Compare 12 Freight Factoring Offers

Finding a good factoring company is tricky. Most companies advertise a low rate (1%-2%) to attract interest, but they charge a variety of fees that cause the actual cost of their service to be several times higher.

Good companies and bad companies both do this, but there’s a tremendous difference between companies who are using low rates as a marketing strategy and those that are using it to sucker clients into predatory contracts. To figure out what kind of a company you’re working with, you’ll need to see the factoring agreement they write for you.

GOOD factoring agreements:

• Good factoring agreements clearly list all fees, in one location, in the most visible section of the contract (usually at the beginning, sometimes at the end)
• Good factoring agreements keep a record of the fees that the company has agreed not to charge you by listing them as NO CHARGE or FREE in the contract
• Good factoring agreements have reasonable fees that reflect the factoring company’s actual costs of providing that service

BAD factoring agreements:

• Bad factoring agreements make it difficult to find the fees and their costs by hiding them in various contract clauses, spread across multiple pages in a 15+ page agreement
• Bad factoring agreements don’t bother including fees that the company “doesn’t charge,” because if it’s not specified in the contract that the fee is NO CHARGE or FREE, then they can change their mind later and starting charging you in the future
• Bad factoring agreements charge fees at a much higher rate than the company’s own costs ($35 mailing charge for delivery that only costs $20)

Here’s a list of some of the most common fees that factoring companies charge. If you don’t see them specified in the contract, ask the factoring company to put them there so that they can’t be changed on you in the future. Even if they say, “Oh, don’t worry, we don’t charge for that,” have them add it to the list of fees with FREE or NO CHARGE written next to it.

Factoring Rate / Factoring Fee: this is the most obvious. It’s a percentage of the invoice that the factoring company will keep for themselves. Typically 2% – 5%.

Fund Transfer Fees: There are many different ways that factoring companies can send you your money. ComChek, T-Chek, EFS Fuel Card, Wire Transfer, and ACH are the most common transfer methods, each of which has its own cost, typically in the range of $5 – $30 per transfer.

If you want the least expensive way of getting paid, negotiate to have ACH transfers to your bank account listed as FREE in your contract. ACH transfers arrive in 1 business day and banks don’t charge for them, so there’s no cost that needs to be passed on to you.

Minimum Factoring Fee: companies want to make sure they’re getting a steady amount of invoicing from you. If the total value of the invoices you send them in a month/quarter/year falls below X amount (as specified in your agreement), they’ll charge you a fee just for being in their system.

The Minimum Factoring Fee is very negotiable, depending on your situation. You can generally get the company to either decrease the invoicing minimum, or decrease the fee. If the factoring company gave you a discount on their rate because you promised them $30,000+ per month in invoicing, you don’t have much room to bargain. But if the factoring company knows you’re going to be sending them less than $25,000 per month, they probably didn’t give you a discount on their Rate, so you can sometimes get the Minimum Factoring Fee changed to FREE on your contract.

Invoice Processing Fee: a flat fee for every invoice you submit to the factoring company. You can generally negotiate this to FREE, but watch out backdoor methods of hiding this fee inside Document Delivery Fees (discussed below).

Document Delivery Fee (FedEx, TripPack, Truck Stop Scanning, etc): some companies require you to submit physical copies of your bill of lading / proof of delivery documents. They’ll often specify that the delivery is sent on their account, in which case the fee will be specified in the factoring agreement. Some companies will jack up the fees above their actual cost of sending in these documents, which is essentially a backdoor method of charging you an Invoice Processing Fee. Don’t let them charge you more for document delivery than it would cost you to FedEx/TripPack/Scan them yourself.

The factoring companies featured on this page are paid partners, and TruckersReport may receive a commission if you become their client. Over 30 companies have requested advertising, and we've only accepted those that meet our highest requirements for customer care and good business practices.

We’ve also compiled a list of companies that have been vetted for great customer service and honest dealings with truckers, with a primary focus on owner operators and small fleets. Here’s a list of those recommended factoring companies.
For a broader list of companies, both good and bad, you can check out our factoring company reviews.

By Samuel Barradas.