What's the Different Between Freight Factoring and Quick Pays?
Updated: Mar 16, 2020
Consistent cash flow is a must for a career in trucking. Not many people can wait the 30 to 90 days it normally takes a shipper or broker to pay for a load you haul. This is where freight factoring and quick pays comes in. They both speed up the cash flow process by providing faster payments to carriers so that you can keep the operations of your trucking business in order and avoid missing any payments. But there are a few big differences.
So what's the difference between freight factoring and quick pays?
There are different invoicing methods, logins, accounts, and paperwork for each broker you use quick pays with.
Brokers don't tend to be helpful beyond them securing the signed BOL so that they can receive payment. They consider you responsible for everything else.
Not all brokers offer quick pays. This could cause problems if you rely on them and have to turn down a higher paying load because that broker doesn't offer quick pays.
Brokers rarely offer additional services to assist you and your business.
Each broker's quick pay is specific to their company and can be different for every load.
You can only factor with one company at a time. All your load information is sent to one place, you'll have one login, and your bank deposit information is securely stored for each funding for every invoice.
Factoring companies provide you with back-office support through services such as billing and invoice creation, accounts receivable and collections management, customer credit checks, fuel card distribution, and more. You'll also work with an account representative who handles your brokers and shippers.
You can work with any broker or shipper when factoring your bills, regardless of if they offer quick pays or not.
Many factoring companies offer additional services to their clients like freight finding, fuel cards, insurance and compliance help.
A factor's rates vary depending on who you work with, the size of your company, and your monthly revenue.
Both options are great to getting you paid fast. Your decision will come down to your current business status, if you want the extra benefits that come with factoring, or if you don't mind only working with shippers and brokers that offer quick pays.
For more information on the difference between freight factoring and quick pays, and which one would be the best fit for your business, download our FREE guide now!