Factoring is a transaction involving the sale of a business’s invoices (accounts receivable) to a third party financial company (the factor). The factor pays the business the value of the invoice (less a fee for collection risk) immediately, allowing the business to receive cash much faster than waiting for a customer to pay which can often take 90-120 days. Factoring can benefit your business by providing you with cash flow to operate and grow your business without having to wait to be paid. Freight factoring can save you time, simplify book keeping and take the burden of bill collection out of your hands.
When a factor purchases an invoice on a non-recourse basis, the factor assumes all the credit risk. If for some reason an account debtor fails to pay the invoice, the factor will take the loss and the client is not liable. The fee for factoring a non-recourse invoice will be greater than a recourse agreement due to the factor assuming the risk. For an invoice purchased under a recourse agreement, the client is responsible if/when the debtor does not pay the invoice. The client must buy back receivables the factor cannot collect. Recourse agreement fees are less costly than non-recourse deals. OpenRoad Financial Services is a strictly recourse factor.
Pricing varies by carrier volume, debtor quality, and business specific needs. All variables are clearly discussed up front so you know exactly what the cost is before we finalize the factoring agreement.
We will wire the cash to your account same day if your invoice is received before 9:30 am (PST). If the invoice is sent in after 9:30 am, we will ACH the money to your bank account to be received the next day.
No, factoring is not a loan. No debt is assumed when factoring as you are selling accounts receivable for cash.
Bad credit or no credit at all will not make you ineligible to factor with us. Since we’ll be buying the invoice from you and collecting payment from your clients, the creditworthiness of your clients will determine your eligibility.
Getting started is as simple as filling out and submitting our application form. There is no cost and accounts are activated as quickly as you get the required paperwork to us. Let us help you maximize your cash flow instead of spending costly time waiting for your customers to pay you. Try us out today!