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What is truck factoring?

Posted by Genie Wood on Thu, Mar 22, 2012 @ 08:26 AM

Truck factoring involves a trucker's ability to insure their cargo and assign credit risk. The two common types of truck factoring include non-recourse factoring and recourse factoring. 



 


Non-recourse factoring involves a factoring service company taking the credit risk on it's shoulders. This means that the trucker will not be responsible for unpaid cargo loans due to credit problems. This type of factoring is accompanied by higher fees due to the trucker having no risk responsibility. 


 


Recourse factoring shifts the credit risk onto the truck driver, therefore lowering the overall fees paid to the factoring service company. This type of factoring appeals to truck drivers who are confident with taking the credit risk for their cargo. 


 


There are numerous ways that freight factoring can be conducted, and it is important to determine the exact plan beneficial to your situation. To learn more about freight factoring, please contact TBS Factoring by calling 1-800-207-7661 today.