Freight factoring can be a confusing topic, especially when you’ve got a business to run and don’t have time to dive into the nitty gritty. It doesn’t help that several terms are often used interchangeably but can have different meanings depending on the context.

Freight factoring is essentially an easy way for freight brokers to get access to short-term funding by selling uncollected invoices to a factoring company. This helps brokers cover costs between the time they deliver goods to the customer and receive payment for that shipment. With invoices often being paid 60-90 days after they’re sent, factoring can be a godsend to brokers that need cash immediately to pay their drivers or cover operating expenses.

Freight broker factoring is an easy way for brokers to collect cash upfront for all of their invoices, without waiting for 30, 60, or even 90 days for their customers to pay their invoices. This allows freight brokers to quickly and easily pay their carriers using OLxPay, and gives brokerages far more flexibility and reliability in their finances.

If you’re trying to grow your brokerage, freight factoring can give you access to the working capital you need to succeed in a competitive environment. Freight factoring does have a cost associated with it, which is taken out of the final payment on your invoices.

Contactors

Wholesale

Food and Beverage

Manufacturing

Transportation and Logistics

Agriculture and Produce (PACA)

Oil and Gas

Invoice factoring is used by a wide variety of industries, but it is most commonly used by small and medium-sized businesses (SMBs). SMBs often have difficulty qualifying for traditional bank loans and lines of credit, and invoice factoring can provide them with a quick and easy way to access the cash they need to operate and grow their businesses.

1. First, your freight carrier delivers their load for the customer, obtains a signature, and sends the broker their invoice along with proof of delivery.

2. Next, the broker sends those documents, along with the shipper rate confirmation for the load to the factoring company.

3. Your factor will pay you an advance on this invoice - usually up to 90% of the invoice value upfront - allowing you to pay your carriers without floating the expense.

4. After the invoice has been collected by your Factor, they’ll pay the remainder of the invoice minus the factoring fee.

No. OLxHub operates behind the scenes, handling invoicing and payments while you stay in full control of your relationships with brokers, shippers and transporters.

Managing Seasonal Fluctuations

If your business experiences slow seasons, factoring can ensure consistent cash flow to cover expenses and maintain operations.

Fueling Rapid Growth

If your business experiences slow seasons, factoring can ensure consistent cash flow to cover expenses and maintain operations.

Dealing with Slow-Paying Customers

If long payment cycles strain your cash flow, factoring eliminates those delays, providing financial stability.

Improved cash flow: By converting accounts receivable into immediate cash, freight factoring provides trucking companies with a reliable and consistent cash flow. This financial stability allows businesses to meet their operational expenses promptly, invest in growth opportunities, and avoid cash flow gaps that may hinder day-to-day operations.

Reduced administrative burden: Freight factoring eliminates the need for trucking companies to manage collections, invoicing, and credit worthiness. The factoring company handles these tasks, freeing up valuable time and resources for the business to focus on core operations.

Flexible funding: Freight factoring provides flexible funding that grows with the business. As the trucking company takes on more clients and generates more invoices, the factoring line can be adjusted to accommodate increased funding needs. Additionally, companies don’t have to factor all their invoices. Many companies only factor the invoices they need to cover short-term expenses.

Accessible financing: Freight factoring is relatively easier to obtain compared to traditional bank loans (Factoring vs. Bank Loans). Factoring companies primarily consider the creditworthiness of the customer rather than the trucking company’s credit history. This makes it an attractive option for businesses with limited credit or a short operating history.

One of the many benefits of being an OLxHub client is that we make it easy for you to stay updated on the status of your factored invoices. We provide a user-friendly online account system that features a wide variety of reporting and informational tools. We want to make it easy for our clients to be completely informed about their customers and invoices.

Easy Invoice Submission with OLxHub

Submitting invoices is hassle-free with OLxHub. Use our online portal or OLxHub™ App to send your rate sheets, bill of lading (BOL), and other paperwork instantly. Our team processes your invoices quickly, so you can get paid fast.

Funding Options – Get Paid Even Faster

Get paid how you want. We offer flexible funding options via OLxPay™ (our digital payment system), Automated Clearing House (ACH), wire, Digital payments, or directly to your OLxHub fuel card.

Can OLxHub integrate with my current systems?

Yes! OLxHub integrates with multiple Transportation Management Systems (TMS) and other tools, allowing you to streamline job data entry, reduce errors, and save time. Your freight tech perfectly in sync

When you work with OLxHub, our expert team will learn about your company’s needs, explaining our services and processes to design a custom factoring plan for you. We offer both recourse and non-recourse factoring options, 24/7 access to your funds, online account management, back-office support, free mobile apps, and industry-leading fuel cards.

We will buy freight invoices from all your customers including brokers, shippers, and freight forwarders. We can factor invoices for most kinds of freight.