Factorin

FOR TRANSPORT COMPANIES

What is Factoring?

Factoring is the purchase and sale of rights to future receivables arising from the delivery (sale) of goods or the provision of services with deferred payment, as well as assuming the risk of collecting these receivables.

How does factoring work for Transport companies?

– A transport company provides its services to clients or customers and generates invoices for the services rendered.
– The shipping company submits the invoices to VerdeTax, along with any supporting documentation, such as proof of delivery or signed bills of lading.
– The VerdeTax partner verifies the authenticity and validity of the submitted invoices and assesses the creditworthiness of the transport company’s customers.
– Once the invoices are approved, the VerdeTax partner provides an advance payment to the shipping company.
– The exact rate depends on various factors, including the customers’ creditworthiness and the terms of the contract.
– The VedreTax partner takes responsibility for collecting payments from the transport company’s customers.

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Benefits of Factoring for Transport companies

Factoring for a shipping company refers to the process of selling receivables or invoices to a third party financial institution, known as a factor, in exchange for immediate cash.

Here are some key aspects of factoring for shipping companies:

Improving cash flow:

Factoring allows shipping companies to have quick access to cash by converting their unpaid invoices into immediate funds.

Working capital management:

By receiving immediate cash from the factor, shipping companies can effectively manage their working capital.

Receivables Management:

When a shipping company factors its invoices, the factor assumes the responsibility of collecting payments from customers.

Flexible financing option:

Factoring offers flexibility to shipping companies because the amount of financing available is directly related to their sales volume. As the company grows and generates more invoices, the financing provided by the factor can be increased to meet the changing needs of the business.

Fast and streamlined process:

Factoring is usually a faster and easier financing option than traditional loans or lines of credit. The approval process focuses primarily on the creditworthiness of the trucking company’s customers, allowing for faster disbursal of funds.

Factoring offers trucking companies a means to improve their cash flow, manage working capital, mitigate credit risks and support growth and expansion plans. It provides a flexible and affordable financing solution that meets the specific needs and challenges faced by the transportation industry.