Freight factoring is essential for trucking cash flow. Here's how it works:
The Basics:
- ●Deliver a load
- ●Submit BOL and invoice to factor
- ●Receive 90-97% within hours
- ●Factor collects from broker/shipper
- ●Receive remaining balance minus fee
Why Trucking Factoring is Different:
- ●Highest advance rates in any industry (90-97%)
- ●Same-day or next-day funding
- ●Fuel advance programs
- ●Load board integrations
- ●Credit checks on brokers
Factoring Fees:
- ●Flat fee: 1.5-5% per invoice
- ●Or tiered: 2% first 30 days + 0.5% per 10 days after
- ●Fuel advance fees: 2-3%
Types of Factoring:
Recourse:
- ●You're responsible if broker doesn't pay
- ●Lower fees (1.5-3%)
- ●More common
Non-Recourse:
- ●Factor assumes risk of non-payment
- ●Higher fees (3-5%)
- ●Limited protection (typically fraud only)
What to Look for in a Factor:
- ●No long-term contracts (or low minimums)
- ●High advance rate (95%+)
- ●Fuel advance program
- ●Good broker credit checking
- ●Quick funding (same-day)
- ●Reasonable fees
Fuel Advance Programs: Many factors offer fuel advances:
- ●Get 40-50% of load value at pickup
- ●Loaded on fuel card
- ●Deducted from final payment
- ●Keeps trucks moving