In the trucking industry, there can be long delays in getting paid. There are various situations where waiting too long can cause financial harm. In his Youtube video, David McGill a.k.a. Trucking From Scratch will demonstrate the benefits of working with commercial factoring companies, and how they can allow you to get paid faster.
Normally, after a load has been delivered on time, the trucking company bills the broker for payment.
This process can take a few months for that money to come in. Employees at the trucking company may need that money way sooner. Thankfully, that’s where commercial factoring companies can help.
Say, for example, the load costs $40,000 to deliver. The broker then notifies the trucking company that the invoice won’t be fully processed until another 3 months. With a factoring company, that invoice could be sent to them for a 3% commission, making the payment the trucking company receives around $38,835. Ultimately, less payment is received as opposed to simply waiting it out. However, the payment will be delivered in a mere 24-48 hours in comparison to months on end. The broker then receives the $40,000 invoice from the factoring company.
