Freight factoring: paid this week, not in 35 days
Brokers pay in 30 to 45 days. Fuel, insurance and the truck payment don't wait. Freight factoring turns a delivered load into cash, usually within a day, for a fee. Here is how it works, what it really costs, and when it's worth it.
Monthly invoices
See my factoring rateWe refer carriers to a factoring partner and may be paid for referrals.
One invoice, two timelines
Set an EXAMPLE invoice, a fee, an advance rate and how long the broker takes to pay. The top line is waiting for the broker; the bottom is factoring: most of the money on day one, the rest when the broker pays, minus the fee.
EXAMPLE values. Your factor's quote sets the real fee, advance and reserve rules.
WITHOUT FACTORING
$2,400
WITH FACTORING
$2,280
$48
EXAMPLE
- Invoice
- $2,400
- Advance 95%, day 1
- $2,280
- Fee 3%
- -$72
- Reserve, day 35
- $48
Factoring vs broker quick pay
Many brokers offer quick pay: payment in a few days instead of a month, for a fee taken from that load. Factoring does the same job across all your brokers through one company. Which is better depends on how many brokers you haul for and how often you need cash fast.
| Factoring | Broker quick pay | |
|---|---|---|
| Who pays you early | The factor | The broker |
| Works with | Every broker the factor approves | Only brokers that offer it |
| Cost | A fee per invoice, set in your agreement | A fee per load, set by each broker |
| Paperwork | One place for every load | Each broker's own process |
| Collections | The factor collects from the broker | Not needed; the broker pays you |
| Contract | Often an agreement with a term | Usually none; choose per load |
Quick pay works well for carriers with a few regular brokers. Factoring suits carriers with many brokers, irregular freight, or a cash gap every week.
What factoring really costs
The headline rate is only part of the price. A 2026 review of trucking factors listed published starting rates from under 1% to 2.5% and up, advance rates up to 95% or 100% at some companies, and several factors that don't publish rates at all. Small carriers often get quoted above the starting rate, and extra fees can raise the real cost.
| Item | What it means | Ask |
|---|---|---|
| Factoring fee | Percentage kept from each invoice | Flat, or rising the longer the broker takes? |
| Advance rate | Share of the invoice paid up front | What's held back, and when is it released? |
| Reserve | The held-back part, paid when the broker pays | How long can the factor hold it? |
| Recourse | Who absorbs an unpaid invoice | How many days until it comes back to me? |
| Extra fees | ACH, same-day, wire, invoice, monthly minimum | Is there any fee not on this list? |
| Contract | Term and termination | How do I leave, and what does it cost? |
SOURCE: Published rates: NerdWallet, best factoring companies for trucking (Apr 30, 2026). Rates change; get a written quote.
The full breakdown is on factoring rates.
How freight factoring works
- STEP 1
Deliver and send paperwork
Upload the signed rate con, BOL or proof of delivery, and your invoice. Your notice of assignment tells the broker to pay the factor.
- STEP 2
Get the advance
The factor verifies the load with the broker, then pays most of the invoice, often within a business day.
- STEP 3
Broker pays the factor
On the broker's normal terms. The factor releases the reserve to you, minus the fee.
The step-by-step version, with an example load and the broker's side of it, is on how factoring works. If unpaid invoices worry you, read non-recourse factoring first.
What factoring looks like by truck
EXAMPLE
- Invoice
- $650
- Advance 95%
- $618
- Fee 3%
- -$20
EXAMPLE
- Invoice
- $2,300
- Advance 95%
- $2,185
- Fee 3%
- -$69
EXAMPLE
- Invoice
- $1,150
- Advance 95%
- $1,093
- Fee 3%
- -$35
Small invoices add up: a box truck or hotshot running several short loads a week can have six or eight invoices out at once, each waiting a month. That's where factoring usually helps most. Hotshot owners can read more on hotshot factoring.
Factoring usually fits when
- You haul for many brokers. One company collects from all of them, instead of you chasing each one.
- Cash runs thin every week. Fuel and insurance come due before the first broker pays.
- You're growing. A second truck means a second set of costs before the first invoices clear.
- Your authority is new. The first 30 to 45 days are the hardest, with no payments in yet.
It may not when
- You have a cash reserve. If you can comfortably wait a month, the fee is money you don't need to spend.
- Your brokers pay fast. A few regular brokers with quick pay may be cheaper.
- Your margins are thin. A few percent of every invoice can be the difference between profit and loss.
The honest pros and cons are on is factoring worth it.
Read these clauses before you sign
- Term and renewal. How long the agreement runs and whether it renews on its own. Short terms or month-to-month are easier to leave.
- Termination. How much notice you need to give and whether there's a fee to leave early.
- Minimums. Whether you must factor a set amount each month, and what happens if you don't.
- All or some invoices. Whether you must factor every invoice, every invoice from a broker, or only the ones you choose.
- Recourse period. How many days the factor waits before charging an unpaid invoice back to you.
- Fee schedule. Every fee in one list: factoring, ACH, wire, same-day, invoice, fuel advance.
This is general information, not legal advice. If a clause isn't clear, ask the factor to explain it in writing before you sign.
When a broker doesn't pay
With recourse factoring, if a broker doesn't pay within the recourse period, the factor charges the advance back to you, usually from your next payments. With non-recourse factoring, the factor absorbs the loss in the specific cases the agreement covers, most often when the broker goes out of business. Disputes over damage, shortages or late delivery usually aren't covered by either.
The best protection is not hauling for risky brokers in the first place. Most factors run a credit check on a broker before you book, and our dispatch desk checks every broker before an offer reaches you.
Factoring guides by situation
- How factoring works
Step by step, with an example load.
- Factoring rates
Flat vs tiered, and a quote decoded.
- Is factoring worth it?
When it fits, and when it doesn't.
- Non-recourse factoring
What it covers, and what it doesn't.
- Comparing factoring companies
Criteria, red flags, published terms.
- Owner-operator factoring
One truck, factored from your phone.
- Factoring for new authorities
Getting paid on your first loads.
- Small fleet factoring
Payroll timing across trucks.
- Fuel advances and fuel cards
Cash at pickup, discounts at the pump.
- Hotshot factoring
Small invoices, many brokers.
- Oilfield factoring
Long operator terms, field tickets.
- Dispatch and factoring together
Loads booked, paid fast.
Need loads as well as cash?
Our dispatch desk finds and negotiates loads for every equipment type. You approve every load, and the rate con comes straight to you, which is also what the factor needs to fund you. Factoring stays optional either way. See hotshot dispatch or how we dispatch.
Freight factoring FAQ
Q01How fast do I get paid?
Many factors fund within one business day of receiving clean paperwork, and some offer same-day funding, sometimes for an extra fee. The speed depends on your factor, the time you submit and whether the broker has verified the load.
Q02How much does trucking factoring cost?
A fee taken from each invoice, plus any extra fees in the agreement. Published starting rates in a 2026 review ranged from under 1% to 2.5% and up, and many factors don't publish rates at all. Small carriers often get quoted higher than the starting rates. Compare the total cost, not the headline.
Q03Do I need good credit to factor?
Usually your broker's credit matters more than yours, because the broker is the one paying the invoice. Factors still check your authority, insurance and history, and some check your personal credit too.
Q04Can I factor only some loads?
With some factors, yes; this is often called spot factoring. Others require you to factor all invoices from a broker, or all your invoices. Check the agreement before signing.
Q05What documents do I need to factor a load?
Usually the signed rate con, the signed bill of lading or proof of delivery, and your invoice. Some factors want lumper receipts or scale tickets when they apply. Clear photos from your phone are usually enough.
Q06Can I switch factoring companies?
Yes, but read your agreement's term and termination clause first. Switching usually means giving notice, settling open invoices and sending brokers a new notice of assignment.
Q07Is factoring a loan?
No. You're selling an invoice you've already earned, not borrowing against future income. There's no loan to repay, but you do pay the factoring fee and may owe money back if a recourse invoice goes unpaid.
Q08Will my brokers know I factor?
Yes. The notice of assignment tells each broker to pay the factor instead of you. It's routine in trucking, and most brokers deal with factored carriers every day.
Q09Can I factor with a new authority?
Usually. Factors look mainly at your brokers' credit, so many accept new authorities. Read our page on factoring for new authorities for what they ask for.
Q10What is a factoring reserve?
The part of the invoice the factor holds back when it pays the advance. When the broker pays the factor, the reserve is released to you, minus the fee. Ask how long the reserve can be held and when it's paid out.
Q11What happens to factoring if I take a week off?
Nothing, unless your agreement has a monthly minimum. Without one, you simply submit no invoices that week. That's one reason to avoid minimums if your schedule varies.
Q12Do I have to factor to use your dispatch service?
No. Factoring is optional. Many carriers we dispatch don't factor at all. If you do factor, with our partner or anyone else, we make sure brokers have your notice of assignment.
We refer carriers to a factoring partner and may be paid for referrals.