Start with your reason
Know why you want factoring: faster cash, credit checks on brokers, or help with collections. The reason decides which features matter. If you only need cash on a few loads, a flexible plan beats a long contract.
Checklist
- Total cost. Ask for the fee as a percentage and any extra charges such as wire, ACH or paperwork fees.
- Advance rate and speed. How much do you get up front and how fast?
- Recourse or non-recourse. Understand when you must repay for an unpaid invoice.
- Contract length. Look for minimum volume, early termination fees and auto-renewals.
- Broker credit checks. Does the factor tell you which brokers are safe before you book?
- Support. Can you reach a real person, and how do they treat brokers when collecting?
- Reputation. Check independent reviews and complaints.
Questions to ask before you sign
- What is my total cost on a $2,000 invoice that pays in 35 days?
- Are there monthly minimums or exit fees?
- Which brokers do you refuse to fund?
- How are disputes and short payments handled?
- Can I choose which invoices to factor?
Compare cost with your margin
Factoring fees come out of profit, so compare them with your break-even rate and typical Net 30 waits. If a fee drops your margin too far, consider quick pay on selected loads or a cash reserve. See how factoring works.
Related reading
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