Freight factoring rates are charged as a percentage of the invoice. At CFX that rate is 2% to 3%, and up to 98% of the invoice is advanced the same day your paperwork clears, with no reserve held back. Three things decide where inside that range you land: your monthly volume, how long the broker takes to pay, and which broker it is.
That is the short answer. The rest of this guide covers how the fee is actually charged, why a 98% advance is further from a 90% advance than it looks, what moves your rate, and what to compare when two factoring companies quote you.
What Is Factoring in Trucking?
Factoring is the sale of a freight invoice. You haul the load, you send the paperwork to a factoring company, and the factoring company pays you most of the invoice right away instead of you waiting for the broker. The factoring company then collects from the broker on the original terms.
It is not a loan. Nothing is borrowed and nothing is repaid on a schedule. You are selling an invoice you have already earned, at a discount, in exchange for getting paid now rather than in a month or more.
That distinction has a practical consequence: there is no debt on your books, and approval depends far more on who your brokers are than on your own credit history.
How Do Factoring Companies Work?
The sequence is the same at every factoring company. It takes about a day the first time and minutes after that.
- You deliver the load and get a signed bill of lading.
- You send the invoice, the rate confirmation and the BOL to the factoring company.
- The factoring company sends a notice of assignment to the broker, the legal document telling the broker to pay the factor instead of you.
- The paperwork is verified against the load.
- The money is funded to your account.
- The broker pays the factoring company 30 to 45 days later.
The notice of assignment is the piece most new carriers have not seen before. It is standard, it happens once per broker rather than once per load, and brokers handle them every day.
Getting started is a factoring application plus your operating authority and insurance documents. There is no long underwriting process, because the credit being checked belongs to your brokers rather than to you.
How Much Do Factoring Companies Charge?
The rate at CFX is 2% to 3% of the invoice.
On a $2,000 load at 3%, the fee is $60 and you receive $1,940. At 2%, the fee is $40 and you receive $1,960. Across 20 loads a month averaging $2,000, one percentage point of difference is $400.
That is the whole calculation. What complicates rate shopping is that the headline percentage is often not the full cost. Ask what else appears on the statement:
- Setup or application charges
- Wire fees, which CFX does not charge
- Monthly minimums
- Invoice upload or credit check charges
- Early termination charges
CFX prices at a flat rate with no separate add-ons and no monthly minimum. A carrier running four loads one month and forty the next is charged the same way in both. If you only want to factor selected invoices rather than everything you haul, that is spot factoring, and having no minimum is what makes it possible.
Advance Rate vs Reserve: The Part Carriers Miss
The advance rate is the share of the invoice you receive up front. Advance rates in trucking commonly range from around 80% up to the high 90s. CFX advances up to 98%.
The gap matters more than the percentages suggest, because of what happens to the remainder. At most factoring companies the rest is held as a reserve and released only after the broker pays, minus the fee. On a $2,000 load at a 90% advance, you receive $1,800 now and $200 sits with the factoring company for the next 30 to 45 days.
At CFX there is no reserve. The advance and the fee are two sides of the same number: a 2% rate is a 98% advance, a 3% rate is a 97% advance, and the transaction is finished when the money lands. Nothing comes back later and nothing needs chasing.
A reserve is not a hidden charge, and you do get it back. But it is money you cannot spend on fuel this week, and it is the most common reason a carrier's deposit is smaller than expected.
When Does a Factoring Company Charge You?
The fee comes out of the same transaction that funds you. You send a $2,000 invoice, the fee is deducted, and the balance lands in your account. There is no separate invoice for the fee later.
When you compare two factoring companies, ask both the same question: what lands in my account on a $2,000 load, and when do I see the rest? The answers are further apart than the rate sheets look.
What Moves Your Freight Factoring Rate
Monthly volume. More invoices through the same account costs less per invoice to service, and the rate reflects that. This is the one lever most carriers can predict in advance.
How long the broker takes to pay. A factoring company carries the money from the day it funds you until the day the broker pays, so 30 days of carrying costs less than 45. This is the driver that has moved most recently. Standard broker terms are 30 days, but a number of the larger brokers have been stretching toward 45. Freight concentrated with brokers on 45 day terms shows up in your rate at any factoring company.
Which broker. Factoring companies run credit checks on the brokers, not really on you. A broker with a long record of paying on time is a different risk than one with payment complaints and a short history, and a book of solid brokers earns a better rate than a book of unknowns.
Use that last point in your own favour. A broker credit check before you accept a load tells you whether you are about to haul for someone who pays, and CFX runs them free for its carriers. A quote given before anyone has looked at your broker list is not a real quote.
What Is a Factoring Agreement?
The factoring agreement sets your rate, your advance percentage, the term, and what happens when a broker does not pay. Four things are worth reading closely.
Length. The CFX standard term is one year, which is the industry norm. Month to month agreements exist, and it is worth asking rather than assuming.
What happens on an unpaid invoice. Under recourse factoring, the common structure, an invoice a broker never pays comes back to you after an agreed period. That period is in the contract and you should know the number before you sign.
How you leave. Notice period, any early termination charge, and how the letter of release is handled when the account closes.
What is billed separately. Written down, not described verbally on a call.
Does Non-Recourse Factoring Cost More?
Yes, generally, because someone is being paid to hold the risk. Under recourse factoring you remain responsible if a broker never pays. Under non-recourse, the factoring company absorbs that loss in defined circumstances, usually broker insolvency rather than any unpaid invoice.
Non-recourse is also narrower than most carriers assume when they first hear the word. The full comparison is here.
Do I Need a Factoring Company for Trucking?
Sometimes the honest answer is no. If your brokers pay you in fifteen days, you have cash to cover fuel and payroll through the gap, and you are not turning down loads because money is tied up, factoring costs you money for a problem you do not have.
It earns its keep when the gap between paying for fuel and getting paid for the load is what limits how many trucks you can keep moving. At 45 day broker terms, that gap is a month and a half of operating costs carried out of your own pocket.
Carriers often weigh factoring against a line of credit or a term loan. They are different instruments. A loan adds debt to your business, is approved against your credit, and is repaid on a schedule whether or not the broker pays. Factoring adds no debt, is approved mainly against your brokers, and settles when the invoice does. Which one fits depends on whether your problem is timing or capital.
Run your own number first. Take your average monthly invoiced amount, multiply by the rate, and compare it against what the wait is currently costing you in loads you cannot take.
How to Qualify for Factoring
Approval turns on your paperwork and your brokers rather than your credit score. A factoring company is looking at your operating authority and insurance, whether the loads are documented properly, and the payment history of the brokers you haul for.
New authority is workable. A carrier three weeks into their own MC number with two solid brokers is a more straightforward account than an established one hauling entirely for brokers with payment complaints.
How to Choose the Right Factoring Company
Put two offers next to each other and compare these, in this order:
- The advance percentage and the rate, together. One is meaningless without the other.
- Whether any part of the invoice is held as a reserve, and when it is released.
- Everything billed on top of the rate, in writing.
- Whether there is a monthly minimum.
- The contract length and the notice period to leave.
- The same-day funding cutoff, and whether it is actually honoured.
- Who answers the phone when there is a problem with a load.
The last one never appears on a rate sheet and it is the one carriers complain about most. A tenth of a percent is worth less than reaching someone who can fix a paperwork problem the same afternoon.
When Does Same-Day Funding Actually Mean Same Day?
At CFX the standard cutoff is 1 PM EST, and same-day funding runs until 4 PM EST. Funding through the CFX wallet is not tied to the cutoff in the same way, which matters if you are delivering in the evening or on the far side of the country.
Ask any factoring company for its cutoff in a specific time zone, and what happens to an invoice submitted after it. Same-day funding behind an 11 AM cutoff with no exceptions is a different product from what most drivers picture.
Can You Have More Than One Factoring Company?
Technically yes, practically it causes more problems than it solves, and most carriers asking this are really asking whether they can move to a better rate without disrupting the freight they are hauling now.
The obstacle is the notice of assignment. Each factoring company files one telling the broker where to send payment. Two factors filing conflicting notices on the same broker creates exactly the confusion you would expect, and payments go to the wrong place or stop entirely while it gets sorted out. Carriers who do run two factors split strictly by broker or by division and keep the split clean.
If the real question is switching, that is the next section.
How to Switch Factoring Companies
Staying somewhere that no longer fits because switching sounds like work is the most expensive kind of inertia. The process is smaller than it looks.
- Give notice under your current agreement.
- Get a letter of release from the outgoing factoring company.
- Sign the new agreement.
- The new factoring company files fresh notices of assignment with your brokers.
Outstanding invoices at the old factor are collected by the old factor on the original terms. The step that takes real time is the letter of release, which depends on how quickly the outgoing company issues it. Everything else runs in parallel, and most of it happens without you doing anything beyond signing.
Order matters. A new notice of assignment filed before the old release is processed makes brokers freeze payments to protect themselves from paying twice.
Before you start, pull your last statement and check four numbers: your actual advance percentage rather than the one you were quoted, your effective rate once every line item is added up, whether any reserve is being held, and what your agreement says about notice. If those hold up, stay where you are. If you have not looked at them in eighteen months, it is worth ten minutes.
Get Your Rate
A rate quoted without seeing your broker list is a guess. Send your volume and the brokers you run for, and CFX will tell you where you land in the 2% to 3% range and what your funding would look like in practice.
Start on the same-day factoring page. Fill in the form and someone calls you back.
FAQ: Freight Factoring Rates
How much do freight factoring companies charge?
Freight factoring is charged as a percentage of the invoice. CFX charges 2% to 3%, with the exact rate set by your monthly volume, how long your brokers take to pay, and the credit history of those brokers. Watch for costs outside the headline rate, such as wire fees, monthly minimums, setup charges and early termination charges, since those are what make two similar-looking quotes behave differently.
What advance rate should I expect from a factoring company?
Advance rates in trucking commonly range from around 80% up to the high 90s. The number that matters is what actually lands in your account, so always ask whether the remainder is held as a reserve until the broker pays. CFX advances up to 98% with no reserve, meaning the transaction finishes the day it funds.
When is the factoring fee charged?
At CFX the fee is deducted from the same transaction that funds you, so a $2,000 invoice arrives net of the fee and nothing is billed later. Structures that hold a reserve work differently: you get the advance now and the remainder, minus the fee, once the broker pays.
Is there a minimum volume for freight factoring?
Not at CFX. There is no monthly minimum, which means a carrier can factor four invoices one month and forty the next, or factor only selected invoices, without penalty. Minimums are common elsewhere and are worth asking about directly, because falling short of one usually triggers a charge.
How long is a factoring contract?
One year is the industry standard and is the CFX standard term. Month to month agreements are available in the market and worth asking about. Whatever the length, read the notice period and any early termination charge before signing, because those determine how easily you can leave.
Do factoring rates depend on which brokers I haul for?
Yes. Factoring companies run credit on your brokers rather than on you, so a book of brokers with long, clean payment histories earns a better rate than a book of unknowns. Broker payment terms matter too: freight concentrated with brokers on 45 day terms costs more to fund than freight on 30 day terms.
