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How To Get the Best Factoring Rate – What to Look Out for When Choosing a Factoring Company


What is Truck Factoring & How Does it Help Truckers?

In the commercial trucking business, one of the most crucial aspects of the trade is to fulfill deliveries as soon as possible. However, the payments from customers — which can take anywhere from four to six weeks on average — are slow when you consider the direct expenses that come with order fulfillment. After all, many costs accompany operating a large truck across hundreds and sometimes thousands of miles. These costs include things like fuel and oil costs, as well as any parts repair or maintenance needs that might arise along the way.

With the option of truck factoring, fleets can turn to a middle party that forwards money from an invoice for an outstanding order. That way, the fleet can have the money right away to cover its costs and get the orders straight out to its customers. As long as the client is approved upon a credit check, the money for the invoice is deposited to the fleet within 24 hours. This option can be especially beneficial to small and medium-sized fleets, which might otherwise be crippled by overhead costs when cash flow is slow.

What are the Qualities of the Best Freight Factoring Companies? 

Fast Funding & 24/7 Cash Advances

Sometimes you cannot wait to be paid on 30-45 day payment terms. A company should offer support and cash advances 24/7 so you can have the money when you need it. Factoring makes it possible to get money a whole lot sooner to cover the immediate costs of transporting goods across state and regional lines.

When you sell a client invoice to a freight factoring company, you’ll be able to get money within the same day to cover the costs associated with trucking freights across great distances. That way, you don’t have to wait up to a month and a half to cover the following expenses that come with operating a trucking company. With the best freight factoring companies, it’s a win–win situation where you get the necessary cash to pay for gas and maintenance, and your customers still get their shipments on time.

Additional Trucker Perks

What other services do we offer? If you’re an owner or operator constantly on the road, you might not have a lot of time to do your accounts receivable billing and back-office administrative tasks. As a truck factoring company, we can take care of some of the paperwork so that you can focus on your primary skill — delivering freights to customers.


When you choose a truck factoring company to get money sooner, you can get benefits such as fuel cards and advances. You can also receive half–off advances at load pickup points, which can help cover the overhead costs that could otherwise mount in the trucking business. For smaller trucking companies, in particular, the rewards that come with factoring eliminate much of the confusion, stress and crippling expenses that sometimes come with the territory.

Fuel Cards For Truckers

One of the most significant benefits that the best freight factoring companies offer is fuel cards, which allow drivers to fill up for less at stops along trucking routes. Fuel cards make it possible to get discounts on gas and services at fuel stations throughout the U.S. and Canada. For fleet operators, this can lead to huge cost–savings over the course of a given week, month or quarter.

When you consider the current costs of fuel, any discount can lead to significant savings for a fleet of trucks. A cross–country shipment, for example, could spill into the four–figures on fuel costs alone. With a fuel card, the savings could allow fleets to free up resources, which is then allocated to other areas of business.

Flexible Factoring Programs

Freight factoring programs are different from company to company, so it’s always best to check a given company’s policies in advance of signing a contract. Before you choose a truck factoring company, check to see whether they’ll offer you the flexibility to do recourse, non-recourse, and spot factoring, which would allow you to factor on a load-by-load basis if and when you need to factor.

That way, you’ll know whether the terms of the company in question will suit the needs of your fleet. Will they allow you to do spot factoring, or are you required to factor all loads? Certain freight factoring companies issue contracts that require a 12–month commitment, whereas others only last for 30 days. For some fleets, a longer contract could be excessively binding, while other fleets might find the shorter terms too fleeting.

Trucking Industry Expertise

Some of the best freight factoring companies offer more than just factoring itself, but also support in areas that can be a nuisance to many trucking operations, especially smaller fleets. In addition to factoring, companies such as these often offer crucial staffing and back-office support that could be difficult for most trucking operations to handle independently.

At FactorLoads, freight drivers have access to a 24/7 Account Management Center that allows them to track payments and view notifications on transfers, advances and credit checks.

Integrity – Upfront Rates, No Hidden Fees

One of the worst things that any service company can do — whether within or outside the factoring industry — is to bait and switch its customers. For example, when a corporation lures you in on a sweetheart promotion with incredibly low rates but then jacks up the prices before you even realize, it would be an understatement to call the practice dishonest. Unfortunately, smaller fleets get taken advantage of by factoring companies that fit these descriptions.


A company that is truly looking out for your best interest won’t pull you in with “low rate” promises only to trap you with insurmountable expenses later on. For example, a good factoring company won’t start with charges as low as five percent, but then hike those charges to thirty percent upon renewing your contract for a full year. For these reasons and more, you must read the fine print of the contract to make sure that fees are flat and reasonable throughout the course of your involvement with a factoring company.

How do Do Truck Factoring Rates work?

Factoring rates are typically calculated like this:

  • As soon as you book a load for a given order, you send an email or fax message to a factoring company that contains information about the customer, as well as a confirmation of your rate.
  • Once the factoring service runs a credit check on the customer, they’ll inform you as to whether said customer has been green–lighted for the service of load factoring.
  • With the customer now approved, it’s up to you to pull the load.
  • Once the cargo is emptied, you then send another email or fax message to the factoring company — this one containing the Bills of Lading or any other documents that might apply to the load in question.
  • Within a few hours — or early the following day at the very latest — the factoring company will deposit money to whichever account you set up with them, be it through a bank or EFS account. The money you receive will be the amount of charges approved, which will typically be anywhere from 60 percent to 90 percent of the billing.
  • Roughly four to six weeks later, after the customer pays the invoice, you will be paid whatever balance remains from the load.

How Much do Freight Factoring Companies Charge?

Some companies are not completely upfront with how their “low rates” work. The fact of the matter is, reasonable truck factoring rates can be hard to come by, and this is one of the confusing aspects of choosing a factoring company. To get the best factoring rates possible, it’s best to research a factoring company before you get involved, and always read the fine print on the contract to know for sure about their actual rates.

What to Know & Ask About Factoring Rates

A lot of factoring companies will advertise a low rate, but need to watch out for:

  • Hold backs — this means even when you’re paid, the factoring company will always keep some portion of your money at all times, so you’re not getting as good of a rate as you think. If the holdbacks are too high, it could defeat the purpose of factoring and leave you underfunded for your immediate expenses. Look at the terms of a factoring service before you get involved to see how much money they hold back and whether this will be profitable for your business.
  • Fluctuating rates — many factoring companies won’t tell you that if you don’t factor a certain number of loads per month, your rate will skyrocket. Some owner-operators have even been put out of business through these practices. You might not have the same amount of monthly factoring needs as the company in question has set as its standard. Therefore, you should read reviews on the company to see whether other fleets have been unfairly charged for not meeting a particular amount of loads within a 30–day period.

Most freight factoring companies require credit checks on customers to see if there’s any history on record of payment blemishes. While the factoring company will usually run this credit check, they’ll likely charge you a nominal fee. Some factoring companies even offer a list of customers that have already been approved, which can be helpful to a fleet that looks to expand its base of clients.


Factoring companies rarely advance a freight invoice in full. Certain factoring companies require deposits, whereas others don’t. Therefore, before signing up with a service, be sure to check their terms to see if additional charges apply.

If you read the fine print of a factoring company’s policy, it might state that a certain amount of loads per month is required to keep rates at a certain level. Some of the larger businesses in the factoring industry are notorious for this practice. The trouble is, if your own factoring needs fall below the monthly minimum load–count that the company has set into place, the rates that ensue could be through the roof and leave you with little financial benefit from the transactions in question.

Some trucking companies have gone out of business due to unethical factoring. After all, the purpose of going to a factoring company is to get money upfront for direct road expenses that you might have trouble covering out–of–pocket due to the often-sluggish nature of customer payments. When you need to make a delivery as soon as possible, you don’t have time to wait six weeks for a payment to arrive when you consider the fuel costs and possible expenses of the trip ahead. Nor can you afford to get involved with a factoring company that adds further setbacks to the equation, so beware of a company’s policies.

Conclusion: Finding the Best Factoring Rate

Factoring is not something that should be confusing or complicated, but you need to be informed about a company’s policies and rates before you get involved with their services. The fact is, factoring offers many benefits for truckers when you collaborate with the right factoring company. An unfair or unrepeatable company, on the other hand, could be a financial setback to your fleet.


For more than 20 years, FactorLoads has been a provider of freight bill factoring services. Since our inception in 1996, we’ve offered the best factoring rates to fleets of all sizes. As the first company in the factoring industry to service start-ups and smaller fleets, our services have been especially beneficial to some of the smaller players in the trucking sector, who are often financially burdened by the slow invoice fulfillment of customers.

When you choose a truck factoring company, the company should have a track record for providing exceptional factoring services to fleets of all sizes, large and small. At FactorLoads, our commitment to service is unique, because we were founded by pioneers within the trucking industry. We can get you the money you need, when you need it, in addition to our other services.

To learn more about our factoring services and how they can benefit your fleet, contact the experts here at FactorLoads, where we will also review your current contract for free.

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