What is freight factoring?
A plain-language guide for carriers: how factoring turns a delivered load into cash today, what it costs, and when it makes sense.
Freight factoring is a way to get paid for a load as soon as you deliver it, instead of waiting 30 days or more for the broker to pay. You sell the invoice to a factoring company. The factor pays you most of the invoice right away, then collects the full amount from the broker.
It isn’t a loan. Nothing is borrowed and nothing is paid back in monthly installments. You’re selling something you already earned: the money a broker owes you for a load you hauled.
How freight factoring works
- You deliver the load and get the signed bill of lading (BOL).
- You send the invoice and BOL to your factoring company. With FFS, that’s an upload in the client portal, an email or a fax.
- The factor verifies the load with the broker, to confirm it was delivered and the invoice is good.
- You get paid. The factor sends the advance to your bank account. At FFS, rush requests fund within 60 minutes and standard requests are ready to fund the same day.
- The factor collects from the broker. The broker pays the factor directly, on the broker’s normal schedule. You don’t chase the payment.
What it costs
Factoring companies charge a fee, usually a percentage of the invoice. Read the fee structure closely, because two quotes with the same headline rate can cost very different amounts once extra charges are added.
FFS uses one flat fee. New carriers pay a 2.9% flat fee and get a 97.1% advance. Rush requests add a flat $40 processing fee. There are no minimums and no invoice fees.
Here’s what that looks like on a $2,500 invoice:
| Amount | |
|---|---|
| Invoice | $2,500.00 |
| Flat fee (2.9%) | −$72.50 |
| Advance to you (97.1%) | $2,427.50 |
A rush request on the same invoice adds the $40 processing fee.
Recourse and non-recourse factoring
The difference is who carries the risk if a broker never pays.
- Recourse factoring: if an invoice goes unpaid, you buy it back from the factor. It’s the most common arrangement in trucking, and it usually costs less.
- Non-recourse factoring: the factor takes the credit risk on unpaid invoices, typically for a higher fee and only for brokers it approves.
FFS factors with recourse by default and offers non-recourse on request. Either way, checking a broker’s credit before you haul is the best protection, and FFS does those checks for free.
Do you have to factor every invoice?
Not with every factor. Some ask you to factor your whole book. With FFS you choose which invoices to factor. Once a customer is set up, that customer pays FFS on every invoice, and FFS passes through the payments on invoices you didn’t factor.
Factoring vs. broker quick pay
Many brokers offer quick pay: they pay you sooner in exchange for a fee taken out of the load. Quick pay can work for a single load, but it only covers that one broker, and each broker sets its own terms and timing.
Factoring works the same way across all your brokers. One company bills every broker, collects every payment and funds you on a consistent schedule. A factor also handles collections and can check a broker’s credit before you book, which quick pay doesn’t do.
Who uses freight factoring
- New authorities, who need cash before the first broker checks arrive. FFS factors new authorities from the first load.
- Owner-operators, who are also their own billing department and would rather drive than chase payments.
- Small fleets, where unpaid invoices across several trucks tie up the money that covers payroll, fuel and repairs.
Getting started
Signing up with FFS takes four steps: apply online, review your terms with a real person, e-sign your agreement, then send invoices. Have your MC and DOT numbers, a W-9, your certificate of insurance and a voided check or bank letter ready.
Get a quote or call (813) 773-4002 to talk it through.
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