Freight Factoring Checklist: Compare Offers & Avoid Traps

Factoring companies buy your freight invoices and pay you most of the money right away, then collect from the broker. It’s the most common way new carriers keep cash flowing. See our factoring guide for the basics.

Compare offers

Factoring rateRequiredThe percentage per invoice, and whether it rises for slow-paying brokers.
Advance and reserveRequiredHow much you get upfront and when the rest is released.
Recourse or non-recourseRequiredWho carries the loss if a broker doesn’t pay, and what exactly is covered.
Contract term and terminationRequiredLength, notice period and early termination fees.
Minimums and extra feesRequiredMonthly minimums, same-day transfer fees, invoice fees.
Broker credit toolsFree credit checks on brokers before you book.
Fuel advancesIf it appliesWhether they advance fuel money at pickup.

Set up

Sign and send the notice of assignmentRequiredThe factoring company sends it to each broker.
Add it to your carrier packetBrokers askBrokers need it during setup.

Every load

Rate confirmationRequiredSigned, matching the final rate and accessorials.
Signed bill of lading and proof of deliveryRequiredClear photos or scans, all pages.
Receipts for lumper, detention and other extrasIf it appliesSubmit them with the invoice.
Submit the same day you deliverFaster submission means faster pay.

Official sources

49 CFR Part 387.307: Broker financial security

This page is general information, not legal or tax advice. Rules change; confirm with FMCSA, the IRS or your state before you file.

Questions carriers ask

What's a typical freight factoring rate?

It varies widely by volume, recourse and broker mix. Compare the total cost including minimums and fees, not just the rate.

Can I switch factoring companies?

Yes, but check your contract's termination notice and fees, and you'll need a release letter for your brokers.

Freight factoring checklist

Compare offers

Set up

Every load

Questions carriers ask