Quick answer: Carriers deliver loads but wait 30–60 days for brokers and shippers to pay, while fuel and drivers must be paid now. Freight factoring advances most of the invoice—often 90–97%—within a day of delivery, so trucks keep rolling. The factor collects from the broker/shipper.
Invoice Factoring
Trucking runs on immediate costs and delayed payment: fuel, drivers, and maintenance are due now, but freight brokers and shippers pay on net-30 to net-60. Freight factoring closes that gap by advancing cash on delivered loads the same day, so a carrier never has to park a truck waiting on a check.
The freight payment cycle is built for delay; factoring gets carriers paid on delivery.
A carrier pays for fuel at the pump, pays drivers on schedule, and covers maintenance as it happens—but the broker or shipper that booked the load pays 30, 45, or 60 days later. For owner-operators and small fleets, that gap can strand working capital in unpaid invoices while the next load’s fuel goes unbought. Freight factoring converts a delivered load into cash within a day, which is why it is standard practice across trucking.
The carrier submits the rate confirmation and proof of delivery (POD), and the factor advances most of the invoice immediately—often 90–97%. Many freight factors also run credit checks on brokers before you haul, helping you avoid loads that won’t pay. See how invoice factoring works for the underlying mechanics.
Complete the haul and collect the signed proof of delivery.
Send the rate confirmation and POD to the factor.
Receive ~90–97% the same or next day—use it for fuel and payroll.
The broker or shipper pays the factor on net terms.
You receive any remaining reserve minus the factor fee.
Rates depend on volume, who owes you, and how fast they pay.
Freight factoring fees commonly run about 1.5–4% per invoice, with the advance rate (90–97%) and fee shaped by your monthly volume, the credit quality of the brokers/shippers you haul for, and recourse vs. non-recourse terms. Many factors offer fuel advances—a portion of the load’s value released at pickup—and fuel-card programs that further ease cash flow. Watch for add-ons (ACH/wire fees, monthly minimums); for how the numbers are built, see invoice factoring rates and how factor rates work.
In recourse factoring (most common in trucking), you’re responsible if a broker never pays; it’s cheaper and pairs well with using the factor’s broker credit checks to avoid bad payers. Non-recourse shifts credit-default risk to the factor for a higher fee—but typically only covers a broker’s insolvency, not a dispute over a load. Because factors monitor broker credit daily, the credit-check service alone often prevents more losses than non-recourse coverage would.
Not all factors are equal—these terms separate a good facility from a costly one.
Dispatchers, ELD/fuel-card reps, truck dealers, and accountants who serve carriers are constantly around owner-operators who need faster cash. With a signed referral agreement, you can submit a carrier for a factoring facility and earn revenue share when it funds. Send a deal or learn about equipment financing for the truck itself.
FAQ
Freight factoring is invoice factoring for trucking. A carrier sells its delivered-load invoices to a factor and receives most of the value—often 90–97%—within a day, instead of waiting 30–60 days for the broker or shipper to pay. The factor then collects from the broker/shipper.
Most freight factors fund the same day or next business day after you submit the rate confirmation and signed proof of delivery. Some also offer fuel advances released at pickup, before delivery.
Fees commonly run about 1.5–4% per invoice, depending on your monthly volume, the credit quality of the brokers and shippers you haul for, and whether the facility is recourse or non-recourse. Advance rates are typically 90–97%.
With recourse factoring you remain responsible if a broker never pays; it is cheaper and most common. Non-recourse shifts the risk of a broker’s insolvency to the factor for a higher fee, but usually does not cover disputes over the load itself.
Yes. Factors underwrite the credit of the brokers and shippers who owe the invoices, not your years in business, so new authorities with creditworthy loads often qualify when a bank would decline them.
Yes. A dispatcher, dealer, or advisor with a signed referral agreement can submit a carrier for a factoring facility and earn revenue share when it funds. Approval and terms are never guaranteed.
Have a deal to place?
Review the referral agreement, sign it, and submit opportunities for evaluation.
