3 Ways You Save Money with Denim’s Flexible Factoring Rates

Factoring and saving money might not seem like they go hand in hand at first glance. 

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Many in the trucking industry view factoring companies as just another middleman taking a cut of their hard-earned margins. However, at Denim, we believe that factoring can be a powerful financial tool when tailored to your unique business needs.

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We understand that every freight broker and fleet has distinct financial requirements. To address these needs, we’ve developed flexible factoring rates that provide unparalleled control over your costs. Our approach ensures that you can maintain healthy cash flow without compromising your bottom line.

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Let’s explore what factoring rates are, how they're determined, and how Denim's innovative factoring for freight brokerages and fleets can benefit your business.

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What Are Factoring Rates?

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Factoring rates are fees charged by factoring companies to advance money against your invoices. This financial service helps businesses maintain cash flow without waiting for customer payments. The factoring rate typically represents a percentage of the invoice value and varies depending on several factors.

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How Are Factoring Rates Determined?

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Factoring rates are influenced by:

• The creditworthiness of your customers
• The volume of invoices you factor
• The industry in which you operate
• Payment terms (ex: Net 30, Net 60)

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Traditional factoring rates can be rigid, often not reflecting the nuances of your business needs. That's where Denim's flexible factoring rates come in.

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3 Ways Denim Saves You Money With Flexible Factoring Rates

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Traditional factoring rates offer a one-size-fits-all approach. Denim, however, provides flexibility, allowing you to tailor your factoring rates to your business model. Here are 4 ways we do that:

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1. Selective Factoring

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Selective factoring allows you to factor only the invoices you choose, giving you the power to manage costs effectively. This approach is perfect for businesses that don't need to factor every invoice and want to optimize their cash flow strategically.

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• Factor Only What You Need: With selective factoring, you decide which invoices to factor. This means you can choose to factor larger invoices or those from customers who take longer to pay, maximizing your cash flow benefits.
• Strategically Manage Your Finances: By factoring only selected invoices, you can better manage your finances. This strategy allows you to maintain a steady cash flow without over-relying on factoring services, ultimately saving on fees.
• Have More Flexibility and Control: Selective factoring gives you greater control over your finances. You’re not locked into a contract that requires you to factor all invoices, giving you the freedom to adjust your factoring needs as your business evolves.

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Yeti Logistics saved $20,000 annually on factoring fees by factoring only what he needed. Learn how this helped Yeti’s strategic growth. 

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3. Flex Factoring

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Flex Factoring offers even more control by providing prorated discounts for delaying advances (both your own advances and advances to contractors).

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• Delay Advances, Save More: You can push out advances up to 30 days, receiving up to a 66% discount. This flexibility allows you to plan out your cash flow needs and reduce costs for times when you don’t need immediate access to funds.
• Enhanced Flexibility: Use our Flex Factoring Calculator to see how much you can save with Flex Factoring. This tool can help you actively manage your rates, optimize your cash flow, and reduce costs.
• Enhanced Financial Planning: By strategically delaying advances, you can align your cash flow with your financial goals. This approach helps in budgeting and forecasting, providing a clearer picture of your brokerage’s financial health.

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4. No Fees for QuickPay

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Denim doesn’t charge brokers a fee for QuickPay. Because of this, brokers can choose to charge a fee to their carriers, creating an additional income stream.

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• Cost Savings for Brokers: With no QuickPay fees, brokers save money that can be reinvested into their business. Our brokers appreciate the fact that with Denim, there’s no hidden fees or added costs.
• Revenue Opportunity: Brokers can opt to charge a QuickPay fee to their carriers, turning a service into an additional revenue stream.
• Improved Carrier Relationships: Offering QuickPay without an additional fee can improve your relationships with carriers, helping to grow your brokerage. We’ve helped countless brokers cement their carrier relationships.

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River City Logistics leveraged Denim’s quickpay options to maintain their carrier relationships when they transitioned from an agency to an independent brokerage. Learn more about how QuickPay shaped their brokerage. 

Examples of Saving Money With Denim

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Every brokerage is different and our sales team will be happy to walk you through exactly how much money you could save when you factor with Denim. 

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Here are a few examples of what our flexible factoring might look like:

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Example #1

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You're working with a carrier or fleet that factors their invoices, so you don't need to QuickPay. By delaying your carrier payment for 20 days, you receive a discounted rate based on the value of the invoice, ultimately lowering your costs. This approach helps you maintain cash flow while benefiting from reduced factoring fees, ultimately improving your bottom line.

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Example #2

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You've taken a last-minute load from an existing customer to strengthen your relationship, but the margin is tight. To reduce costs, you delay your advance for up to 30 days, cutting your rate in half and improving your margin on the load. This strategic delay in advances not only saves you money but also enhances your profit margins, making last-minute loads more financially viable.

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We Make Factoring Flexible

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Denim's flexible factoring rates are designed to provide you with maximum control and savings. With Denim, you can tailor your factoring strategy to meet your unique business needs and enhance your profitability. For more information and to see your potential savings, request a demo of our platform.