Getting paid quickly is essential for keeping your trucking business running smoothly. While most brokers take 30-40 days to pay, a way to mitigate this and get paid faster is by working with a factoring company
Getting Started with Factoring
Required Documents
To get paid for your loads, you'll need:
- Rate confirmation showing the agreed price
- Proof of Delivery (POD), sometimes requiring receiver's signature
- Any accessorial receipts (lumper fees, scale tickets, etc.)
Pro tip: Use a scanning app like CamScanner to create clear digital copies of your documents. Keep both digital and physical copies for your records.
Understanding Factoring
Factoring lets you get paid quickly without waiting for broker payment terms. Instead of waiting 30-40 days, factoring companies typically pay within 24 hours of receiving your paperwork. They charge a small fee (usually 2-3%) for this service.
To factor a load:
- Deliver your load
- Submit paperwork to your factoring company
- Receive payment (usually same or next day)
- The factoring company collects from the broker
Types of Factoring
Recourse Factoring
- Lower fees (1-3%)
- You take on the risk of invoices that never get paid and are responsible for paying that debt back to the factoring company
- Less risky if you work with more established brokers
Non-Recourse Factoring
- Higher fees (3-5%)
- Factoring company takes on risk if broker doesn't pay
- Recommended option, especially when working with a variety of brokers
Benefits of Factoring
- Get paid within 24 hours
- No waiting for broker payment terms
- Professional credit checking and collections
- Often includes fuel card programs and other perks
Getting Started with Factoring
- Choose a factoring company by comparing:
- Rates
- Payment speed
- Contract terms and fees
- Additional services
- Submit your paperwork promptly and clearly
- Keep good records of all transactions
- Communicate with your factor if issues arise
Avoiding Common Issues
- Read contracts carefully before signing
- Watch for hidden fees. For example if you are have a low factoring rate of 1.5%, but have to pay an ACH fee every time you transfer money into your bank account, than what you are paying to get paid, immediately becomes more than what you signed up for
- Submit clean, complete paperwork
- Keep copies of everything
- Don't factor with multiple companies simultaneously
Need More Help?
Interested in TruckSmarter Factoring, with low rates from 2-3%, 50% of invoices are paid within 2 hours 7 days a week (even on holidays), 30 day flexible contracts, and no hidden fees? If you are new to factoring, head to the app to sign up and our team will contact you ASAP to support you through the onboarding process.
If you are already factoring with another company and need a factoring buyout? We’ve got you covered. Contact our support team and we’ll walk you through the process (plus we buy outstanding invoices so no issues there).
Call or text (404) 738-7125 or email factoring@trucksmarter.com us! As a factoring user, our support team is here to assist you with:
- Setting up your factoring account
- Submitting paperwork
- Resolving payment issues
- Monitoring and working with you to adjust and make sure your factoring rate reflects your monthly invoice volume