Short Answer
Trucking invoice factoring advances 80–95% of your freight bills within 24 hours. Fees run 1.5–5% per invoice. No credit check on you — factors check your broker/shipper instead. Best for carriers dealing with 30–60 day payment delays from brokers.
Trucking Invoice Factoring: Best Companies Compared (2026)
Key Takeaways
- → Factoring fees run 1.5–5% of invoice value per 30 days. Faster payment = lower effective cost.
- → Advance rates: 70–95% of invoice value same day. Remainder (minus fees) paid when broker pays.
- → Recourse vs. non-recourse: non-recourse protects you if broker doesn't pay; costs 1–2% more.
- → Most factors require minimum monthly volume — watch for minimums if you're a small carrier.
- → FMCSA data: 43% of small carriers use factoring as their primary cash flow tool.
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How Freight Factoring Works — Step by Step
- Complete a load — deliver freight, get a signed BOL and rate confirmation
- Submit invoice to factor — upload or email your invoice and supporting docs
- Factor verifies — checks the broker's credit (not yours), usually takes 2–4 hours
- Advance sent — factor wires 80–95% of invoice to your account (same day or next day)
- Broker pays factor — in 30–60 days, broker pays the factor directly
- Reserve released — factor sends you the remaining 5–20%, minus their fee
Recourse vs. Non-Recourse Factoring
This is the most important decision when choosing a factoring company:
Recourse factoring — if the broker doesn't pay, you buy back the invoice. You carry the credit risk. Fees: 1.5–3%. Most factoring is recourse.
Non-recourse factoring — if the broker doesn't pay (due to insolvency), the factor absorbs the loss. Fees: 2.5–5%. Protects you from broker bankruptcies.
Most established carriers use recourse factoring and vet brokers carefully. New carriers or those dealing with unknown brokers benefit from non-recourse protection.
What to Watch Out For in Factoring Contracts
- Monthly minimums — Some factors require $10K–$50K/month in invoices. If you're seasonal or low-volume, you'll pay fees on unmet minimums.
- Long-term contracts — Many factors want 12–24 month commitments with early termination fees. Negotiate month-to-month if possible.
- ACH fees — Some charge $15–$30 per funding wire. On small invoices this adds up.
- Notification requirements — Factor may require you to notify all shippers/brokers that invoices are assigned to them. This is standard but worth understanding.
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