Brokers commonly pay in 30 days. Fuel, insurance and a truck payment do not wait 30 days. Factoring bridges that gap by selling your invoice at a discount for immediate cash.
Recourse vs non-recourse
With recourse factoring you repay the advance if the broker never pays, and rates are lower. Non-recourse shifts most of that credit risk to the factor at a higher fee, and only within their stated conditions. Read what is actually excluded.
What to compare between factors
- The discount rate and whether it is flat or tiered by payment speed
- Advance percentage and how any reserve is released
- Setup, wire, ACH, invoice and monthly minimum fees
- Contract length, volume commitments and termination notice
- Whether broker credit checks are included
Where delays really come from
Most funding delays are document problems: a missing signed rate confirmation, an illegible POD, or an invoice that does not match the rate con. Submitting a complete, correct package the same day you deliver is the single biggest factor in getting paid fast.
Do you need it?
If you have several weeks of operating cash in reserve, waiting 30 days may be cheaper than paying a discount rate. If cash is tight, factoring keeps the truck moving, just treat the fee as a real cost per mile and plan your rates accordingly.