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How Does Invoice Freight Factoring Work?

Updated: May 21

If you're new to the trucking industry, or have just simply never used factoring before, you may not know how freight factoring works, or you might not even know what it is. Whether you already use or have used trucking factoring, plan to use it, or aren't interested at all, it is important to understand how it works and how it can benefit you and your business.


To some truckers, freight factoring is a value added and a safety blanket. To others, it is the reason they have been able to keep the doors to their trucking company open. Regardless of where you fall, knowing how freight factoring works is an advantage to you.


How does freight factoring work?

Freight factoring is how you get paid fast and provides your company with consistent cash flow. Typically, it can take anywhere from 30, 60, to 90 days to get paid for a load (this is different for truck drivers who have established relationships with direct shippers). It is very inconvenient to wait that long to get paid when your expenses don't pause with it. This is where the main benefit of freight factoring comes in; a freight factor eliminates the wait time and pays you a lot quicker - Porter Billing pays you the same day you send your bills in!


The freight factoring company buys the accounts receivables of the client so that they can get immediate cash upon sending their bills in (different factoring companies have different payment times, but it's always quicker than waiting for the shipper or broker to pay for the load). The process of freight factoring your bills is as follows:

  1. You book a load, get a rate sheet, and then get the BOL signed to confirm pick-up and drop-off of the load.

  2. Once you have dropped off the load, you send the BOL and rate sheet to your factoring company. When you factor with Porter, you simply take a photo and send them in.

  3. Your factoring company will advance you the cash minus the factoring fee. Porter Billing pays you the same day you send your bills in.

  4. Your client will then pay the factoring company for the load 30 to 90 days later.

This process may change depending on who you factor with, whether you sign up for non-recourse or recourse factoring, or if there is an advance rate. A factor will also approve you before you sign a contract to make sure you can work together and run credit checks on your clients to minimize the risk of working with debtors who fail to pay - this is another bonus for you as you will know who you should and shouldn't work with.


Consistent cash flow is key in being successful in the transportation industry. Especially in the current state of the industry, it's comforting to know that you will always get paid within 24 hours of sending your bills in.


When you work with Porter, you not only get fast payments, but we can also set you up with our network of dispatchers to find you freight and provide you with a free fuel card with discounts and fuel advances. We also have access to the best insurance quotes and compliance partners.



Now that you know how freight factoring works, lets see if we can work together. Leave your information in the form and one of our factoring specialists will be in touch. Or give us a call at (205) 397-0934.

2112 1st Ave. N. Birmingham, AL 35203

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