Are you looking for factoring for truckers and trucking companies? If so lets explore what options are available for you and what it may cost.
If you are a trucking company in the UK, then you need a commercial finance broker that understands the freight and transport sector.
Factoring can be great solution for trucking companies, helping to pay for fuel costs, vehicle maintenance and also to grow your business.
As is common in the freight transport sector, many contracts require your to wait for 30 or even 60 days before you get paid.
In the meantime you have to keep drivers happy, trucks fuelled and meet the financial standing requirements for your operators licence.
Factoring Companies For Truckers & Trucking
There are a large number of Factoring Companies in the UK, that will provide funding to trucking companies. From High Street Banks to small more specialist providers and other bigger alternative lenders.
Choosing the right one for you will depend on a number of important factors, such as:
- What is the turnover of the business?
- How long have you been trading?
- Do you have a spread of clients or one/two large clients
- Does the company or directors have any bad credit
- Can you integrate directly with the factoring company via your accounting software
- Are you currently in a CVA?
As you can see there are a large number of things that will dictate which is the best factoring company for your trucking business.
Benefits of Factoring For Truckers
By getting instant access to cash for jobs completed, this means improved cash flow to help pay for costs such as:
- Pay Fuel Bills & HGV Maintenance
- Pay Drivers On Time & Hire New Drivers
- Deliver Existing Contracts or Take On New Clients To Grow
- Fund The Purchase of New Vehicles
Also many Factoring providers will provide a credit controls service to help with collections. Then you can concentrate on running your business and keeping vehicles on the road.
The main features of a factoring facility are:
- Release up to 90% of unpaid invoices
- Draw down as soon as invoice is raised
- Revolving credit facility – interest calculated daily
Get in touch using the form below or call 01204 860113.
It is recommend to speak with a independent finance broker such as ourselves to compare your options.
How Factoring Works For Trucking Companies
Once you have set up an Invoice Factoring facility, you can then start to draw down funding with every new invoice raised.
If you are trading with brand new clients, you may need to apply for a credit limit on them before delivering any goods for them.
Once your clients pays up the balance on the facility reduces by that amount, minus any fees and/or interest.
Costs of Factoring For Truckers
The cost of an invoice finance facility will vary significantly between both providers and dependant on your your individual circumstances.
The higher the turnover, generally the lower the cost as a percentage of turnover. Typical factoring fees include:
- Setup/Arrangement Fee
- Service Charge
- Interest/Discount Fee
The service charge usually accounts for the majority of the cost. Some lenders may just charge a single fee incorporating all 3 of the above.
Other Potential Fees:
- Bad Debt Protection (BDP)
- Refactoring Fee
- Credit Note Fee
- Annual Review/Renewal
- Survey Fees
Factoring For Truckers Using Courier Exchange or Haulage Exchange
If you are using either Courier Exchange or Haulage Exchange to complete jobs for clients. Then you may need to use a factoring company that specialises in that are.
Click on the links below to read more about each platform:
- Courier Exchange Invoice Finance & Factoring
- Haulage Exchange Factoring | HX Invoice Finance | UK Freight
Get A Free Factoring Quote Today
Fill in the form below for a no obligation quote, get expert support searching the market for finance.
We do not charge any broker fees for Invoice Factoring applications.