can concentrate on what you do best—moving goods efficiently and growing your business.
Based on our DAT experts’ opinions, this guide is designed to help carriers navigate the intricacies of freight truck accounts receivable factoring. Whether you’re a small owner-operator or a large fleet manager, embracing accounts receivable factoring can significantly enhance your financial flexibility and operational efficiency.
Key factors for factoring company selection
Selecting the right accounts receivable factoring company can be a pivotal decision for carriers. The choice can significantly impact your cash flow management, business growth, and day-to-day operations. Here are the essential factors carriers should consider to ensure they partner with a factoring company that best suits their needs:
1. Competitive Rates and Fees
- Understanding the Cost: Look for transparent pricing and low fees. Factoring companies charge a percentage of the invoice amount as their fee. Comparing rates across different providers can help you find the most cost-effective option.
- No Hidden Fees: Ensure there are no hidden charges, such as application fees, processing fees, or termination fees, which can add up and affect your profitability.
2. Funding Speed
- Quick Access to Funds: The primary advantage of factoring is improved cash flow. Select a company that offers same-day or next-day funding to ensure you have access to capital when you need it most.
- Efficiency of Transactions: Evaluate the company’s process for invoice submission and approval. A streamlined, digital submission process can significantly reduce waiting times.
3. Contract Flexibility and Terms
- Flexible Contracts: Look for factoring companies that offer flexible terms, such as month-to-month contracts, to avoid long-term commitments that may not align with your business’s evolving needs.
- Minimum Volume Requirements: Some companies require a minimum volume of invoices to be factored each month. Ensure these requirements align with your business’s cash flow needs and operational volume.
Top 10 accounts receivable factoring companies
Here are the top 10 best accounts receivable factoring companies based on our DAT experts’ recommendations:
Partnered with DAT, OTR Solutions ranks among the top-rated factoring companies in the field. They offer the only true non-recourse factoring program in the industry, meaning you can get paid quickly with a flat rate and no hidden fees or monthly volume minimums.
Also, when you sell your invoice to a freight factoring company, there’s no need to wait 30 to 90 days to get paid. With OTR Solutions BOLT Instant Funding, you can get paid in minutes. Use the mobile app to submit invoices whenever, wherever. They even have a fuel card with $0 in-network transaction fees accepted at over 8,000 locations, helping further improve your cash flow.
OTR Solutions highly ranks on multiple review sites, including 4.7 out of 5 stars on Google and 4.9 out of 5 stars in the App Store. With a dedicated team to manage your back office needs, OTR helps you focus on what’s most important—staying on the road.
Established in 1995, Apex Capital Corp has been instrumental in guiding carriers through the factoring process, facilitating rapid access to funds, and contributing to their business growth. Carriers of varying sizes appreciate the support from Apex Capital Corp, highlighted by the provision of a dedicated account manager, and round-the-clock access to their online Account Management Portal.
Plus, clients benefit from complimentary credit assessments, discounts on fuel cards, and a mobile application that enables factoring transactions from any location. Apex Capital Corp distinguishes itself by not imposing termination fees, requiring monthly minimums, or concealing extra charges, and it maintains a transparent flat rate of 2% for invoices already issued.
However, it’s important to consider that when working with Apex Capital Corp, carriers are reportedly restricted from conducting business with other accounts receivable factoring companies, which could limit your options.
3. RTS
Since its inception in 1986, RTS has been committed to simplifying the operational challenges faced by carriers, providing both recourse and non-recourse factoring services at competitive rates. Clients highlight the fast funding process, often receiving funds within a 24-hour timeframe, alongside commendable customer support.
Additionally, RTS enhances carrier operations with its equipment leasing opportunities, a fuel card program, an agent/referral program, and specialized trucking software designed for ease of use.
However, there are certain criticisms from RTS clients, particularly regarding pricing transparency. While it’s advertised that carriers can obtain up to 97% of the invoice value upfront, user feedback indicates that the clarity of RTS’ pricing structure could be improved. Moreover, the process for applying for factoring services is noted for its lack of online accessibility, requiring potential clients to engage directly with a sales representative to explore factoring solutions tailored to their business needs.
Phoenix Capital Group distinguishes itself by offering customized factoring solutions to carriers of all sizes. From new carrier startups to those overseeing large fleets, Phoenix Capital Group provides accounts receivable factoring options with a straightforward flat-rate fee structure. Their services are designed to meet a variety of needs and risk preferences. Clients also benefit from access to a load board, equipment financing, and a fuel card program offering discounts at over 1,900 commercial fuel stations.
While many clients have had positive interactions with their dedicated account managers, some have noted challenges such as delayed payments, difficulties in reaching representatives, a limited selection of approved brokers, and variable support with back-end billing issues.
Porter Freight Funding offers competitive factoring solutions, including same-day invoice funding to enhance carriers’ cash flow and mitigate the challenges of outstanding invoices. Catering primarily to owner-operators and small carriers, this trucker-focused factoring company also features a dispatching network with pre-vetted brokers and shippers, alongside offering fuel cards, insurance quotes, and help with compliance.
However, some clients have reported issues in contacting their account managers, necessitating greater involvement in the factoring process. Additionally, there is feedback indicating that carriers operating three or more trucks are required to achieve a certain monthly factoring volume, and the range of pre-approved brokers is somewhat limited, potentially restricting flexibility more than anticipated.
TBS Factoring stands as a reputable provider of truck factoring services, catering to both small companies and large enterprises. With a comprehensive suite of offerings including flat-rate factoring, recourse and non-recourse options, fuel cards, and a user-friendly mobile app, TBS Factoring brings over 50 years of industry expertise to the table. This makes it an ideal partner for both newcomers and seasoned veterans in the trucking industry looking to enhance their cash flow.
However, feedback on TBS Factoring’s customer service is varied. While some carriers commend their account managers for being well-informed and helpful, others have voiced concerns over sporadic communication and issues related to the clarity and ease of understanding contracts.
Riviera Finance offers its services to small and medium-sized trucking businesses, featuring flat-rate pricing, tailored collection services, and a client portal for complete access to account details. Partnering with Riviera Finance for your factoring needs can smooth out your cash flow and provide insights into the intricacies of the factoring process.
Despite these offerings, Riviera Finance is perceived to lag in technological advancements according to customer feedback. The absence of a sophisticated mobile application, a fuel card program, and complimentary around-the-clock broker checks mark areas where Riviera falls short. Additionally, some clients have highlighted variability in the quality of service received.
8. eCapital
eCapital distinguishes itself by providing immediate funding on new invoices and a unique revolving line of credit in collaboration with Visa, ensuring instant access to funds for its clients. They support this with comprehensive back-office assistance available even on weekends and an intuitive onboarding process designed to familiarize new clients with their platform. To further ease the decision-making process, eCapital offers a 90-day trial period for new clients to experience their services firsthand.
Additionally, eCapital offers a fuel card that delivers significant savings at the pump, providing a discount of 12 cents per gallon off the cash price at over 16,000 locations nationwide. This, combined with straightforward qualification criteria suitable for fleets of any size and credit terms on purchases, positions eCapital as a cost-saving ally for carriers.
However, some TrustPilot reviewers have reported dissatisfaction with customer service and communication issues with account managers.
9. Truckstop
While Truckstop caters to both large, established carriers and smaller operations, its freight factoring services are particularly advantageous for newer companies or those with small fleets. With flat-rate factoring that doesn’t require a minimum monthly volume, Truckstop presents a welcoming platform for emerging and smaller carriers. The addition of a mobile app, complimentary broker checks, and TMS (transportation management system) integrations further simplifies the process for clients to leverage Truckstop’s full suite of services.
Truckstop has a strong reputation on TrustPilot; however, it’s worth noting that the majority of these accolades focus on Truckstop’s load board services, offering limited direct feedback on the specifics of their factoring solutions.
Orange Commercial Credit tailors its factoring services more towards the needs of larger fleets. They provide flat-rate factoring without any minimum volume requirements, ensure fee transparency, offer an easy process for invoice submission, and assign a dedicated account executive to each client.
Plus, Orange Commercial Credit collaborates with a fuel card provider to afford carriers savings on assorted costs, although the network covers a modest number of stations, just shy of 2,000. The Orange Commercial Credit website may not provide as comprehensive information as those of other factoring companies, leading some customers to face challenges in fully grasping the breadth of services they provide during their decision-making process.
OTR factoring: Leading the pack
There are plenty of options to choose from when factoring, but at DAT, we believe OTR offers the most with the highest quality solutions. When you partner with OTR Solutions, you’ll get paid fast and have access to both recourse and non-recourse factoring programs. You’ll experience competitive rates and experience incredible customer service—all without any hidden fees or restrictive contracts. Plus, since we’ve partnered with OTR Solutions, you can see which brokers are pre-approved right in the DAT load board.
Why Work with OTR
When considering accounts receivable factoring partners, OTR Solutions emerges as the premier choice for carriers in the logistics and freight industry. With a steadfast commitment to excellence and innovation, OTR Solutions goes above and beyond to meet the unique needs of carriers, offering unparalleled benefits that set them apart from the competition.
True Non-Recourse Factoring: OTR Solutions is the only provider in the industry to offer True Non-Recourse factoring, providing carriers with an added layer of financial security and peace of mind. With this program, carriers are shielded from the risk of bad debt, ensuring that they receive payment for their invoices regardless of their clients’ ability to pay.
Instant Funding with BOLT: In an industry where time is of the essence, OTR Solutions delivers with its revolutionary BOLT Instant Funding feature. Carriers no longer need to wait weeks or even days to access their funds; with OTR Solutions, invoices can be converted into cash in mere minutes, empowering carriers to keep their operations running smoothly without interruption.
Transparent Pricing and No Hidden Fees: OTR Solutions believes in transparency and honesty in its business dealings. With straightforward, competitive rates and no hidden fees or monthly volume minimums, carriers can trust that they are getting the best value for their money with OTR Solutions.
Exceptional Customer Service: At OTR Solutions, customer satisfaction is paramount. With a dedicated team of industry experts ready to assist at every step of the way, carriers can rest assured that they will receive top-notch support and guidance whenever they need it.
Integration with DAT Load Board: As a partner of DAT, OTR Solutions seamlessly integrates with the industry-leading DAT load board, allowing carriers to easily identify pre-approved brokers and streamline their factoring process for maximum efficiency.
Want to hear directly from satisfied customers? Take a moment to check out this video on why OTR Solutions is a top choice among carriers of all sizes.
Partner with OTR Solutions for streamlined cash flow management
When you partner with OTR Solutions, you can say hello to transparent pricing and same-day invoice processing and goodbye to payment delays and hidden free frustrations!
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