What is factoring in trucking? Your first factored load, step by step
Company paycheck vs your first invoice
- As a company driver
- You drove, the carrier billed the broker and waited for payment, and your check came on payday no matter when the broker paid.
- On your own authority
- You bill the broker yourself, and payment often comes 30 to 60 days later. Factoring puts the carrier's old job, waiting for the broker, on someone else again.
Source: RTS, The Difference Between Factoring and Quick Pay (Oct 2022) · checked Oct 2026
The documents for each load you factor
Most invoices that get stuck are stuck on paperwork, not on the broker. Clear photos and matching numbers are what turn a two-day wait into a next-morning deposit. The usual set:
Rate confirmation
The broker's signed rate con, showing the agreed rate, the load number and any accessorials like detention or a lumper.
Signed bill of lading
The BOL with the receiver's signature, date and any notes. A clean signature with no shortage or damage notes is what makes it pay.
Your invoice
Many factors build it for you in the app from the rate con. If you write your own, the load number and amount must match the rate con.
Extras when they apply
Lumper receipts, scale tickets, detention sign-offs or a TONU confirmation, so the extra money gets billed with the load.
A habit that saves money: photograph the BOL at the dock, before you pull out, and check that every page is readable. A blurry signature can cost a day of funding.
Follow one EXAMPLE invoice from the dock to your bank
Tap a stop, or move the invoice on one step at a time. The card on the right shows how much of a $2,500 load has reached you at each step. Times are typical, not promises: same-day funding is common, and some brokers pay well before or well after 35 days.
- DeliveredDay 0
- Documents uploadedDay 0
- Advance paidDay 1
- Broker pays the factorDay ~35
- Reserve releasedDay ~36
Step 1: Delivered
The receiver signs the bill of lading. That signed BOL is your proof of delivery.
- Invoice
- $2,500
- Status
- Invoice ready to send
- Paid to you so far
- $0
EXAMPLE terms: 90% advance, 3% flat fee, broker paying in about 35 days. Yours will differ.
Where the fee comes from
The factor doesn't bill you separately. It keeps its fee out of the reserve when it closes the invoice. On the EXAMPLE load, $75 of the $250 reserve goes to the fee and $175 comes back to you. Flat transfer fees for ACH, wire or instant pay come off the advance.
What changes after the first load
The first invoice takes longest, because the factor sets up your account and sends notices to your brokers. After that, a broker the factor already knows is mostly a matter of uploading clean paperwork. Want to see the money side over a whole month? The fast pay overview has a cash timeline you can adjust.
Notice of assignment and verification, in plain words
The notice of assignment (NOA) is a letter from you and the factor to each broker. It says you've sold your invoices to the factor and that the broker must now pay the factor, not you. Brokers take it seriously: once a broker has the NOA, paying you instead can leave it on the hook to pay twice.
Behind the NOA sits a filing. Factors record a UCC-1 financing statement on your receivables, the public notice that they have a claim on those invoices. It's also why a second factor can't buy the same invoices until the first one releases its claim.
Source: UCC 9-109(a)(3) · checked Oct 2026
Verification is the factor checking that the load happened as invoiced before it pays you. For a broker it knows well, that may just mean matching your documents. For a new broker or a large invoice, the factor may call or email the broker to confirm the load was delivered and the amount is right.
Credit checks come before you book. A good factor lets you look up a broker's credit in the app, so you learn that a broker pays in 70 days, or won't be bought at all, before you haul for it. Make that lookup a habit for any broker you haven't worked with.
How a dispatcher fits in
When we dispatch your truck, we check brokers against your factor's approved list before a load reaches you, and send your factor's NOA with your carrier packet so the broker pays the right place from the first invoice.
What factoring is not
Not a loan, usually
You're selling something you already earned, not borrowing against the future. There's no monthly payment, and approval rests mostly on your brokers' credit. In the usual structure, a true sale, it doesn't show up as debt. Contracts with heavy recourse can be treated differently, so ask your accountant.
Source: FASB ASC 860, Transfers and Servicing · checked Oct 2026
Not free money
At a 3% rate, a carrier invoicing $20,000 a month pays the factor about $600 a month for speed and collections. Worth it when cash is tight; worth questioning once you have a cushion.
Not protection from every unpaid invoice
Even non-recourse usually covers only a broker that can't pay for credit reasons. A claim for damaged freight, a short pay or missing paperwork stays with you. Read what “covered” means before you count on it.
Ready to compare real offers? The best factoring companies page lays out published terms side by side.
How factoring works: questions
Factor your first load
We refer carriers to a factoring partner and may be paid for referrals. Disclosure
We refer carriers to RTS Financial and may be paid for referrals. Not financial, legal or accounting advice. Disclosure
No loads, nothing to factor.
Our dispatchers find and negotiate loads, then offer each one to you. 5% of gross, 7% while your MC is under 6 months.
What is a factoring reserve?
The part of the invoice the factor holds back when it pays your advance. If you get 80-95% up front, the rest sits in reserve until the broker pays the factor. Then the factor releases it, minus its fee and any charges. Ask how long reserves are held and whether a slow invoice can hold up reserves on other loads.
Is factoring the same as a loan?
Not in its usual form. You sell an invoice you've already earned, and the factor collects from your customer. There's no loan payment schedule and approval rests mostly on your broker's credit, not yours. Some contracts with full recourse can look more like a secured loan on paper, so ask your accountant how yours is treated.
Who collects from the broker?
The factor does. Once the broker has the notice of assignment, it pays the factor directly on its usual terms, and the factor's collections team follows up on late invoices. You still deal with problems you caused, like a missing signature or a damage claim, and under recourse you may have to buy back an invoice that's never paid.
How does freight factoring work step by step?
Deliver the load and get the BOL signed. Upload the rate con and signed BOL to the factor. The factor checks them, buys the invoice and sends your advance, usually within a day. The broker later pays the factor on its normal terms. The factor then releases the reserve to you, minus its fee.
How is the factoring fee calculated?
Usually as a percentage of the invoice: 2% to 3% is most common in 2026 (AtoB). A flat rate stays the same however long the broker takes; a tiered rate rises if payment runs past set days. Add flat extras like transfer fees or invoice minimums to see the real cost of each load.