A broker usually pays 30–45 days after the invoice. Drivers are paid every Friday and fuel is paid today. Factoring closes that gap. It also takes over collections and tells you which brokers pay well, through credit checks.
| Step | What happens | When |
|---|---|---|
| 1 | The truck delivers; accounting checks the paperwork | Day 0 |
| 2 | Invoice + rate confirmation + POD go to the factoring company | Day 0–1 |
| 3 | Factoring checks the documents and the broker | Day 1 |
| 4 | Factoring pays the advance to the carrier | Day 1–2 |
| 5 | Factoring sends the invoice to the broker with its own "Remit To" | Day 1–2 |
| 6 | The broker pays the factoring company | Day 30–45 |
| 7 | Factoring releases the reserve (if any), minus the fee | After the broker pays |
| Term | Meaning | Usually |
|---|---|---|
| Advance rate | What you receive right away | 90–100% of the invoice |
| Fee | The factoring company's commission | ~1–5% of the invoice |
| Reserve | Held back until the broker pays | 0–10% |
Every contract has its own numbers. Many fees are tiered by days: for example 3% up to 30 days, plus 0.5% for every extra 10 days. A broker that pays on day 52 then costs 4.5%, not 3%.
Invoice $3,000, advance 90%, fee 3%, reserve 10%. Day 1: the carrier receives $2,700. Day 32: the broker pays $3,000 to the factoring company, which releases the reserve: $300 − $90 fee = $210. Total received: $2,910.
The Notice of Assignment (NOA) is a letter telling the broker that the carrier's invoices were assigned to the factoring company and must be paid only to its address. If a broker pays the carrier directly for an invoice that was already sold, that money belongs to the factoring company and must be forwarded.
| Factoring | Self-billing (direct) | |
|---|---|---|
| Money arrives | 1–2 days | 30–60 days |
| Cost | Fee per invoice | No fee, but your team's time |
| Collections | Done by the factoring company | Done by you |
| Broker credit checks | Included | You do them yourself |
| Best for | New or growing fleets, many new brokers | Fleets with 30–60 days of cash and reliable brokers |
Calculate the fee per month in dollars. 3% on $150,000 of invoices a month is $4,500 a month, $54,000 a year. That is the number to compare with the cost of doing collections yourself.
No. You sell an invoice the broker already owes. The factoring company collects it from the broker.
With recourse, if the broker does not pay, the carrier buys the invoice back. Non-recourse costs more and usually covers only the broker's insolvency, not disputes like short pays, damage or missing documents.
Usually within 24–48 hours of submitting a complete invoice before the factoring company's daily cut-off time.
Most holds come from three causes: missing pages, a poor scan, or a missing signature on the BOL/POD.
We verify RC, BOL and POD, submit invoices to your factoring company and chase every hold, so you get funded on time.
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.