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What is a Fuel Advance?

There will be times for many start-up trucking companies and independent truckers when they are hard-put to find the cash to pay for the fuel they need to pick up a load. A freight contract usually comes with money upfront, but not always and because most freight factoring companies require an invoice (indicating that the job had been done) before they will pay anything, this can be a major problem. How can they produce an invoice when they can’t get the truck to where it needs to be to do the job? Fortunately, some freight factoring companies such as TBS Factoring understand how it is and offer to these truckers what is called a fuel advance program.

Essentially, the factoring company agrees to pay the trucker a portion of the cash advance (up to 50% in some cases) for a load that they are factoring before the job is done. Typically, the fuel advance is loaded to the fuel card the factoring company subscribes to, or as a direct deposit to the trucker’s bank account if it is a weekday. Cash loaded to the fuel card can be accessed as such for expenses other than fuel or used to pay for fuel at gas stations that accept the fuel card; note that there may be transaction fees for each cash advance, payment or withdrawal.

It should be noted that it is an accommodation that is not offered by all freight factoring companies, and not all clients will qualify for it. A fuel advance program is a great option for the severely cash-strapped trucker to keep the business going provided the client passes the credit check or is a pre-approved for the fuel advance option. The fuel advance amount is part of the total due to the trucker and which in addition to any applicable fees will be deducted when the invoice is presented to the factoring company.