Factoring turns an invoice you'd otherwise wait 30-plus days to collect into cash within a day or two, in exchange for a percentage fee. For carriers managing fuel and maintenance costs weekly, that speed can matter more than the fee itself.
The math only works in your favor if the factoring fee is smaller than the cost of the cash-flow gap it solves, Which is why we recommend factoring selectively rather than on every single invoice.
Non-recourse factoring shifts non-payment risk to the factoring company, but it typically costs more. Recourse factoring is cheaper but leaves you responsible if a broker never pays.
We format and submit every invoice directly to a carrier's factoring company on the day of delivery, which is often the single biggest lever for getting funded faster. The paperwork delay is usually the real bottleneck, not the factoring company itself.
Written by David Kim
Finance & Factoring Advisor at JarveX Solutions
