TAB Bank Freight Factoring

Within the trucking industry, invoice factoring is widely used to help alleviate the waiting period trucking companies experience after invoicing their customers. In a nutshell, invoice factoring turns invoices into cash and allows trucking companies instant access to money they have already earned, less a small fee. This enables them to put the capital to use to grow their business. A major player in invoice factoring—or freight factoring, as it’s called in the trucking industry specifically—is Transportation Alliance Bank, Inc. also known as TAB Bank. In this review, we’ll do a deep dive on TAB Bank, discussing the pros and cons of working with this lender, their rates, the online tools they provide, and much more, so you can make an informed decision if this popular pick is right for your business.

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9.7

9.7

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Highlights
Highly Rated on Google (4.4 Star Rating)
BBB Rating: A-
Dedicated Relationship Managers
24-hour Funding Time
No Monthly Minimums or hidden fees

About TAB Bank

TAB Bank opened its doors in 1998 and has since provided financial solutions to meet the needs of various customers across a number of industries. It began with over-the-road truckers and others in the transportation industry, but over the years, grew to serve small and medium-sized businesses. Today, the company provides a host of financial services for individuals, families, and businesses nationwide with the mission of enabling flexibility and support in all stages of business or personal financial growth—and through any economic condition.

Pros Cons
Access to cash in as little as 24 hours after approval Small reduction in overall profit per invoice
Streamlined online banking portal and mobile app No invoices over 90 days old or invoices with liens or claims
Competitive factoring rates
Experienced customer service representatives
No personal credit requirement for invoice factoring services
Minimal paperwork required to access credit line against invoices
No additional collateral beyond accounts receivable is required
No hidden fees or charges
No need to manage collections
No long-term agreements

TAB Bank Freight Factoring Key Features

TAB Bank provides invoice factoring to help companies, including those in the trucking industry, achieve their goals. Key features of freight factoring with TAB Bank include:

  • Competitive Rates: TAB Bank offers competitive rates, which allow for quick and easy conversion of outstanding invoices to immediate cash.
  • Quick Funding Available: With TAB Bank, you can access your working capital in as little as 24 hours after your invoices are received and verified.
  • Reliable Services: TAB Bank has the resources and security of a bank with the proven expertise of a commercial lender, which makes invoice factoring a breeze.
  • Dedicated Relationship Managers: Experienced customer service and lending team members provide one-on-one support to make your invoice factoring experience intuitive and hassle-free.
  • User-Friendly Online Portal & Mobile App: Freight factoring with TAB Bank is simple. You can manage your invoices online on their banking portal or via the TAB Bank mobile app.
  • Fuel Cards: TAB Bank offers access to a comprehensive fuel discount program that can help trucking companies manage their fuel costs.

Freight Factoring Uses

Freight factoring is a process in which you submit your invoices to a factoring company, such as TAB Bank, rather than a broker. TAB Bank then pays you a majority of the invoice value right away, typically between 70 and 90 percent. Then, they wait for the customer to pay the original invoice. After the payment is collected, TAB Bank will send you the remaining balance minus a small percentage.

For many businesses in the trucking industry, factoring helps keep the business moving. Businesses may use the funds for any of the following:

  • Leasing or buying new equipment
  • Funding operating expenses
  • Paying taxes and payroll
  • Opening a new location
  • Covering cash flow gaps
  • Hiring new employees
  • Investing in marketing and advertising
  • Managing unexpected business expenses

TAB Bank Freight Factoring Rates and Fees

In the past, companies relied on banks for loans to gain cash, which often came with lots of red tape, headaches and inconveniences. Because of this, freight factoring became a popular and quick way for small businesses to increase cash flow by using unpaid invoices to secure a line of credit from a trusted lender.

With freight factoring, the cost of invoice factoring typically includes a discount rate and various other fees. The discount rate, often between one and five percent of the invoice value, is the primary cost. This rate can vary based on factors such as the creditworthiness of the business’s customers, the industry and the invoice amount.

In addition to the discount rate, factors may charge additional fees for services such as credit checks, late payments and minimum volume requirements. TAB Bank prides itself on having no hidden fees and will communicate all potential fees upfront. As with any agreement, it’s crucial for businesses to carefully review and understand a lender’s fee structure before entering into a factoring agreement.

Benefits of Freight Factoring with TAB Bank

For trucking companies, there are several benefits to freight factoring with TAB Bank.

  1. Improved Cash Flow: Invoices paid to truck companies can often take up to 90 days to process. By entering into a factoring agreement with TAB Bank, a trucking company can get paid for their work within 24 hours. Payments are predictable and reliable.
  2. Peace of Mind: The stress and possibility of not being paid are greatly reduced when you have a trusted service provider like TAB Bank to help collect payments and monitor a customer.
  3. Reduced Workload: Another benefit to freight factoring with TAB Bank is that it reduces the workload of invoice monitoring, following up on calls to customers, and collections, allowing more time for hauling loads and generating more profit.
  4. No Long-Term Contracts: At TAB Bank, companies typically renew their contracts annually or twice a year. With this model, trucking companies will not be locked into a long-term contract.

Qualifications for Freight Factoring with TAB Bank

In order to enter into a factoring agreement, TAB Bank considers the following:

  1. Are Your Invoices Free of Any Liens? Invoices must be free of any existing claims or liens in order for TAB Bank to consider your invoices. This means that no other entity should have a legal right to the payments associated with your invoices, helping to establish trust and a smooth factoring process.
  2. Does Your Business Demonstrate Positive Profit Margins? TAB Bank wants to ensure your business can thrive and maintain operations. Therefore, they look at your business’s profit margins when deciding whether or not to enter into a factoring agreement.
  3. Are Your Customers Reliable? TAB Bank will consider the soundness and payment history of your business’s customers. They look to see if your customers have a history of prompt payments and if they have a good overall reputation. If a customer has significant debt or ongoing legal problems, it could indicate that they may not be able to make the required payments to TAB Bank.

TAB Bank Online Banking Platform and Mobile App 

TAB Bank’s online banking platform and mobile app create a consistent experience between mobile and online banking and gives customers complete control over their interactions. The TAB Bank app is available for download on iOS and Android. This allows trucking companies to manage their invoices and transactions anywhere and at any time, even while on the road.

TAB Bank Customer Service 

Headquartered in Ogden, Utah with an additional office in Plano, Texas, TAB Bank has a team of experienced financial professionals who have dealt with the trucking industry for years and uniquely understand customer needs. They will work with you one-on-one to customize your factoring services and ensure they are tailored to your company.

TAB Bank Customer Service is available Monday through Friday from 6 a.m. to 7 p.m. (Mountain Time) and 9 a.m. to 3 p.m. (Mountain Time) on Saturday. Federal holidays are excluded. To contact a TAB Bank representative, call 1-800-355-3063.

How TAB Bank Stacks Up Against the Competition 

TAB Bank is considered one of the top freight factoring companies, but there are several others in the industry. Here’s how TAB Bank stacks up against its competitors.

TAB Bank vs. OTR Solutions

Both TAB Bank and OTR Solutions offer competitive freight factoring services for the trucking industry. Like TAB Bank, OTR Solutions offers quick funding, without the long-term contracts or hidden fees. Rates are similar for both TAB Bank and OTR Solutions, and each company prides itself on offering exceptional customer service skills. In terms of differences, OTR Solutions seems to offer slightly more comprehensive back-office support than TAB Bank, but both promise to alleviate the administrative stress from their trucking partners.

TAB Bank vs. Phoenix Capital Group 

Both TAB Bank and Phoenix Capital Group offer factoring services. TAB Bank has been providing solutions for the trucking industry for decades and offers key benefits such as competitive rates, quick funding and customer service support. Phoenix Capital Group, on the other hand, offers numerous benefits for both small and large fleets, which include fuel cards, equipment financing and more. When it comes to quick access to cash, TAB Bank wins out, as the company can grant access to working capital in as little as 24 hours.

Bottom Line: Why We Love It 

For more than 25 years, TAB Bank has specialized in offering financial services for the transportation industry. They have a unique pulse of the needs of the trucking industry and offer freight factoring services with competitive rates, quick access to cash, enhanced technology for easy account management, and impressive customer service. As one of the most-trusted freight factoring lenders, TAB Bank is a great choice for trucking companies that wish to have more cash on hand to be able to grow their business and increase overall profits.

TAB Bank FAQs

Yes, TAB Bank specializes in freight factoring and offers tailored solutions for trucking companies and other transportation businesses, allowing them to quickly access working capital.

Here’s how freight factoring with TAB Bank works:

  1. Submit invoices: You submit your outstanding freight invoices to TAB Bank for factoring.
  2. Verification: TAB Bank verifies the invoices and may perform a credit check on the customer.
  3. Advance payment: TAB Bank advances you a percentage of the invoice value, which is typically 80 to 90 percent within 24 hours.
  4. Customer pays: Your customer pays TAB Bank directly for the goods or services provided.
  5. Final payment: Once TAB Bank receives full payment, they release the remaining balance of the invoice to you, minus their factoring fee.

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