Accounts Receivable Financing For Your Transportation Business
Updated: Nov 24, 2020
Freeing up cash flow is an extremely important step to run a successful business in any industry. It's difficult to run a company when your customers delay payments unexpectedly, so making sure your transportation business has access to enough working capital is a major key to making sure your company runs smoothly. Right now, due to COVID-19, getting paid may be unpredictable as businesses are delaying payments and some are going out of business. However, it doesn't need to be. One way to overcome these uncertain times is through accounts receivable financing, also know as A/R financing or invoice factoring.
What is accounts receivable financing?
Accounts receivable financing is a type of invoicing factoring that allows businesses to access working capital for outstanding invoices. The accounts receivable financing company buys your outstanding invoices and advances you up to 100% of the money upfront, charging you a small fee. The customer will then pay the financing company the full amount for your invoice.
Depending who you work with, fees and pay times will vary. We always pay our clients within 24 hours of them submitting their freight invoices and there are no hidden fees in our contracts: what you see if what you get.
How does accounts receivable financing work?
Accounts receivable financing works as a financing options but is not a business loan. You don't need to pay the money back (unless your customer doesn't pay - you may have to settle that debt with you accounts receivable financing company depending on your agreement). The A/R financing company you work with free's up your transportation business's cash flow from unpaid invoices so that you are able to keep up with your expenses.
You will be able to choose between non-recourse or recourse financing agreements. The fee will be slightly higher for a non-recourse agreement as the A/R financing company incurs all the debt if your customer doesn't pay. Both invoice financing options have collections and billing assistance. The accounts receivable financing company will also credit check all customers to avoid situations where they don't pay. With a recourse agreement, funds are typically held in a reserve account. Our resource agreement provides you with weekly releases of your reserves.
Do you need accounts receivable financing for your transportation business?
Accounts receivable financing is a great solution for both large and small businesses in the transportation industry. Any company that deals with invoices from customers has to sustain the waiting period of getting paid, which is not easy, especially when bills and expenses aren't stopping.
Your business would benefit from accounts receivable financing if:
Your business struggles with consistent cash flow - A/R financing will help you free that cash flow up so you don't need to worry about a shortage of cash
You don't have time to wait for your bank to increase your line of credit - we increase your credit facility immediately
You don't have the money to pay your truck drivers, staff, your truck maintenance, or other expenses while you wait for payments on your invoices - you'll get paid in 24 hours every time you submit invoices
You want to grow your business
Benefits of working with Porter for your accounts receivable financing needs
Accounts receivable factoring companies are a huge benefit to your transportation business. The biggest benefits of working with Porter Billing are:
We can expand your credit facilities up to $15 million
We can increase your credit line immediately
We offer competitive rates
We have flexible terms
We provide managed collections assistance
Additional benefits include:
Fast payments - 24 hour funding on your freight invoices
Up to 100% advance rate (minus our fee)
Contract options - yearly, 6 months, month-to-month
Free credit checks on all customers
Access to pre-approved broker and shipper list
Free fuel card with fuel advances and discounts
Access to our freight database with the best paying freight loads
Expert dispatching assistance
To learn more about how we can help your transportation company grow, give us a call at (205) 397-0934 or apply now!