Factoring & Matching Broker Quickpay

As a small business, CASH FLOW is everything, especially when you're just starting out. Carriers can get paid for their loads using three different payment methods. First, and the fastest way to get paid is using a Freight Factoring Company. The second fastest way is to use the Broker's Quickpay (I'll get to this in a moment). The third and last option, the absolute slowest way to get paid, is something called Net 30-Day Payment Terms. This means that the Broker's Accounting Department will pay you 30 days after you deliver a load. There are also Net 60, Net 90 and a Net 120 day payment terms... That's a long time to wait to get paid when you need your cash flow ASAP to help purchase fuel, pay drivers, insurance, etc...

What is Broker Quickpay? This is the second fastest payment option for Carriers and it involves getting paid through the Broker who has given you the load. For example, let's say a Freight Broker has given you a load for $1,000 that's going from Atlanta, GA to Birmingham, AL, and you’re not signed up with a Freight Factoring Company. You can ask that Broker that's giving you the load, "Hey, can you guys pay me on this load with Quickpay?" and the Broker will probably reply, "Heck yeah, we can get you paid out on this load with our in-house payment system, A.K.A. our Broker Quickpay. It's 4%." When you deliver the load, your send that Broker a picture of the signed Rate Confirmation (the Invoice for $1,000) and a picture of the BOL and the POD. The Broker will then need your Banking Information. They will probably have a form for you to fill out to list your Banking info (Account # and Routing #). Then they will process the load and you will get a deposit for $970 into your Bank Account within 48 hours (2 days after the delivery). This is how Broker Quickpay works. 

Now, how do you leverage the Brokers Quickpay to save more money with your Factoring Company? Let's say you take a load from C.H. Robinson and it's identical to the last one: $1,000 from Atlanta to Birmingham. But C.H. Robinson's Quickpay costs 1%. So, when you're booking the load you need to ask the Broker, "Hey, please send me your Broker Quickpay form please because I want you guys to pay me on this load with your in-house Quickpay." But, you have no intention of using that Quickpay. You just want the form to compare what they are charging for invoice processing. Now on that Quickpay form, you can see in writing that it says Quickpay 1% C.H. Robinson. That's the piece of the puzzle you need.

So, you're now going to email the Rate Con, BOL and POD and the C.H. Robinson Quickpay 1% form over to your Factoring Company and politely ask them ... "Hey I know I've signed up with you for Freight Factoring at 4% but C.H. Robinson is charging only 1% if I use their in-house Quickpay. They're a really big Broker and I plan on doing a lot of loads with them. Can you, as my Freight Factor, please match all my loads that I specifically do with C.H. Robinson going forward at 1%?" This is what is called setting up Broker Quickpay Matching with a Factoring Company.

You need to understand that a Broker’s primary revenue stream A.K.A. their business model is making margin on loads, not invoice processing (A.K.A. Factoring). The Broker is getting a load from Walmart that's $1,100 from Atlanta to Birmingham and selling that load to a Carrier at $1,000. So the Broker just made $100 bucks. C.H. Robinson, T.Q.L, J. B. Hunt, NTG etc., this is their business model, to make a margin while flipping loads. The Freight Factors business model is 100% to process loads and pay Carriers ASAP and wait 30 days to be paid by the Broker so the Carrier doesn't have to. This is their business model (Payment Processing For Loads). So, if you phrase your request to your Factoring Company just like I typed it out above... they want that business whether it's 1% or 4%. You're not going to know unless you ask. You could be saving about $2,000–3,000 extra a year if you politely, kindly, and professionally ask your Freight Factor if they can set up Broker Quickpay Matching.