Why You should Consider Working with a Smaller Factoring Company Rather than a Bigger One
Jun 21, 2019 / Posted in Uncategorized
It’s not always easy for anyone running a trucking operation to maintain enough of a profit margin to expand operations or be prepared for lapses in cash flow while waiting on payments for loads. This is what makes freight factoring an appealing and budget-pleasing option for trucking professionals. But not all freight bill factoring companies are created equal. And while you may be tempted to go with a bigger company that offers a lot of bells and whistles and promises, there’s something to be said for working with a smaller factoring company instead.
No Unrealistic or Vague Promises
Some bigger factoring companies make vague claims or rely heavily on a bunch of promises that have a lot of fine print attached to them. Smaller companies, on the other hand, are more likely to focus on the details that matter most to trucking entrepreneurs and owner-operators, such as:
- Where they stand when it comes to flat rate vs variable rates – there’s no “right” or “wrong” side, but smaller companies tend to be upfront about their rates and related terms
- Unique features that can make it easier to benefit from factoring – e.g., a notice period that’s more reasonable
- A higher quality level of service
Fair and Reasonable Contract Terms
Some bigger factoring companies have minimum factoring volumes or contract lengths that may not work well for your level of operations. In some instances, you may even run into bad freight factoring contracts with terms that are actually making it more difficult for you to manage things on your end, especially with your own customers.
With smaller companies, there tends to be more of a willingness to offer fair and reasonable contract terms. A smaller company is also less likely to use tactics such as misleading “teaser rates” padded with additional contract fees that could really affect your bottom line by cutting into your profits.
Personalized, Customer-Focused Service
When you first start searching for a freight bill factoring company, you’ll likely consider things like the length of contract required, recourse vs non-recourse factoring services, and eligibility requirements. But there’s also something to be said for having access to any assistance you may need without having to jump through hoops to reach an actual person.
Smaller companies, by nature, have a smaller customer base. So, you’ll be more likely to get a helping hand with due diligence and other steps involved with the factoring process. Personalized service with a smaller factoring company may also include:
- Having the same contact person for the duration of your relationship
- Additional benefits like fuel advances
- Access to resources you can use to grow your trucking business
If you do opt to go with a smaller company, it’s still important to look at freight factoring company reviews to get a better idea of what you can expect before you make a commitment. Take further comfort in knowing most reputable smaller factoring companies are upfront about their pricing and more than willing to answer your questions and explain their policies and procedures. Please take a moment to explore how Pay4freight can be of service to you.