A fuel advance is a financing option that many factoring companies offer alongside their freight bill factoring programs. Fuel advances provide funding to cover fuel expenses at the time you pick up a load. This option can be an ideal solution for small and growing trucking companies that need funds to take on more loads and grow.
How do fuel advances work?
A fuel advance can provide factoring clients with up to 40% of the value of your freight bill. This advance can be provided to your company within hours of making the funding request. To send the advance, we need to verify that:
- The load has been booked – usually via a rate confirmation sheet
- The load has been picked up – usually via a bill of lading
Once the load is verified, funds can be sent to your bank account via a direct deposit or can be loaded onto a fuel card.
An additional advance – after delivery
The fuel advance option is actually part of your regular factoring advance, except it’s delivered sooner. When using this option, your company gets an additional advance, up to the amount of your regular factoring advance, as soon as the load has been delivered to your shipper.
Need more information? Learn more about freight bill factoring.
A factoring company with a fuel advance program can benefit small and mid-sized carriers who are low on funds and at risk of cash flow problems. It helps you:
- Grow your business by allowing you to take more loads
- Pay for fuel
- Improve your cash flow
Here is more information on the benefits of fuel factoring.
Things to keep in mind
Keep in mind that factors charge an additional fee (over the factoring fee) for the fuel advance. Make sure that your profit margins are high enough to cover the cost of the services. When used correctly, factoring and fuel advances can be an ideal option to help finance small carriers.
Do you need help paying for fuel?
We are a leading factoring company and can provide you with a competitive fuel advance plan. For information, please get an online quote or call (877) 300 3258 to speak with an expert.