GET PAID FAST / THE BASICS
What is factoring in trucking? Paid this week, not next month
MONTHLY INVOICES
We refer carriers to a factoring partner and may be paid for referrals.
PROCESS PATH
How does factoring work in trucking? Follow one invoice
EXAMPLE: a drop-and-hook dry van load, $2,400 linehaul plus $150 detention at the receiver. Press play, or step through, and watch where the money is at each stop.
EXAMPLE INVOICE / DRY VAN DROP AND HOOK
STEP 1 OF 5
Trailer dropped, POD signed
IN YOUR ACCOUNT
$0
You drop the loaded van at the receiver, wait past the free time for the door, and get the proof of delivery signed with the in and out times. The broker owes $2,550, but nothing has been paid yet. Without factoring, this is where the 30 day wait or longer starts.
STEP 2 OF 5
Documents to the factor
IN YOUR ACCOUNT
$0
You upload the rate con, the signed bill of lading and the detention record through the factor's app or portal. The factor checks that the paperwork matches: rate, load number, signatures, times. Missing or mismatched documents are the most common reason an advance waits.
STEP 3 OF 5
Advance hits your account
IN YOUR ACCOUNT
$2,295
The factor buys the invoice and pays the advance, here 90% or $2,295. Many factors fund the same or next business day; faster wire funding often costs extra. That money covers fuel, payroll and the truck payment while the broker's terms run.
STEP 4 OF 5
Broker pays the factor
IN YOUR ACCOUNT
$2,295
Weeks later, the broker pays the full $2,550 to the factor, not to you. The broker knows to do that because of the Notice of Assignment the factor sent when you signed up. Chasing late payment is the factor's job now.
STEP 5 OF 5
Reserve comes back
IN YOUR ACCOUNT
$2,473.50
The factor kept a $255 reserve. It takes its 3% fee, $76.50, from that reserve and releases $178.50 to you. Total received: $2,473.50 from a $2,550 invoice, most of it weeks earlier than the broker paid.
WHAT YOU SEND
What is truck factoring paperwork? Three documents
Every factor asks for the same core paperwork. Get it right on the first upload and the advance moves without a phone call.
Rate confirmation
The signed agreement with the broker: rate, load number, pickup and delivery. It is the document the invoice is built on, and the one the factor checks against everything else.
Signed bill of lading
Proof of delivery, signed by the receiver, legible, with all pages. On drop loads, include the drop receipt or gate record if the receiver signs later.
Accessorial proof
Lumper receipts, detention times and any approval from the broker. Without them, a factor may fund the linehaul and leave the extras until the broker pays.
Clear photos beat crumpled scans. Upload the same day you deliver; most delays start with paperwork sitting in the cab for a week.
WHAT FACTORING IS NOT
What does factoring mean in trucking? A sale, not a loan
So what is factoring in the trucking industry, legally? A loan gives you money you pay back with interest, whether your customers pay or not. Factoring is different: the factoring company buys an invoice you already earned and collects it from the broker. There is no monthly payment and no interest rate. Approval depends mostly on your brokers' credit, not yours, which is why new authorities can usually factor when a bank would say no.
On the accounting side, a transfer of receivables counts as a sale only when you truly give up control of the invoice. Under recourse terms, where you must buy back invoices the broker never pays, it may be recorded as a secured borrowing instead. Ask your accountant how your agreement should be booked.
SOURCE: Deloitte DART (FASB ASC 860), SALE VS SECURED BORROWING, CHECKED OCTOBER 2026.
FACTORING IS NOT
- A loan with monthly payments or interest
- Free: the fee comes out of every invoice you factor
- Protection from every non-payment, even with non-recourse
- A reason to stop checking broker credit yourself
- Required on every load, if you pick a factor that lets you choose
What non-recourse actually covers, and what it doesn't, is in non-recourse factoring explained.
WORKED EXAMPLE
What is a factoring company for trucking worth on one load?
The same EXAMPLE load as above, on one card. The rate and advance are illustrations inside the published ranges, not a quote: typical fees run about 1% to 5% of the invoice and advances about 70% to 95%.
SOURCE: FreightWaves Checkpoint, FEE AND ADVANCE RANGES, UPDATED FEBRUARY 2026.
- Linehaul
- $2,400
- Detention at receiver
- $150
- Invoice total
- $2,550
- Advance at 90%, next business day
- $2,295
- Reserve held
- $255
- Factoring fee at 3%
- - $76.50
- Reserve released after broker pays
- $178.50
TIMING
How long each step takes, roughly
Timing varies by factor, broker and how clean your paperwork is. These are EXAMPLE timings to plan around, not promises; ask each factor for its own.
| Step | EXAMPLE timing | What speeds it up |
|---|---|---|
| Account setup | A few business days | Authority, W-9, insurance and bank details ready |
| Upload to advance | Same or next business day | Complete, legible paperwork sent on delivery day |
| Faster funding | Same day, often for an extra fee | Choosing wire or instant payout over ACH |
| Broker pays factor | Often 30 days or more | Nothing on your side; it is the broker's terms |
| Reserve released | Shortly after broker payment | A factor that releases reserves per invoice |
FROM DISPATCH TO DEPOSIT
Factoring is faster when the paperwork is right
When we dispatch your truck, we keep each load's rate con, bill of lading, detention times and lumper receipts together, so the invoice your factor sees is complete the day you deliver. Every rate con still comes to you to sign or turn down. Dispatch is a percentage of the load, no setup fee, month to month.
- Loads booked to your lanes, with your approval
- Detention and lumper proof gathered on the load
- Paperwork sent to your factor, whichever you use
QUESTIONS
What is freight factoring, answered
We refer carriers to a factoring partner and may be paid for referrals. More guides on the get paid fast hub.
01How is the factoring fee calculated?
Usually as a percentage of the invoice face value, taken out when the broker pays. Some factors charge a flat rate; others charge more the longer the broker takes. Typical fees run about 1% to 5%, most carriers paying 1.5% to 4%. Add any per-invoice, ACH or wire fees to get the real cost.
02Is factoring the same as a loan?
No. In the usual structure the factor buys your invoice and collects it from the broker, so there is no loan payment and no interest. How it shows on your books depends on the terms, especially recourse, so ask your accountant how to record it.
03What is an NOA?
A Notice of Assignment. The factor sends it to your brokers to tell them your invoices now belong to the factor and must be paid to the factor's account. Brokers who ignore it and pay you instead can be asked to pay again, which is why the NOA matters.
04How does freight factoring work step by step?
You deliver the load, upload the rate con, bill of lading and any receipts, and the factor checks them and pays an advance, often within a day. The broker later pays the full invoice to the factor, which then releases the reserve minus its fee.
05What is a factoring reserve?
The part of the invoice the factor holds back until the broker pays. If the advance is 90%, the reserve is 10%. When payment arrives, the factor takes its fee from the reserve and sends you the rest. Some factors advance almost everything and keep no reserve.
THREE STEPS
Get a factoring quote on your loads
our factoring partner reviews your details and sends a quote. No obligation. We refer carriers to a factoring partner and may be paid for referrals.
STEP 01
Your volume
Monthly invoices
STEP 02
Your brokers
Who you haul for
STEP 03
Your quote
Compare and decide
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