Freight Factoring Guide: Get Paid in 24 Hours
Turn unpaid invoices into immediate cash. Here's how factoring works and when it makes sense.
How Factoring Works
- 1
Deliver the Load
Complete delivery, get BOL signed, take pictures
- 2
Submit to Factor
Upload rate con, BOL, and invoice to factoring portal
- 3
Receive Advance (24-48 hrs)
Factor pays you 90-97% of invoice value
- 4
Factor Collects from Broker
Factor waits 30-45 days, collects from broker
- 5
Receive Reserve (minus fee)
Factor sends remaining 3-10% minus their fee (1-5%)
Factoring Companies Compared
| Company | Rate | Advance | Contract |
|---|---|---|---|
| OTR Solutions | 1.5-3% | 97% | No contract |
| RTS Financial | 1.5-3.5% | 95% | No contract |
| Apex Capital | 2-5% | 95% | 30 days |
| Triumph Pay | 2-4% | 90% | 12 months |
| Thunder Funding | 1.9-4% | 96% | No contract |
Factoring: Pros vs. Cons
Pros
- Cash in 24-48 hours
- Cover fuel, payroll, repairs immediately
- No debt - selling invoices, not borrowing
- Credit checks on brokers (risk protection)
- Many offer fuel cards, insurance
Cons
- 1-5% fee cuts into profit
- Some have long contracts
- Hidden fees (ACH, minimum volume)
- Recourse factoring = you pay if broker doesn't
- Some brokers don't work with factors
When to Factor vs. Wait for Payment
Factor when:
You need cash for fuel, repairs, or payroll before the 30-45 day broker payment arrives. The fee is worth the cash flow certainty.
Wait when:
You have cash reserves to cover 30-45 days of expenses. The 2-5% fee adds up - on $100,000/year in invoices, that's $2,000-5,000 lost.
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