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800 372 6405

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Understanding the Difference Between Factoring and QuickPay In the highly competitive supply chain market, innovation and competitive advantage are crucial. This has led to the emergence of convenient payment solutions for carriers, such as QuickPay. With high operational costs like fuel, driver payments, maintenance, and equipment rentals, carriers have long sought faster payment solutions, making factoring services almost essential. The question is not whether carriers will seek faster payments, but which option they will choose. Let’s compare the pros and cons of each: QuickPay: Advantages and Disadvantages QuickPay is a service that allows carriers to receive payments from brokers within 3 to 5 business days, typically for a fee of around 3% of the total load rate. Advantages: Faster Payments: Carriers receive payments much sooner than the usual 30, 60, or 90-day terms. Simplicity: The process is straightforward and involves direct payment from the brokers. Disadvantages: Limited Availability: Only a select number of brokerages offer QuickPay, which can limit carriers' scalability and growth. Restricted Earnings: Carriers may miss out on loads brokered by companies that do not offer QuickPay. Responsibility for Invoicing and Collections: Carriers are still responsible for invoicing and collecting payments. Potentially Higher Costs: QuickPay fees can sometimes be higher than factoring fees, offering only faster payments without additional benefits. Factoring: Advantages and Disadvantages Factoring involves selling accounts receivable (invoices) to a factoring company, which advances a percentage of the invoice value and handles the administrative tasks. Advantages: Immediate Payments: Carriers receive payments within 24 hours of submitting their invoices. Administrative Support: Factoring companies handle invoicing and collections, reducing administrative burdens on carriers. Additional Benefits: Factoring companies often provide discounts on fuel cards, working capital loans, credit protection through broker verification, and scalability options. Disadvantages: Cost: Factoring fees can include discount fees, service fees, and other charges, which can add up. Dependency on Factoring Company: Carriers may become reliant on factoring services for cash flow management. Conclusion Both QuickPay and factoring offer carriers solutions for faster payments, enhancing their cash flow and competitive edge. QuickPay is simpler and provides direct payments from brokers but is limited in availability and can come with higher fees. Factoring offers comprehensive support and additional benefits, but involves more complex fee structures and reliance on a third-party service. Choosing between QuickPay and factoring depends on a carrier’s specific needs, the size of their operations, and their preference for simplicity versus comprehensive support.
25 Jul 24

Understanding the Difference Between Factoring and QuickPay

Understanding the Difference Between Factoring and QuickPay In the highly competitive supply chain market, innovation and competitive advantage are crucial. This has led to the emergence of convenient payment solutions for carriers, such as QuickPay. With high operational costs like fuel, driver payments, maintenance, and equipment rentals, carriers have long…
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18 Jul 24

What Is Factoring and It’s Benefits

What is Factoring and How Does it Benefit You? In today’s fast-paced business environment, maintaining a steady cash flow is crucial for the success of your operations. At Source Funding Inc., we understand the challenges that carriers face when it comes to managing finances, especially with the fluctuating costs of…
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Source Funding provides financial support to carriers in the transportation industry. We understand the industry and have over 20 years of experience, which is why our clients put their trust in our hands.

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2111 W Lincoln Hwy Suite 203, Merrillville, IN 46410
(800) 372-6405
info@sourcefunding.us
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