If you’re running a small trucking company, or if you are getting everything in order while you’re getting your owner operator authority, you’ll know that keeping your truck on the road is the only way to make money. To do that, you’ve obviously got to keep your fuel tank full. But when your customers or brokers take too long to pay, it can be tough. You may not need a complete truck factoring solution, and that’s where a fuel advance can help.
What is a Fuel Advance?
A fuel advance is simply an advance payment on a freight bill that is given to you after you pick up a load. It provides you with enough immediate cash to fuel your truck so you can make it to the consignee. Many factoring companies offer fuel advances in addition to their normal factoring services. An increasing number of freight brokers and 3PL’s are also offering the service as an additional revenue stream for their business.
How Does it Work?
The process of getting a fuel advance is simple. Upon picking up a load, the factoring company will verify that that you have actually booked and picked up the load in question. This is usually done through reviewing your rate confirmation and bill of lading. Once the information is verified, you’ll receive an advance on the freight bill (usually up to 50%).
How Much Do They Cost?
Getting a fuel advance doesn’t usually cost much for the convenience it offers. If you are factoring your invoices, your freight factoring company may even offer them to you at no extra cost. In the case of a freight broker or 3PL, the cost is usually a small percentage of the entire load pay, or a flat rate such as $20.
If you need more information, we’ve compiled this free list of trucking and freight factoring companies that offer fuel advances as a part of their services.