Running a trucking business? Then you know the struggle—delivering loads on time while waiting weeks (or months!) to get paid. Freight factoring can be a game-changer, putting cash in your pocket fast instead of chasing down slow-paying brokers.
But here’s the catch—not all factoring companies are the same. Some offer great rates but bury hidden fees. Others promise quick payments but leave you drowning in paperwork. So before you sign up, ask these 10 crucial questions to avoid costly surprises and find the best fit for your business.
1. “What’s the REAL cost?” (Hint: Look Beyond the Rate)
Sure, the factoring rate matters—but don’t stop there. Ask about:
✔ Setup fees (some charge hundreds just to get started)
✔ ACH/Wire transfer fees (a few bucks per transaction adds up)
✔ Monthly minimums (will you pay extra if business slows down?)
✔ Early cancellation penalties (are you locked in for a year?)
🚨 Why? A “low rate” can turn expensive fast if extra fees sneak up on you.
2. “Am I on the Hook if My Customer Doesn’t Pay?” (Recourse vs. Non-Recourse)
- Recourse factoring → If your customer doesn’t pay, you repay the factor.
- Non-recourse → The factoring company eats the loss (but usually only if the customer goes bankrupt—read the fine print!)
🚨 Why? If a broker goes bust, will you be stuck footing the bill?
3. “How Fast Do I Get Paid?” (Same-Day Funding or Waiting Game?)
Some companies fund your invoices in 24 hours; others take days. If you need cash now, speed matters.
🚨 Why? Waiting 3-5 days for payment defeats the purpose of factoring.
4. “Do You Offer Fuel Advances or Discounts?” (Extra Perks = More Savings)
Fuel costs killing you? Some factors offer:
✔ Fuel advances (get cash upfront for diesel)
✔ Fuel cards (discounts at truck stops)
🚨 Why? Every penny saved on fuel goes straight to your bottom line.
5. “Am I Locked Into a Long Contract?” (Flexibility = Freedom)
Avoid companies that trap you in a 1-2 year contract with hefty cancellation fees. Month-to-month? Even better.
🚨 Why? If service sucks or your needs change, you don’t want to be stuck.
6. “Is There a Minimum Volume Requirement?” (Bad News for Small Fleets)
Some factors demand you factor $10K+ per month—fine for big fleets, brutal for owner-operators.
🚨 Why? If business slows, will you still meet their minimum—or pay extra?
7. “How Easy Is It to Submit Invoices?” (No One Likes Paperwork Headaches)
- Mobile app? (Snap a pic & upload)
- Email/online portal? (No faxing, please!)
- Automated systems? (The less manual work, the better)
🚨 Why? You’re a trucker, not an office clerk. The process should be simple.
8. “Do You Help with Broker Credit Checks or Collections?” (Less Stress for You)
Good factors will:
✔ Check broker credit (so you don’t get stuck with deadbeats)
✔ Handle collections (saves you from playing debt collector)
🚨 Why? Time spent chasing payments = time not spent hauling loads.
9. “Do You Specialize in Trucking?” (Not All Factors ‘Get’ Freight)
A generic factoring company might not understand:
✔ Broker payment quirks
✔ Load verification needs
✔ Common freight paperwork delays
🚨 Why? Experience in trucking = fewer payment hang-ups.
10. “Can I Talk to Your Current Clients?” (Real Reviews Beat Sales Talk)
Ask for references—or check reviews on:
✔ DAT
✔ Google
✔ Trustpilot
🚨 Why? If other truckers say they’re slow, sneaky, or unreliable… believe them.
Final Tip: Don’t Rush—Shop Around!
This isn’t just about getting cash fast—it’s about finding a partner that makes your business run smoother. Take your time, compare options, and choose wisely.
Need help comparing factoring companies? Let me know—I’ll help you line them up side by side. 🚛💨
(Now go get that money—without the headaches!)
