Freight factoring—a.k.a. trucking factoring or transportation factoring—is a financial service where you sell your invoices to get paid immediately, instead of waiting for 30 to 90 days. This provides quick cashflow, keeping your business running smoothly between payments.

Freight factoring allows trucking companies to get paid immediately instead of having to wait for payment from their customers on loads they’ve already hauled. If you find yourself struggling to maintain a healthy cashflow, spend too much time dealing with invoice collection throughout the week, or need additional back-office support you’d rather not pay for, then working with a trucking factoring company is a worthwhile solution.

Freight factoring companies typically charge fees between 1% and 3% of the invoice value. As these charges can differ across companies and can come with different added benefits, it’s best to find a trustworthy factoring company that provides a reasonable rate for you.

Freight factoring allows truckers to receive fast payment for their invoices, as the collection of the invoice is managed by the factoring company. For providing this service, the trucking business pays a small percentage of the invoice value to the factoring company.

Freight factoring companies work with your customers based on your terms, to ensure that your invoices are collected in full and on time. Many truckers and freight companies use invoice factoring for their day-to-day operations, so most of your customers will already be familiar with factors and how to work with them.