With the rapid growth of the overall economy, the number of factoring companies has phenomenally increased in the recent times. Such companies of higher reputation and size offer various factoring products. When it comes to truck operators to use the concept of invoice factoring for these companies, the selection of the right factoring company looks to be a daunting task, especially for the small truck or freight operators.
Amidst the stiff competition, reputed factoring firms like EZ Freight provide competitive truck factoring solutions to all types of suppliers and manufacturers. In order to understand in a better way about the importance of freight mobility in a growing economy, one can browse the website http://nca2014.globalchange.gov/report/sectors/transportation. Such a read will enable the readers as well as the concerned truck operating small business owners to feel the operating challenges in front of them.
What is a Factoring company?
Since the art of factoring has witnessed a high growth in the freight industry, innumerable factoring companies have emerged in all parts of the word. In general, these factoring companies (also called as factors) have been divided into two main categories, namely bank owned factors and independent private factors. The former ones are generally popular household or industry names that anyone can recognize. On the other hand, there are many large sized independent factoring firms which also thrive in bigger cities as well as in smaller towns. Also, a lower-end factor operates with a handful of employees serving few hundred clients. This mix up complicates the selection process for the service takers or end users while moving their products across the country.
Selection of a factor
As categorized above factors from each segment has advantages as well as disadvantages. Read to find a summary of key considerations while choosing these factors from all the said categories.
Bank Owned Factors: Being substantial organizations of high repute, their clients get the best benefits in terms of financial security. The chances of liquidity never happen in this category of factors. However, many times these large corporate factors may not able to deliver the expected service to the customers. Such failure results in poor customer retention as the frustrated clients switch over to other factors of other categories.
Independent and private factors: These factors are fuelled by the skilled professionals from the industry. Noted and well-known business owners operate this type of category of factors. Hence customers always consider the ownership of these factors and accordingly give their business. Here, the entire ownership rests on a single individual and hence such factors always carry some element risk in the overall operations.
Freelance small factors: As said earlier, this unorganized category operates in restricted areas and run by semi-skilled operators. Though these factors extend better customer relationship, the aspect of financial security is always doubtful with these small factoring firms.
When it comes to the selection of the factoring firms, it is the size of their clients really matters. It is always suggested to verify these factors from the clients who have availed their services. Also, the exact needs of the clients determine the right selection apart from the factor called ‘trust’.