In this guide
Brokers and shippers often pay in 30 to 60 days. Fuel, insurance, and your driver don't wait that long. Factoring bridges that gap — for a fee. Used well, it keeps your truck moving; used carelessly, it quietly eats your margin.
What factoring actually is
You deliver a load and invoice the broker. Instead of waiting weeks, you sell that invoice to a factoring company. They advance you most of it — often 90–97% — within a day, then collect from the broker and release the rest minus their fee.
Recourse vs. non-recourse
- Recourse: lower fees, but if the broker never pays, you buy the invoice back. You carry the credit risk.
- Non-recourse: higher fees; the factor absorbs the loss if a credit-approved customer goes out of business.
Read this twice. "Non-recourse" usually covers credit default only — the customer becoming insolvent. It typically does not cover disputes, chargebacks, missing paperwork, or rate disagreements. Non-recourse is not "we always get paid no matter what." Know exactly what your agreement covers.
The real cost math
Two numbers drive it: the advance rate (how much you get up front) and the factoring fee (the percentage they keep). Example on a $2,000 load at a 3% fee:
| Line | Amount |
|---|---|
| Invoice | $2,000 |
| Factoring fee (3%) | −$60 |
| You receive | $1,940 |
Whether that $60 is worth it depends on what waiting 45 days would cost you in stalled trucks and missed loads. Often it is — but only if the fee is honest and there are no extras stacked on top.
Red flags in a factoring contract
- Long lock-in terms with steep early-termination penalties.
- Monthly minimum volume fees you pay even in a slow month.
- Hidden add-ons: ACH/wire fees, invoice-upload fees, credit-check fees, "same-day" surcharges.
- Reserve games — money held back and slow to release.
- Tie-ins that force you into their fuel card or ELD to get the advertised rate.
How to choose
Ask every candidate the same questions: What's the all-in rate with every fee included? Recourse or non-recourse, and what exactly does non-recourse cover? What's the contract length and the cost to leave? How fast is funding, and what's the fee to get paid? Get the answers in writing.
How Ashton fits. We work with factoring partners and can make an introduction, but approval and terms are always the factor's decision — we never promise approval or a specific rate. Whatever you choose, you keep your authority and you're paid first.
Keep the trucks moving
We handle billing and the factoring bundle end to end — clean paperwork, faster funding, and you paid first.
Get started with Ashton