Every owner-operator knows that in order to grow your business, cash flow is needed. You don’t want to turn down loads, but you can not afford to put fuel in your truck for the next load if you aren’t getting paid on the previous load for 30 days or more. Business halts until the check hits your account and the cycle continues. When cash flow becomes an issue, quick pay and factoring should be considered.

Here is what you need to know about the differences between quick pay and factoring:

What is Quick Pay?

Quick Pay is exactly what it sounds like. You get paid, quickly. The broker will pay within 2 to 5 days instead of holding your money for 30+ days. However, each broker has its own terms for quick pay. One broker may charge you 2% and give you your money within 2 days and other brokers may charge a higher rate and might take almost a week to allocate your funds. It also needs to be noted that not every broker offers quick pay which could make choosing a broker difficult.

What is Factoring?

A factoring company will buy your invoices from you at a discount and then advance you your funds within 24-hours. Just like brokers, every factoring company is different and has different rates and fees. But, unlike quick pay, factoring has more benefits than just advancing your money within a few days.

Should I Choose Factoring or Quick Pay?

Besides advancing your funds fast, invoice factoring helps you grow your business with additional benefits that include:

  • Back office support: All the owner-operator is responsible for is submitting the proper paperwork. The factoring company handles all collections and invoicing.
  • Time: Quick Pay can take up to 5 days usually. Factoring, for some companies, allocates funds same-day and max within 24-hours.
  • Fuel Discounts: Most factoring companies offer fuel cards that give you discounts at select fuel stations and fuel advancement options. Choosing to use a fuel card for your trucking company is also one of the best ways to reduce your cost per mile.
  • Client Representatives: Factoring companies offer client portals that you can access 24/7 to view your documents and statuses. Some even give owner-operators their own client rep that can answer any questions they may have.
  • Partnerships: Factoring companies have channel partnerships with insurance companies, compliance companies, dispatchers, and more available to you.

Contact Porter Freight Funding for Truck Factoring

The bottom line is that inadequate cash flow can either hurt your business or you can choose to get funded faster to keep your business running. Quick pay allows companies to get paid within 2 to 5 days, while factoring companies will provide you with funds within 24 hours. Quick pay is a good option if all you need is cash quickly and only use it once in a while. Invoice factoring is a great option if you want consistent cash flow with additional benefits and support to help grow your business.

Contact us online to learn more about how factoring can help grow your trucking business.