Why Factoring Is a Financial Lifeline for Trucking Side Hustlers

With factoring, the truckers are paid instantly for the work they’ve completed. There is no longer a need to wait weeks to get paid, which allows them to keep money flowing in instantly.

That is a revolutionary shift for side hustlers. It allows them to pay for fuel and repairs while picking up the next load without worrying about cash flow.

Understanding the Trucking Side Hustle Landscape

Weekend and off-hour occupations like hauling loads contribute to the side hustles of numerous truckers. Typically, they own or lease a truck and take on employment that is supplementary to their primary work. This arrangement provides and enables them to be flexible while increasing their earnings on their own terms.

A trucking side hustle is started for a number of reasons. Some seek to generate supplementary income to meet their monthly obligations while others are trying to figure out whether they should make trucking their full-time occupation.

Side hustle in trucking is still not easy. The most notable concerns involve waiting a period of time to be compensated, fuel being paid for out of pocket upfront, as well as truck repairs. This gap in finances can make accomplishing tasks slow very quickly.

What Is Factoring in Trucking?

Truck factoring allows for immediate payment right after completing a haul. Rather than waiting weeks to receive payment, an invoice can be transferred to a factoring company, who will then provide most of the cash upfront.

These arrangements work in two ways. With recourse, you’re on the hook if the broker doesn’t pay. With non-recourse, the trucking factoring company takes the hit, not you. That second option is more secure, particularly when transporting for new clients.

The service does incur an expense of a small percentage, which can be valuable during a cash flow crisis. This model also ensures trucking operations continue without the need to chase payments.

Importance of Factoring for Side Hustlers

No Waiting for Payment

Payment delays can be incredibly frustrating for side hustlers. With factoring, your money is available immediately after the job is finished so you do not have to wait weeks just to buy fuel or take the next load.

Provides Business Continuity

Cash flow is the lifeblood of a side hustle. Thanks to factoring, there’s money for fuel, quick repairs, or other unforeseen expenses tightened within the moment, ensuring your truck is always on the road instead of stuck idling in the yard.

Ways to Substitute Conventional Loans

Loans are slow and full of hoops to jump through. Factoring skips the credit check and gives cash based on work that has already been done. It’s a low-pressure, clean way to keep functioning while avoiding slipping into debt.

Provides Mobility for Side Hustlers

With the evolution of the hustle, factoring evolves alongside it. More loads means more cash in advance, making it easier to add an extra truck or employ a part-time driver without spending from savings.

Key Advantages Over Other Financing

Factoring stands out because it puts cash in your hands fast. You usually get paid within 24 hours of submitting an invoice, which helps keep your truck moving without delays.

It’s also much easier to qualify for a loan. Since it’s not based on your credit and doesn’t create debt, you’re simply getting early payment for work you’ve already finished.

Factoring Process for Trucking Side Hustlers

Starting off with factoring is as basic as it is uncomplicated. After you’re done with a delivery, all you have to do is send the invoice and Bill of Lading to the factoring company for authentication.

Then the factor pays you upfront for the majority of the invoice amount, which is typically 90% to 98% in this case. Afterward, the factor will collect payment from your broker or shipper and later pay you the balance left after their fee has been taken out.

RTS Financial, OTR Capital, and Truckstop Factoring are some of the platforms truckers use for this. The ease these platforms offer is exceptional since payments can be tracked for loads delivered, and fuel discounts can also be managed online.

How to Get Started With Factoring?

When you are getting started with your first factoring, the process is quite simple. Begin by collecting all your unpaid invoices, then do some research and pick a few factoring companies. Compare their fees, contract terms and customer reviews to make an initial decision.

After this step, proceed to fill out a simple application form. Also attach your Bill of Lading. Most companies give a response with approval within 48 hours, which means you can begin accessing the funds almost immediately.

For the initial step you must hold on to a few basic documents. Those include a valid DOT or MC Number, a Bill of Lading, the client’s contact information, as well as your EIN or SSN. A lot of companies also require a CDL license, which means you must be an active operator in order to legally drive.

Conclusion

Factoring resolves the concern of late payments, relieving the burden for trucking side hustlers which allows them to stay on the road. This means that you can receive cash quickly to pay for fuel and repairs without pause.

Weak credit and multitude of paperwork are not an issue, making this easy to start. For anyone looking to run loads on the side, factoring is a useful strategy to foster business growth and keep the hustle moving.

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Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
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Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.