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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).

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Truck drivers can wait anywhere from 30, 60 or 90 days to get paid without working with a factoring company or using broker quick pays. And when your business is driven by these profits, you may not be able to wait for your invoice to go through.

Working with a factoring company helps truck drivers maximize profits by running the best paying loads. Not all brokers offer quick pays. If a carrier depends on fast payments and doesnt work with a factor, they may have to turn down higher-paying loads if there isnt a quick pay option.

You can run your trucking business perfectly fine without the services of a factoring company. Of course, you will have to plan for the lengthy wait times on getting paid by your customers, but you wont be out the fees and percentage cut taken by a factoring company.

Truck factoring rates vary depending on which freight factoring company you use and any freight factoring fees for additional services. Typically, charges can range from 1% to 4% per invoice. Freight factoring rates can also vary depending on several additional factors, including: The number of invoices you factor.

What happens if a customer fails to pay an invoice will depend on the type of factoring agreement? If you have a non-recourse agreement, the factoring company will bear the bad debt in most cases. If you have a recourse factoring management, you must repay the factoring company any invoices financed but not settled.

You can run your trucking business sufficiently without the services of a factoring company. Still, youll have to plan for the lengthy wait times to get paid by your customers, which can be devastating to business cash flows for most start-up trucking companies.

Businesses use freight factoring services to sell their invoices (at a small discount) to factoring companies or banks (factors) in order to receive a payment, typically within 24 hours.

Volume of Invoice Factored As previously indicated, most factoring companies require 1% to 5% of the charge that the customer will pay. For example, if the entire amount is $5,000, a 2.5% factoring business would offer you $4,876 and $125 would go to your factoring company.