Freight Factoring for New Carriers: Read the Contract Before You Sign

Factoring solves the 30-to-60-day cash gap between delivering a load and getting paid. For a new carrier without reserves, it can be the difference between taking a second load and idling. But the contract terms matter more than the headline rate.

Recourse vs non-recourse

Recourse factoring is cheaper, but if the shipper never pays, you buy the invoice back. Non-recourse protects you from non-payment but costs one to three points more and usually still excludes driver error or fraud. Most small carriers are better served by recourse plus a strict credit-check habit.

The terms that hide costs

• Minimum volume commitments that trigger fees in slow months.
• Termination clauses requiring you to factor every load for six or twelve months.
• Ancient fees: wire fees per transfer, invoice processing fees, and charges for same-day funding.

Compare against your cash cycle

If your shippers pay in 15 days, factoring may cost more than it returns. The full financing walkthrough with current rate ranges lives at Haul Handbook, the free trucking authority guide.

Last updated August 2026.