Freight factoring
Also: Factoring · Invoice factoring
Freight factoring is the sale of a carrier's unpaid invoices to a factoring company for immediate cash, typically 97 to 99 percent of face value, so the carrier is paid within a day or two instead of waiting the broker's 30-day terms; the factor then collects from the broker.
Carriers have fuel to buy on Monday and invoices that pay on the 45th day. Factoring closes the gap. The carrier delivers, sends the invoice and the proof of delivery to the factor, and receives most of the money at once; the factor waits for the broker’s payment and keeps the fee, which runs from about one percent for large, creditworthy accounts to three or more for small carriers on recourse terms.
Two flavors matter. With recourse factoring, the carrier buys the invoice back if the broker never pays; with non-recourse, the factor takes the credit risk, charges more, and checks the broker’s credit before approving the load. That credit check is why a broker with slow payment history finds carriers declining its freight: the factor said no.
For brokers, factoring shows up as paperwork and discipline. The notice of assignment redirects payment to the factor, and it applies to every invoice from that carrier until revoked. Factors reject invoices with missing or unsigned PODs, and they follow up on day 31. A brokerage that pays cleanly and quickly earns cheaper capacity over time, because factors rate brokers the way brokers rate carriers.
Quick pay is the broker’s own alternative: the broker pays in a few days for a fee, and keeps the fee instead of the factor earning it.
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Updated September 11, 2026 · All terms