Check every broker
Use the factor's credit check before you accept. New MCs attract bad brokers.
Factoring companies for new trucking companies
The first 30 to 45 days of a new authority are the hardest: loads delivered, costs due, no payments in yet. Factoring is how many new carriers get through them. Here's what factors ask a new MC, the credit myth, and the contract terms that matter most.
Monthly invoices
See my factoring rateWe refer carriers to a factoring partner and may be paid for referrals.
MILE02CONTRACT TERMS TO WATCH
Check the contract before you sign
Tick the terms you find in the agreement you're reading. Each one shows what it means for a new carrier, and the counter shows how many are worth negotiating.
TERMS TO RAISE WITH THE FACTOR
Tick the terms you see in the agreement you're reading.
MILE03WHAT FACTORS ASK NEW MCS
What factors ask a new MC
- Active authority. Your MC must be active on FMCSA's records, with insurance and BOC-3 filings on file.
- Insurance certificate. Auto liability and cargo, sometimes with the factor named as a certificate holder.
- Business documents. W-9, voided check or bank letter, ID, and sometimes formation documents.
- Clean records. No tax liens or judgments that would let someone else claim your invoices.
- Your first brokers. The factor checks their credit; strong brokers make approval easier.
MILE04THE CREDIT MYTH
Your credit matters less than you think
Many new carriers assume a short or bruised personal credit history will stop them from factoring. Usually it doesn't. The factor is buying an invoice that a broker will pay, so the broker's credit is what decides most of the risk.
What can stop approval are liens or unpaid taxes, which can give someone else a claim on your invoices, and anything that suggests fraud. If either applies to you, sort it out before applying.
MILE05SETUP TIMELINE
An example setup timeline
EXAMPLE timing. Your factor sets the real one.
- 01Day 1. Apply and send documents. The factor checks your authority and insurance.
- 02Days 2-3. Agreement signed. Notices of assignment go to the brokers you'll haul for.
- 03First load. Deliver, upload the signed rate con and BOL, get verified.
- 04Next business day. First advance lands. The reserve follows when the broker pays.
Start setup before your first load so the first invoice doesn't sit while paperwork catches up.
MILE06FIRST-MONTH TIPS
First-month tips
Send clean paperwork
Signed, readable, every stop. It's the difference between next-day and next-week funding.
Batch transfers
If there's a per-transfer fee, group invoices to pay it less often.
Watch the reserve
Know when it's released so you can plan around it.
MILE07FIRST MONTH
The gap factoring fills
An EXAMPLE new carrier delivers $12,600 of loads in its first month. Without factoring, none of it arrives until month two. With factoring at a 3% fee and a 95% advance, roughly $11,970 arrives within days of each delivery, minus about $378 in fees for the month.
MONTH ONE
EXAMPLE
- Delivered
- $12,600
- Paid without factoring
- $0
- Advanced with factoring
- $11,970
Fees$378
MILE08SCAMS TO WATCH
Scams that target new carriers
New authorities are targets, and some scams show up exactly where factoring does: payments, documents and broker contacts.
- Fake brokers. Someone using a real broker's name with a different email or phone. Verify contacts through FMCSA's records before booking.
- Double brokering. A load re-brokered without permission, often by a party who never pays. Unusually high rates from unknown brokers are a warning sign.
- Payment redirection. An email telling you or your factor to send money to a new account. Confirm by phone with a number you already trust.
- Requests for logins. No real broker or factor needs your FMCSA or bank login. Anyone asking is not who they say.
MILE09WHAT HELPS APPROVAL
What makes approval easier
Clean filings
Insurance, BOC-3 and authority all active and matching on FMCSA's records.
Strong first brokers
Established brokers with good payment history are easy for a factor to approve.
Complete documents
Everything sent at once saves days of back-and-forth.
A business bank account
Payments go to an account in your company's name.
Honest answers
Disclose liens or past issues up front; surprises later can end the relationship.
Realistic volume
Estimate your monthly invoices honestly; it shapes the quote.
MILE10AFTER MONTH SIX
What changes as your authority ages
As your authority builds history, more brokers will book you and your factor sees a track record of clean invoices. That's a good moment to ask for a rate review, especially if your monthly volume has grown.
It's also a good time to ask whether you still need to factor every invoice. Some carriers keep factoring only their slow-paying brokers once a cash cushion builds up. Read is factoring worth it when you get there.
MILE11DISPATCH
Getting your first loads
Factoring pays you for loads; it doesn't find them. New authorities face broker age rules and scams in the first months. Our dispatch desk works the brokers that book new MCs and checks every one; you approve every load, and the rate con comes straight to you. See dispatch for new authorities, the freight factoring overview, or start dispatch.
MILE12FAQ
New authority factoring FAQ
Q01Can a new MC get factoring?
Usually, yes. Because the brokers pay the invoices, factors focus on your brokers' credit more than your history. They'll still check that your authority is active, your insurance is on file and your paperwork is in order.
Q02Do factoring companies check my credit?
Some do, especially for new carriers, but a thin personal credit file rarely stops approval on its own. Liens, unpaid taxes or past fraud are bigger problems than a short history.
Q03What documents do I need to start factoring?
Typically your MC and DOT numbers, a certificate of insurance, a W-9, a voided check or bank letter, your ID, and the factoring agreement. Some factors also ask for articles of incorporation or an operating agreement.
Q04Do factors help with broker credit checks?
Most do. A quick check before you book helps a new carrier avoid brokers who pay slowly or not at all, which matters most in the first months when one unpaid load can sink your cash flow.
Q05How fast can a new authority start factoring?
Setup often takes a few days: application, checks, agreement and notices of assignment to your brokers. Start before your first load so funding isn't held up while you wait.
Q06Should a new authority choose non-recourse?
Possibly, if you'll haul for brokers you don't know yet and one unpaid invoice would hurt badly. It costs a little more. Read what it actually covers before paying for it.
Q07Do I need factoring before my first load?
You don't need it, but setting it up before the first load means the first invoice can be funded right away instead of waiting on paperwork. Many new carriers apply the same week their authority goes active.
Q08Will a factor reject a brand-new MC?
Some will, most won't. Factors mainly look at the brokers you'll haul for. If one turns you down, ask why; it's often a missing document or filing you can fix.
Q09Can I use quick pay instead as a new carrier?
Yes, with brokers that offer it. Quick pay can be cheaper for a few loads, but it depends on each broker. Factoring covers every broker the factor approves.
Q10Do I need a business bank account to factor?
Most factors require payments to go to an account in your business's name. Opening one before you apply saves time and keeps your records clean for taxes and audits.
Q11What if my first broker isn't approved by the factor?
Then the factor won't buy that invoice, which is a useful warning. Ask why. If the broker has weak credit or a poor payment history, it's often better to pass on the load.
See my factoring rate
We refer carriers to a factoring partner and may be paid for referrals.