We’ve touched on a few of the benefits of factoring for a trucking company, but let’s break these down in more detail. It’s not unusual for drivers to feel a little reluctant to part with a portion of their profits, and this is a necessary fact of working with a factoring service for the trucking industry. However, the small amount of lost profit can actually lead to serious advantages for businesses and drivers and can even see you increasing your profits over the long term.

• Swift capital upfront

There can often be a lag between taking on a job and then getting paid for it. While this is not always a problem — for example, while business is good and while company revenue is high — it can cause serious disadvantages for drivers in leaner times. It’s also not fair, as the truck driver has held up their end of the deal and has still not been paid.

With factoring, there is no such concern. Money is paid upfront by the third-party freight factoring or trucking factoring company, and the truck driver receives their capital up swiftly and without delay.

• A more reliable source of revenue

Forecasting and projecting for the future can be difficult for truck drivers. Even when orders are coming in, it is likely that many of the payments on these orders will be delayed, meaning that drivers cannot predict precisely when they will receive the money that is owed to them. This is a major issue, particularly when it comes to securing loans or investment for business growth projects. To put it simply, a lack of reliability makes it hard for truck drivers and owner-operators to grow their business in the way they’d like.

With a truck factoring service, this uncertainty is removed. When taking on factored orders and jobs, drivers are securing a reliable stream of income. They can then use this reliable income stream to prove their annual revenue, which makes it easier to attract investors, qualify for loans, and expand the scope and capability of the business.

• Better flexibility solutions in terms of income

Some drivers may not like the idea of accepting a factored order. After all, when accepting this kind of order, the driver can only expect to receive around 80% or 90% of the total cost of the order, which may seem unfair as it is the driver who is doing the actual driving. However, the idea of factoring services for a trucking company or driver is that they accept this discounted rate so that they can connect with a more reliable payment.

This gives you flexibility as a truck driver or owner-operator. You can accept factored orders that provide you with a baseline of income — a regular stream of revenue that you can put your faith in. Then, you can enhance this revenue by taking on other orders at full payment. As your situation changes and you become more or less risk-averse, you may decide to shift the ratio one way or another — the choice is yours, thanks to this increased flexibility.

• Reduced risk as a better service

An unreliable payment schedule is one thing, but the risk of not getting paid at all is an even more serious concern for truck drivers. Disputes with clients, unscrupulous customers, and a whole host of other factors can contribute to the risk of non-payment. For small trucking businesses or for truck driver owner-operators, this can be catastrophic. Too many businesses have run into serious trouble because they cannot secure the payments they are entitled to.

This is obviously a major benefit for truck drivers. With a truck factoring service, the risk of non-payment is taken on by someone else. You do not need to worry about receiving the money due to you, and you can focus on other — more positive — aspects of running your business.