Factoring vs. Direct Pay: How motor carriers get paid
For truckers, using a factoring company can be an efficient way to get paid for their work quickly. Factoring companies provide advanced payment to carriers that are waiting for a payout from the customer. The average waiting period for payment can be anywhere from 30-60 days later, so factoring helps The customer then pays the factoring company instead of the carrier. The catch is that a fee is charged to the carrier, taken out of their gross payment. If you’re willing to pay the fee, it can be a great way to avoid the hassle of waiting for your payments.
But what if there was a way to get paid quickly, and without any fees being taken out?
The direct pay route
With DrayNow, carriers don’t even need to utilize the services of a factoring company. DrayNow offers a direct pay option during the sign up process where the revenue from the load is paid out directly to their bank account within a week after completing it. And it doesn’t cost a dime. On top of the all-in pricing seen on the platform, DrayNow does not take any fees out when carriers choose the direct pay option.
In using the DrayNow platform, you are able to use a factoring company to get paid. But why spend the extra money when we pay out within a week? Let’s say that you complete a load through DrayNow between Sunday and Saturday – which is our pay period. With direct pay, that money would hit your bank account the following Wednesday. Think about that. Completing a load on a Saturday could get you payment in four days, without any fees taken out or a super long waiting period.
But first, upload your documents!
The key to getting paid quickly is to get the bill of lading (BOL), proof of delivery (POD), and any accessorials from the trip uploaded onto the DrayNow app. Having the option to instantly upload all of the necessary trip information already expedites the payment process. There’s no need to scan, email, or mail anything, which could delay payment. The carrier just needs to remember to upload everything right away so that everyone has proof of completion, and payment can occur as soon as possible.
At DrayNow, we are continuing to innovate and simplify the entire process of carriers finding and hauling intermodal freight. Between the direct pay option and instantly uploading documents, carriers can complete loads from the app easily and get paid quickly.
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