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Truck Factoring

Best Truck Factoring Companies of 2024

Updated 4/15/2024

Trucking companies need to be careful when selecting a factoring company. While great factoring companies exist, the industry is rife with bad actors that intentionally take advantage of truckers.

These bad actors typically have hidden fees, monthly-minimums, and lock truckers into long-term contracts that are expensive or impossible to get out of. Unfortunately, some of the largest factoring companies use these tactics but continue to attract new clients because of large marketing budgets. 

To help you avoid these companies, we put together a list of factors we feel comfortable recommending. We prioritized options that have competitive rates, above average customer service, and are more transparent than others in the industry.

FEATURED PARTNER

Thunder Funding LogoSee Rates
  • Non-recourse factoring
  • Rates start at 3% for a single-truck company
  • 90-day contract with no termination fees
Whether you decide to go with one of these factors or not, we strongly recommend carefully reading any contract before you sign it.

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This cannot be stressed enough. Whatever you have been told by a company representative does not matter if it contradicts what is in the contract – the contract is all that matters.

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Even if you are just giving approval for a credit check, always read the fine print because some factoring companies sneak in language that allows them to file a UCC against your company (which can prevent you from working with other factors).

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If you need help reviewing a contract, we offer free assistance. You can contact our team here.

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If you’re new to the industry, our guide below covers how factoring works, how much it costs, the pros/cons, and the top companies in the industry.

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Table of Contents
What is truck factoring?
How does it work?
Why factor invoices?
Who can factor?
Comparing Options
Best Factoring Companies
FAQs
About the author
Kyle Fretwell of TruckInfo.net
Kyle Fretwell has worked as a researcher and data-journalist for over a decade. His work has appeared in publications such as Bloomberg, Fox Business, MSN, USA Today, CNBC, and the Houston Chronicle.

He now manages TruckInfo.net's content team and is a regular fixture at the Mid-America Trucking Show in Louisville.

What is truck factoring?

Truck factoring is when a trucking company sells its outstanding invoices to a factoring company for immediate payment minus a small fee.

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Truck factoring is sometimes referred to as trucking factoring or freight factoring.

FEATURED PARTNER

Transportation Management GroupSee Rates
  • Recourse & Non-recourse factoring
  • Rates start at 2.75% for a single-truck company
  • 30-day contract with no termination fees

How does factoring work?

Factoring allows companies to receive faster payment for their services. Rather than waiting 30-90 days for an invoice to be paid, a company can sell its invoices for a small fee to a factoring company, which then collects payment from the company’s customers.

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The factoring process is fairly straightforward:

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  1. Trucking company runs a credit check with the factoring company to confirm a customer can be factored
  2. Trucking company alerts the customer they will be factoring their invoices
  3. After a load is delivered, trucking company sends load documents to the factoring company
  4. Once approved, factoring company processes payment to the trucking company
  5. Factoring company collects payment from the customer

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Freight factoring can be a flexible solution for accounts receivable financing since most factoring companies don't require companies to factor all of their invoices. However, most factors do require companies to factor all invoices from a particular customer.

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While rare, the most flexible form of factoring is spot factoring which is when companies can decide which individual invoices to factor, not just which customers.

Why would a trucking company factor invoices?

Trucking companies factor invoices because they are typically paid 30-90 days after a load is delivered. This can cause cash flow problems because most companies don’t have enough working capital to cover fuel, insurance, and other expenses while they wait for invoices to be paid.

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FEATURED PARTNER

OTR Solutions LogoSee Rates
  • Recourse & non-recourse factoring
  • Rates start at 3% for a single-truck company
  • No monthly minimums or hidden fees

While immediate payment is the primary benefit, factoring has a number of pros:

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  • Immediate payment – Rather than waiting 30-90 days for invoices to be paid, factoring allows companies to be paid within a few hours or days of delivery.
  • Outsourced back office – Factoring companies handle invoicing and collection from the shipper or broker.
  • Fuel advances – Some factoring companies offer fuel advances once a load has been booked but before it has been delivered.
  • Easy approval – Compared to other financing options, like a traditional loan, most trucking companies will qualify for factoring even if they have no credit history. As long as the trucking company’s clients are creditworthy, the trucking company shouldn’t have a problem factoring invoices.
  • No balance sheet impact – Since factoring companies purchase the invoices, factoring doesn’t usually impact other forms of financing, like semi-truck financing. One common exception to this would be working-capital loans, which might be impacted.
  • Flexible financing – Most factoring companies will allow trucking companies to choose which invoices are factored so if a trucking company can wait for the invoice to be paid, they can avoid the factoring fee.

While factoring has a range of benefits, drawbacks include:

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  • Factoring fees – Most factoring companies charge 1-5% of the invoice value. Some companies also charge additional fees for invoice processing, ACH/wire transfers, and other services.
  • Not every invoice can be factored – While factoring companies want to factor as many invoices as possible, they often won’t factor invoices from customers with poor or no credit history. To avoid truckers booking loads with brokers or shippers that don't qualify, most factoring companies offer free credit checks on potential customers.
  • Potential recourse – Depending on the factoring agreement, if a customer fails to pay the invoice, the trucking company may be required to repurchase the invoice from the factoring company. This is known as recourse factoring. Many companies also offer non-recourse factoring but these usually only cover certain scenarios. We cover which companies offer the best non-recourse factoring here.

Who can factor invoices?

Any business with creditworthy customers can factor invoices. In trucking, this usually means motor carriers and independent owner operators. 

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The financial condition or credit score of a company does not influence whether it can get approved for factoring. Instead, factors primarily evaluate the creditworthiness of the trucking company’s clients. If a trucking company has some customers that are creditworthy and others that are not, the factoring company can decide to only factor invoices from the creditworthy customer.

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Even if a trucking company has some customers with poor credit, they can still factor invoices from customers with good credit.

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Owner operators leased onto a motor carrier are not eligible for factoring because they are not directly invoicing brokers and shippers.

Comparing Truck Factoring Companies

To create our list of the best truck factoring companies, we researched the largest players in the space, smaller firms, and newer tech-focused companies that are making a name for themselves.

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We compared factoring companies along the following dimensions:

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Recourse vs Non-Recourse

Put simply, a recourse factoring agreement requires trucking companies to repurchase unpaid invoices if their customers don’t pay the factoring company after a set period of time. 

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While non-recourse implies that a trucking company removes all risk of non-payment, it’s usually not that simple. Most non-recourse factoring agreements only cover specific scenarios.

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For example, most non-recourse agreements only cover when the customer declares bankruptcy between the original invoice date and due date. If a customer decides not to pay for any other reason, most (but not all) factoring companies will require the trucking company to repurchase the invoice.

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Always read the find print to see what scenarios are covered for non-recourse factoring.

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Factor Rate (Discount Rate)

Also known as the factor fee or discount rate, this is how much it costs a trucking company to factor an invoice.

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In theory, if the factor rate is 3% and a trucking company has an invoice worth $100, they will receive $97 and the factoring company will keep $3. In practice, most factoring companies have additional fees that are associated with each invoice so the total cost of factoring is usually higher.

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Additionally, some factors use a flat-fee structure while others use a variable fee structure. Under a variable fee structure, fees depend on how long it takes the customers to pay the invoice.

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For example, the factor rate might be 2% for the first 30 days and an additional 1% for each additional 30-day period until the invoice is paid. Under a flat-fee structure, the factor rate would be 2% regardless of when the invoice is paid.

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For the reasons covered above, it can be difficult to compare the total cost of factoring from one company to another. However, in general, the best factoring companies offer flat-fee invoices with few (if any) additional fees.

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Other Fees

It’s not uncommon for factoring companies to advertise a low factor rate but to make up for it with additional fees. These fees can include but aren’t limited to:

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  • Initial setup fee
  • Monthly fees
  • Invoice processing fees
  • ACH/wire fees (all companies charges for wires)
  • Monthly minimum (fees that kick in if the total value of invoices factored is below the minimum)

As mentioned above, the best companies usually don’t have many “extra” fees on top of the factor rate.

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Advance Rate

Some factors only advance a percentage of the total amount the trucking company will receive. For example, if a trucking company factors a $100 invoice with a 3% factor rate and a 90% advance rate, the trucking company would receive $97. However, they would only receive $87.30  immediately and the remaining $9.70 once the invoice is paid.

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The best factoring companies have 100% advance rates so truckers get paid everything upfront.

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Processing Times

How quickly a trucking company gets paid will depend on: 

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  1. How quickly the factoring company approves invoices
  2. How quickly they pay invoices

It’s also worth asking if invoices are approved on nights, weekends, and holidays. Unfortunately, most invoices cannot be paid on nights, weekends, or holidays even if the invoices is approved but some companies have proprietary payment systems that enable trucking companies to access their money 24/7.

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Some companies charge fees for instant access to funds while others offer this service for free.

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Cancellation Policy & Fees

Unfortunately, it’s not uncommon for truckers to get locked into long term contracts that include an early termination fee that can be thousands to tens-of-thousands of dollars.

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In general, it’s best to avoid any factoring company that has a contract longer than a year. A few of the factoring companies we recommend require no contract and trucking companies can leave at anytime.

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Additional Services

In addition to basic invoice factoring, some factors also offer products and services like load boards, fuel cards, fuel advances for booked loads, or lines of credit. Some also have their own mobile app to make submitting invoices as simple as possible. While these extras can be nice, it’s not recommended to choose a factoring company purely based on these.

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UCC Filing Type

A Uniform Commercial Code (UCC) filing allows creditors to check whether a company has pledged their assets as collateral to another third party. This prevents a company from using the same asset to secure multiple loans. Nearly all factoring companies will require a UCC filing for a company’s accounts receivable. However, some companies try to place a blanket UCC filing that covers all of the company’s assets.

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It’s best to restrict the UCC filing to just the accounts receivable to maintain flexibility for other types of financing.

Best Truck Factoring Companies

Thunder Funding
‍‍Flexible Non-recourse Factoring

FEATURED PARTNER

See Rates

Overview

Thunder Funding is fast-growing factoring company that exclusively focuses on funding solutions for motor carriers.

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The main advantage of Thunder Funding is that they do not lock carriers into longterm contracts. Instead, they use 90-day contracts with no termination fees once the contract period is complete.

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Thunder Funding offers competitive rates for non-recourse factoring but their non-recourse program is slightly more restrictive other companies on our list. They only cover invoices from brokers that become insolvent after a load has been delivered. If the broker is slow to pay or refuses to pay for other reasons, trucking companies are on the hook.

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Factoring Available

  • Non-recourse

Factor Rate

  • Non-recourse starts at 3% for a single-truck company
  • Larger companies can get lower rates

Advance Rate & Fees

  • 100% Advance Rate
  • $10 ACH fee
  • $20 wire fee
  • No other fees
  • No monthly minimums

Contract

  • 90-day contract with no termination fees
  • Can select which customers are factored

User Reviews

  • Google Reviews: 4.5 (178 reviews as of 8/10/2023)
  • iOS App: 5.0 (1 review as of 7/7/2023)
  • Android App: N/A (0 reviews as of 7/7/2023)

Additional Features & Services

  • A mobile app & online portal to manage loads, invoices, and scan documents
  • Fuel advances available once loaded 7 days a week from 7am-9pm PT(need to share paperwork)
  • Free broker/shipper credit checks 24/7
  • Discounts to the 123Loadboard
  • Free fuel card with discounts on fuel, tires, maintenance, and other services

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Transportation Management Group
Recourse & Non-recourse Factoring

FEATURED PARTNER

Call: (931) 273-2301See Rates

Overview

The Transportation Management Group was started by industry veterans that previously worked at some of the biggest factoring companies in the country.

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The company sets itself apart from other factoring companies in a number of ways. First, they don't lock clients into long term contracts, using only 30-day contracts with no termination fees. Second, the company works with multiple financial partners so if a better rate becomes available, they can seamlessly switch clients over without any work on the client's end. Additionally, the company does not have an office number and instead allows clients to contact account managers directly via their cell phone – ensuring prompt service and the ability to always get in touch with the company.

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Factoring Available

  • Recourse
  • Non-recourse

Factor Rate

  • Rates starts at 2.75% for a single-truck company
  • Larger companies can get lower rates

Advance Rate & Fees

  • 100% Advance Rate
  • $1 ACH fee
  • $10 wire fee
  • No other fees
  • No monthly minimums

Contract

  • 30-day contract with no termination fees
  • Can select which customers are factored

User Reviews

  • Google Reviews: 5 (13 reviews as of 6/20/2024)
  • iOS App: N/A
  • Android App: N/A

Additional Features & Services

  • An online portal with free credit checks and ability to see aging report
  • Fuel cards
  • Load board
  • Direct access to your account manager via their cell phone number

OTR Solutions
Best for Non-recourse Factoring

FEATURED PARTNER

Call: (470) 824-3408See Rates

Overview

OTR Solutions, formally known as OTR Capital, is one of the only large factoring companies that has great user reviews. The company offers both recourse and non-recourse factoring, which provides more protection than most other factors. While most non-recourse programs only cover invoices from a broker or shipper that goes out of business, OTR's program covers all invoices that have proof of delivery without issue. So if a customer is late to pay or  withholds funds for other reasons, trucking companies aren't typically on the hook.

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From a pricing perspective, OTR offers competitive rates with non-recourse factoring starting at 3% for a one-truck company (larger trucking companies will have a lower rate). While OTR does charge for ACH transfers, their fees are lower than most other factors that charge for ACH transfers (only $3 vs $10). Outside of the ACH fee, most trucking companies will not incur any additional fees as there are no monthly minimums, invoice processing fees, etc. However, OTR does offer instant access to funds via their BOLT program for $25 for companies in need of quick cash.

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The only downside to OTR is that after a 90-day trial period, they require an annual contract. However, the trial period combined with the wide range of free features and services makes OTR a great choice for companies.

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Factoring Available

  • Recourse
  • Non-recourse

Factor Rate

  • Recourse starts at 2.75% for a single-truck company
  • Non-recourse starts at 3% for a single-truck company
  • Larger companies can get lower rates

Advance Rate & Fees

  • 100% Advance Rate
  • $3 ACH fee
  • $25 Bolt instant payment fee (OTR's proprietary payment system that is faster than a wire transfer)
  • $30 wire fee
  • No other fees
  • No monthly minimums

Contract

  • 1-year contract with a 90-day trial to start
  • Can leave at anytime during an annual contract with a 60-day notice but will occur an early termination fee
  • Termination fee depends on time left under contract and how monthly invoicing volume
  • Can select which customers are factored

User Reviews

  • Google Reviews: 4.7 (419 reviews as of 5/23/2023)
  • iOS App: 4.8 (92 reviews as of 5/23/2023)
  • Android App: 4.8 (319 reviews as of 5/23/2023)

Additional Features & Services

  • A mobile app & online portal to manage loads and scan documents
  • Free broker credit checks / integrated with the DAT load board to see which loads can be factored
  • A free load board with data on nationwide & lane rates per mile
  • Fuel advances available once loads are booked (7 days per week from 8am-8pm ET); lumper advances also available
  • OTR fuel card with average savings of 54¢ per gallon
  • A fuel finder app, to help drivers find the best prices on their routes
  • Integrations available for major TMS platforms

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Haulpay
‍Flexible Non-recourse Factoring

FEATURED PARTNER

See Rates

Overview

Haulpay is the factoring arm of Comfreight, a freight-tech company most known for it's load board product. The company offers a true non-recourse factoring program which covers all invoices as long as there is proof of delivery without issue. So even if a broker or shipper let's an invoice go past due for few months, trucking companies aren't on the hook.

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From a pricing perspective, Haulpay offers competitive rates inline with most non-recourse factoring options but they set themselves apart by not requiring longterm contracts and having no other fees, not even for ACH transfers. Not paying for ACH transfers can save trucking companies hundreds of dollars each year.

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Clients can also access the Comfreight load board product for free.

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Factoring Available

  • Non-recourse

Factor Rate

  • Non-recourse starts at 3% for a single-truck company
  • Larger companies can get lower rates

Advance Rate & Fees

  • 100% Advance Rate
  • Free ACH transfers
  • $25 wire fee
  • No other fees
  • No monthly minimums

Contract

  • 3-month contract with no termination fees
  • Can select which customers are factored

User Reviews

  • Google Reviews: 4.8 (6 reviews as of 7/5/2023)
  • iOS App: 4.7 (152 reviews as of 7/5/2023)
  • Android App: 4.3 (153 reviews as of 7/5/2023)

Additional Features & Services

  • A mobile app & online portal to manage loads, invoices, and scan documents
  • Free credit checks
  • Free access to the Comfreight load board with data on nationwide & lane rates
  • Fuel advances available once loads are booked (7 days per week from 8am-8pm ET); lumper advances also available
  • Integrates with TMS platforms

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Bobtail Factoring

FEATURED PARTNER

See Rates

Overview

Although a newer factoring company, Bobtail has quickly built an excellent reputation and consistently receives positive user reviews. The company caters to smaller trucking companies with 1-10 trucks and their staff speaks multiple languages, which makes them particularly popular with truckers that speak English as a second language.

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The company offers recourse factoring and rates start at 3.25% but go as low as 1.75%. While the rates are competitive, the company doesn't charge any other fees (except wires) which means even more savings for trucking companies. The company also uses 30-day contracts which means companies can try out Bobtail risk free.

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Factoring Available

  • Recourse

Factor Rate

  • Starts at 3.25%
  • Rates as low as 1.75%

Advance Rate & Fees

  • 100% Advance Rate
  • Free ACH transfers
  • $18 wire fee
  • No other fees
  • No monthly minimums

Contract

  • 30-day contract
  • No termination fees
  • Can select which customers are factored

User Reviews

  • Trustpilot: 4.6 (64 reviews as of 2/12/2024)
  • iOS App: 3.9 (7 reviews as of 2/12/2024)
  • Android App: 4.1 (8 reviews as of 2/12/2024)

Additional Features & Services

  • A mobile app & online portal
  • Bobtail Zero Mastercard – a zero fee fleet card

Transport Clearing East (TCE)
‍Best Recourse Factoring

See Rates

Overview

Rather than a traditional for-profit company, Transport Clearing East (TCE) is a co-op where all factoring clients are also members. As a not-for-profit company, TCE is able to offer low rates as well as annual dividends where members receive a percentage of the profit based on how much the amount they factored over the year.

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The biggest drawback to TCE for most trucking companies is that they only offer recourse factoring, meaning any invoices that are unpaid after 90 days must be repurchased.

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Factoring Available

  • Recourse

Factor Rate

  • Recourse is 1.93%

Advance Rate & Fees

  • 100% advance rate
  • $25 monthly fee
  • No other fees
  • No monthly minimums

Contract

  • No contract, can leave at any time
  • All invoices must be factored unless they are approved on a case-by-case basis

User Reviews

  • BBB Rating: A+(as of 6/30/2023)

Additional Features & Services

  • Annual dividend at end of year
  • An online portal to manage loads and scan documents

FAQs


What is a good factoring rate in trucking?

Factoring rates will vary with interest rates but a good rate is usually 1-3%. However, it’s important to note that some factors charge additional fees so the total cost of factoring may be higher.

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Who pays the factoring fee?

The factoring fee is deducted from the invoice’s total amount and is therefore paid by the trucking company or owner operator. For instance, if the factoring rate is 3% on an invoice value of $10,000 (and no other fees apply), the trucking business can expect to receive a total of $9,700 (adding up the advance amount and the rebate).

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Can you write off factoring expenses?

Yes, factoring fees are tax deductible. For more information on specific scenarios, it is advisable to talk to a tax consultant.

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How long does it take to factor a load?

After submitting the signed invoice (which can be faster if the factor offers an online portal or mobile app to send invoices), the factoring company will need to approve the invoice for purchasing. Once that’s done, the advance funds will be deposited in the trucking company’s account via ACH (overnight), wire transfer (within an hour), or on a fuel card (instantly). On average, getting access to funds takes around 24 hours.

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Do factoring companies run credit checks?

Factoring companies run credit checks on the customers of the trucking company or owner operator to assess their risks and creditworthiness, but not the trucking business itself.

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Is factoring a good idea?

For some transportation companies and owner operators, freight factoring is a great option as it helps provide working capital by bridging through the gaps in cash flow that 30-90 day payout periods can mean. Especially for smaller trucking businesses experiencing fast growth, factoring can help cover daily operating expenses without incurring debt.

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