If you are looking into freight factoring, one of the first questions is usually: what rate will I pay?
The short answer is that most factoring rates for trucking companies fall somewhere between 1% and 5% of the invoice amount. But the actual rate you get depends on several things — and understanding those factors helps you compare companies, avoid bad deals, and know when you are getting a fair offer.
Here is what actually affects your factoring rate and what to watch for.
How Factoring Rates Work
A factoring rate is the percentage the factoring company keeps from each invoice in exchange for paying you immediately instead of making you wait 30, 60, or 90 days for the broker to pay.
For example, if you factor a $2,000 invoice at a 3% rate, the factoring company keeps $60 and you receive $1,940 — usually the same day you submit the paperwork.
That is the basic math. But the rate itself is not the whole picture. How the rate is structured, what other fees exist, and what the contract terms look like all matter just as much.
What Determines Your Factoring Rate
Factoring companies look at several things when setting your rate. Here are the main ones:
1. Monthly Invoice Volume
This is usually the biggest factor. The more invoices you factor each month, the lower your rate tends to be.
A carrier factoring $10,000 a month will typically pay a higher percentage than one factoring $100,000 a month. Volume gives the factoring company more revenue per account, so they can afford to charge less per invoice.
If you are just starting out with lower volume, your rate may be higher — but it should come down as your business grows. Some companies will renegotiate your rate after a few months of consistent volume.
2. Average Invoice Size
Larger invoices often get better rates. A $5,000 invoice costs the factoring company roughly the same to process as a $500 invoice, but the revenue is ten times higher. That efficiency usually translates to a lower percentage for you.
If you run mostly short-haul loads with smaller invoices, expect your rate to be slightly higher than someone running long-haul freight with bigger tickets.
3. Broker and Shipper Credit
Factoring companies are not lending you money — they are buying your invoices. That means they care about whether the broker or shipper will actually pay.
If you work with well-known, creditworthy brokers, your rate will generally be lower because the risk of non-payment is small. If your brokers have weaker credit or a history of slow payment, the factoring company takes on more risk and may charge a higher rate to compensate.
This is also why most factoring companies run a credit check on your brokers — not on you. They want to know who is actually responsible for paying the invoice.
4. Contract Length and Terms
Some factoring companies offer lower rates in exchange for longer contracts. A 12-month commitment might get you a better rate than a month-to-month arrangement.
That can be fine if you trust the company and plan to factor consistently. But be careful — a low rate locked into a bad contract with expensive termination fees can cost you more in the long run than a slightly higher rate with no contract.
Always read the exit terms before signing anything.
5. Recourse vs. Non-Recourse
Non-recourse factoring means the factoring company absorbs the loss if a broker does not pay. Recourse factoring means you are on the hook if the broker defaults.
Non-recourse rates are sometimes slightly higher because the factoring company is taking on more risk. But the protection is usually worth it — especially if you work with brokers you do not know well.
Some companies advertise low rates but only offer recourse factoring. Make sure you understand which type you are getting.
6. Industry and Freight Type
Trucking and freight factoring is a specific niche. Companies that specialize in transportation usually offer better rates and faster service than general factoring companies that also handle manufacturing, staffing, or other industries.
A factoring company that understands trucking knows how brokers pay, how load verification works, and what normal payment timelines look like. That expertise usually means fewer problems and more competitive pricing.
Flat Rate vs. Variable Rate: Know the Difference
Not all factoring rates work the same way. The two most common structures are:
Flat Rate
You pay the same percentage on every invoice regardless of how long it takes the broker to pay. If your rate is 3%, you pay 3% whether the broker pays in 15 days or 45 days.
Flat rates are simple and predictable. You always know exactly what you are paying.
Variable (Tiered) Rate
The rate increases the longer the invoice stays unpaid. For example, you might pay 1% for the first 30 days, then an additional 0.5% for every 10 days after that.
Variable rates can look cheaper upfront, but if brokers pay slowly, the total cost can climb past what a flat rate would have been. They also make it harder to predict your actual cost each month.
For most owner-operators and small fleets, flat rate pricing is easier to budget around and avoids surprises.
The Rate Is Not the Only Cost
This is where a lot of carriers get tripped up. A company might advertise a low factoring rate but make up the difference with fees that add up fast.
Watch for these common hidden fees:
- ACH or wire transfer fees — charged every time you get paid
- Invoice processing fees — a flat fee per invoice on top of the percentage
- Monthly minimum fees — charged if you do not factor enough invoices
- Credit check fees — charged each time they check a broker
- Fuel advance fees — a separate charge for fuel advances
- Contract termination fees — penalties for leaving early
- Reserve holdbacks — a percentage held back from each payment, returned later (maybe)
A 2% rate with $15 per invoice in fees and a 5% reserve holdback is not actually 2%. Always ask for the total cost per invoice, not just the headline rate.
How to Compare Factoring Companies on Price
When you are shopping around, here is a simple way to compare apples to apples:
- Ask for the flat rate — or if it is variable, ask for the full tier schedule
- Ask for a complete fee list — every fee, not just the rate
- Ask about reserves — is there a holdback? How much? When do you get it back?
- Ask about the contract — length, minimums, termination penalties
- Calculate total cost on a sample invoice — take a real invoice amount and add up rate + fees + reserve impact
The company with the lowest advertised rate is not always the cheapest. The company with the lowest total cost per invoice is.
Can You Negotiate Your Rate?
Yes. Factoring rates are almost always negotiable, especially if:
- You have consistent monthly volume
- Your brokers have strong credit
- You are comparing offers from multiple companies
- You have been with your current factor for a while and volume has grown
Do not be afraid to ask. The worst they can say is no. And if you have a competing offer, most companies will try to match or beat it to keep your business.
What Is a Good Factoring Rate for Trucking?
There is no single "good" rate because it depends on your situation. But here are some general benchmarks:
- 1% – 2%: Very competitive. Usually requires higher volume or larger invoices.
- 2% – 3%: Solid range for most small fleets and owner-operators with decent volume.
- 3% – 5%: Common for newer carriers, very low volume, or companies with higher-risk brokers.
- Above 5%: Worth questioning. Make sure you are not overpaying or getting hit with stacked fees.
Remember — the rate only tells part of the story. A 3% rate with zero fees and no reserve can be a better deal than a 1.5% rate with $10 per invoice fees, a 5% reserve, and a 12-month contract with a $2,000 termination penalty.
How CHC Factoring Keeps It Simple
At CHC Factoring, we built our pricing to be straightforward. No guessing, no surprises, no fine print that changes the math.
- Rates as low as 2% — flat rate, not variable
- $0 reserve — we do not hold back any of your money
- $0 startup fees — no application fee, no setup cost
- No monthly minimums — factor when you want, not because you have to
- Non-recourse — if a broker does not pay, that is on us
- Same-day payment — submit your invoice and get paid today
The rate we quote you is the rate you pay. That is it.
If you want to see what rate you would get, request a free quote — it takes about two minutes and there is no obligation.