If you run a trucking company, you already know the problem: you deliver a load today, but you might not get paid for 30, 60, or even 90 days. Meanwhile, you've got fuel to buy, insurance to pay, truck payments due, and drivers who need their paychecks. That gap between delivering a load and getting paid can make or break a trucking business.
Freight factoring solves that problem. Instead of waiting weeks or months for brokers and shippers to pay your invoices, you sell those invoices to a factoring company like CHC Factoring and get cash the same day you deliver. It's not a loan — it's your money, just faster.
How Does Freight Factoring Work?
The process is straightforward. Here's what happens when you factor an invoice with CHC Factoring:
- You deliver a load for a broker or shipper, just like you normally would.
- You submit the paperwork — typically the bill of lading (BOL) and invoice. You can do this from your phone or by email. It takes a couple of minutes.
- We verify the load with the broker or shipper. This usually takes a few hours.
- We pay you — typically the same business day. The money goes directly into your bank account.
- We collect payment from the broker or shipper when the invoice is due. You don't have to chase anyone down or deal with collections.
That's it. You keep driving, we handle the money side. No complicated process, no long applications, no waiting.
What Does Freight Factoring Cost?
Factoring companies charge a small percentage of the invoice amount — called the factoring rate or discount rate. At CHC Factoring, our rates start as low as 2%.
For example, if you factor a $2,000 invoice at a 2% rate, we'd pay you $1,960 the same day. The $40 difference is the factoring fee. In exchange, you get immediate cash instead of waiting 30-90 days, and you don't have to worry about collections.
Many truckers find that the cost of factoring is well worth it when you consider:
- No more cash flow gaps — you can take more loads because you have the fuel money and cash to keep moving
- No bad debt risk — with non-recourse factoring, if the broker doesn't pay, that's our problem
- No time wasted on collections — we handle all the follow-up and payment processing
- No debt — factoring isn't a loan. You're selling an asset (your invoice) that you already earned
Factoring vs. Bank Loans: What's the Difference?
A lot of trucking companies look at bank loans or lines of credit before discovering factoring. Here's why factoring is usually a better fit for truckers:
- No debt: Factoring isn't borrowing money. You're selling an invoice you've already earned. There's nothing to pay back.
- No credit requirements: Banks look at your credit score and financial history. Factoring companies look at your customers' credit. If the brokers you work with are reputable, you'll likely qualify — even with bad personal credit.
- Speed: Bank loans take weeks or months to approve. You can start factoring within a day or two of applying.
- Flexibility: With a loan, you get a fixed amount. With factoring, your funding grows as your business grows — the more loads you run, the more you can factor.
For a deeper comparison, check out our article: Freight Factoring vs. Bank Loans.
What Is Non-Recourse Factoring?
There are two types of factoring: recourse and non-recourse.
With recourse factoring, if the broker or shipper doesn't pay the invoice, you have to pay the factoring company back. You're still on the hook for bad debt.
With non-recourse factoring — which is what CHC Factoring offers — if the broker fails to pay, we absorb the loss. You keep the money we already paid you. This protects you from broker defaults and credit risk.
Non-recourse factoring gives you peace of mind. You don't have to worry about whether a broker is going to pay — that's our job to figure out before we accept the invoice.
Do I Have to Factor Every Load?
No. At CHC Factoring, there are no volume requirements and no minimums. You can factor one invoice a month or a hundred — it's entirely up to you. Some carriers factor everything because they like the consistency. Others only factor when they need a cash flow boost. It's your call.
What About Reserve Accounts?
Many factoring companies hold back a percentage of each invoice (usually 5-10%) in a "reserve account." They claim this protects against chargebacks or disputes, but it ties up your money.
At CHC Factoring, we don't hold reserves. When we pay you, you get the full advance minus the factoring fee. No money sitting in escrow, no waiting for reserve releases.
Can I Switch from My Current Factoring Company?
Yes. If you're currently with a factoring company and unhappy with the rates, service, or terms, we can help you make the switch. We've helped many trucking companies transition away from factoring agreements that weren't working for them.
We'll review your current contract, help you understand your options, and guide you through the transition process. Many carriers don't realize they have more flexibility than they think. Reach out to us and we'll take a look at your situation.
Who Qualifies for Freight Factoring?
Most trucking companies can qualify for freight factoring, including:
- Owner-operators with a single truck
- Small fleets with 2-20 trucks
- New carriers who just got their authority
- Carriers with bad credit — your credit doesn't matter, your brokers' credit does
- Companies switching from another factor
The main requirement is that you're hauling loads for creditworthy brokers and shippers. We'll check their credit when you apply — it's free and there's no obligation.
Get Started with CHC Factoring
Ready to stop waiting for payment? Applying takes about 2 minutes and there's no cost, no obligation, and no credit check on you. We'll review your information and get back to you quickly — usually the same day.