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Why Would a Company Sell Its Freight Bills
Factoring your receivables can be a great way to improve your cash flow. Why wait to get paid. Use that money now to get back out there are earn even more money. Plus, can save both time and expense as collections and risk falls on the factor - not you.
Business Money Today
Companies sell thier BOL ( bills of ladings) to factoring companies so they can free up cash. Some brokerages, and or shippers will wait and pay the carrier in 30 days, some will wait longer and of course, some won't pay at all. FEMA is famous for this. I arranged transportation for bottles of water during hurricane Katrina from Coca-Cola. The carriers all wanted $4 per mile, I negotiated the rate and set up the loads but FEMA waited forever to actually pay us for the service. We factored the BOL and recieved 90% of the rate so we could continue operations. Common practice in the transportation industry.