1st Commercial Credit, LLC. Introduces Freight Broker Non-Recourse Factoring

NCC’s program provides comprehensive credit protection against shipper insolvency and ensures payments to carriers for all factored invoices

1st Commercial Credit, LLC, in collaboration with its affiliate Nationwide Commercial Credit, Inc. (NCC), is proud to introduce a specialized Freight Broker Non-Recourse Factoring Program. This program is designed to improve cash flow and ensure prompt payments to carriers, providing a valuable financial solution with credit protection for the freight brokerage industry.

Ensuring Financial Stability for Freight Brokers

NCC’s program provides comprehensive credit protection against shipper insolvency and ensures payments to carriers for all factored invoices. This protection is crucial for freight brokers to safeguard against potential losses from shippers declaring bankruptcy or failing to pay. By maintaining payables to carriers within 30 days and meeting industry trade credit ratings, freight brokers can sustain their financial health and operational efficiency.

Enhancing Credibility and Growth

Freight brokers must demonstrate a consistent ability to pay invoices on time to gain approval from carriers and factoring companies. NCC supports brokers in building a reliable payment history, which is vital for establishing trust and fostering strong business relationships. With NCC’s factoring facility, brokers can confidently onboard new shippers, driving business growth and credibility in the market.

Streamlined Digital Uploading for Efficient Transactions

NCC offers a digital uploading system that simplifies the funding request process. Freight brokers can submit detailed information about carriers, including payment instructions and terms, along with the shipper’s invoice and relevant documents. Once the shipper acknowledges the payable, NCC provides payment to the carrier, facilitating smooth and efficient transactions.

Eligibility Criteria for Non-Recourse Factoring

To qualify for NCC’s non-recourse factoring program, freight brokers must meet the following requirements: (No-Startups with Sales Under $50,000 a Month)

• Strong Creditworthy Shippers: Shippers must have robust credit ratings and credit insurable.
  
• Established Business History: Brokers should have a consistent operational history of at least six months using a Transportation Management System.
  
• Clear Documentation: Complete documentation for each load is required along with the invoice to shipper.
  
• Reasonable Payment Terms: Invoices to shippers should have payment terms within industry standards (30-60 days).
  
• Minimum Volume Requirements: A minimum of $50,000 monthly is required.
• Absence of Disputes: Invoices to shippers must be free of disputes or offsets.
  
• Compliance with Legal Requirements: Brokers must adhere to all relevant legal and regulatory standards.
  
• Financial Stability: Brokers are required to demonstrate financial stability, including positive equity on their balance sheet and positive cash flow. Additionally, they must maintain a cash reserve in their bank account of at least 15% of the receivable value.

Overcoming Common Challenges in Freight Brokerage

Raul Esqueda, President of Nationwide Commercial Credit, explains, “Factoring freight brokers can be challenging for many factoring companies due to the complexities involved in managing receivable and payable liabilities to carriers. Freight brokers must also maintain profitability and positive cash flow. Recent liquidations and bankruptcies among freight brokers were often the result of overleveraged debt and daily expenses surpassing revenue.”

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