| Recourse | Non-recourse | |
|---|---|---|
| If the broker does not pay | The carrier buys the invoice back (buyback) or it is deducted from future payments | The factoring company absorbs the loss, usually only if the broker is insolvent |
| Fee | Lower | Higher |
| Watch out | The risk stays with you | Disputes (short pay, damage, missing documents) are still on you |
A broker pays $400 less because of damaged freight. The contract is non-recourse, but the factoring company deducts the $400 from the carrier. The reason: non-recourse covered only the broker's bankruptcy, not a dispute.
| Clause | What to check |
|---|---|
| Advance rate | How much you get right away (90–100%) |
| Fee | Flat, or tiered by days (e.g. 3% up to 30 days, +0.5% per extra 10 days) |
| Reserve | How much is held and when it is released |
| Minimum volume | A monthly minimum, and the penalty if you miss it |
| All invoices or selected | Full factoring (all invoices) or spot factoring (the ones you choose) |
| Term and exit | Length, notice period, automatic renewal, exit penalty |
| Buyback term | After how many days of non-payment you must buy an invoice back (often 60–90) |
| Hidden fees | Application, transfer, monthly, minimum and paper fees |
| UCC | The factoring company files a UCC-1 lien on your receivables |
A carrier wants to change factoring companies. The contract renews automatically for 12 months and requires 90 days' notice. Missing the deadline by two weeks keeps the carrier in the contract for another year. Put the notice date in your calendar the day you sign.
It depends on your brokers and cash. Recourse is cheaper if you work with reliable brokers. Non-recourse protects against a broker going bankrupt, but not against disputes.
Short pays, cargo damage, shortages, late-delivery penalties and missing paperwork. Ask the factoring company: "What exactly does it cover?"
When a broker does not pay within the period set in a recourse contract, the carrier repays the advance for that invoice, or it is deducted from future funding.
We follow up aging invoices before they hit the recourse window and resolve holds with your factoring company, so fewer loads bounce back to you.
CP GROW runs billing, factoring paperwork, aging-invoice follow-up and driver payroll for US trucking companies, from $29 per truck per week. Book a free 15-minute back-office review: we look at how your invoices move and show you where money gets stuck. No obligation.
This guide is one piece of the Billing, Factoring & Payroll course (58 lessons, English, Romanian and Russian, with real anonymized documents, examples, a final test and an AI assistant in every lesson). Theoretical course, $230, 12 months of access.
Not sure which back-office path fits you? Find Your Fit in Trucking ($50) compares dispatching, safety and accounting, and the $50 becomes credit toward a full course.