Choosing the right factoring company is crucial for freight brokers looking to maintain a healthy cash flow. With numerous options in the market, finding the best fit for your business needs can be overwhelming. This article aims to simplify your search by providing our top picks for the best factoring companies for freight brokers.
And when you’re finished reading, be sure to check out the other articles in our ‘freight broker factoring’ series:
- What is freight broker factoring?
- Is factoring for freight brokers worth it?
- Best factoring companies for freight brokers
Quicklook: 7 best freight broker factoring companies
- Best for one-hour advances: TAFS
- Best for customer service: OTR Solutions
- Best for non-recourse factoring: Nationwide Commercial Credit, Inc.
- Best for fast payments: eCapital -find factoring
- Best for flexibility: Porter Freight Funding -find factoring
- Best for invoice management: Triumph Business Capital -find factoring
- Best for 24/7 access: Apex Capital Corp -find factoring
How does factoring work for freight brokers?
Factoring for freight brokers is a financial practice that allows them to improve cash flow by selling account receivables to a third party, known as a factor. This is particularly beneficial in the freight industry, where brokers often face lengthy payment cycles from shippers and carriers.
By working with factoring companies for freight brokers, brokerages can get immediate cash for the invoices they issue. Doing so enables them to cover operational costs, pay carriers, and invest in growth without waiting the typical 30 to 60 days for payment.
The process typically involves the broker submitting invoices to the factor, which then advances a percentage of the invoice amount — usually around 80% to 90%. Once the shipper pays the invoice, the factoring company releases the remaining balance to the broker, minus a fee for their services. This arrangement offers immediate liquidity and helps brokers manage their credit risk since the factor often takes on the responsibility of collecting shipper payments.
Overall, factoring is a strategic tool for freight brokers to maintain cash flow, manage expenses, and stay competitive in a fast-paced industry.
When to consider freight broker factoring
Freight brokers might consider factoring when facing financial challenges like the following:
- Cash flow constraints: If you’re experiencing a cash flow bottleneck due to slow paying customers, factoring can provide immediate funds. This way, you can pay carriers and staff without delays.
- New business or rapid growth: For a new or rapidly growing business, traditional financing options may be hard to secure. Factoring offers a quick, relatively easy way to infuse your business with cash.
- Seasonal fluctuations: If your business is seasonal, you might face periods of reduced income. Factoring can help bridge the cash flow gaps during the slow months.
- Lack of access to traditional loans: Smaller companies or those with less than perfect credit may struggle to obtain traditional loans. Factoring companies usually focus on the creditworthiness of your clients, making it easier to qualify.
- High operational costs: Freight brokers often have high overhead costs, including equipment, maintenance, and staff salaries. Top freight broker factoring companies can provide the cash needed to cover these operational expenses.
- Large or unpredictable orders: If you receive a large or unexpected order and don’t have the immediate cash to fulfill it, factoring can provide the funds needed to meet the client’s requirements.
- Emergency expenses: Unforeseen situations like equipment breakdowns or other emergencies can disrupt your cash flow. The best factoring companies for freight brokers can offer a quick financial solution in these cases.
- Immediate investment opportunities: At times, you might come across growth opportunities that require immediate investment. Freight factoring for brokers can provide the cash needed to seize these opportunities without delay.
Best factoring company for freight brokers
TAFS
TAFS is a factoring company focused on building relationships with freight brokers to help support their long-term financial growth. With over 15 years in the business, TAFS understands the unique needs and insight brokers require to succeed in the industry — including the importance of 24-hour service. Having one of the best reputations of any invoice-factoring company, TAFS also provides a wide range of other trucking business solutions. Because of these features, no ‘best factoring company for trucking brokers’ list is complete without TAFS.
Best for: One-hour advances
Services
- Recourse and non-recourse factoring
- Open 365 days a year
- Strong partnerships that can result in higher-paying freight and discounts
- Fast turnaround, including a one-hour advance option
- Fuel discounts
Maximum funding: Not available
Discount rate: Not available
Expected annual percentage rate (APR): As low as 2.49% for single-truck companies
Advance rate: Up to 100%
Minimum annual revenue: No minimum qualifications
Funding time: Same day or up to 24 hours
Minimum credit score: No minimum qualifications
BBB rating: A
Special features
- One-day turnaround options
- Lets you help design a custom Quickpay program
Benefits
- Fast funding
- Positive industry reputation
Disadvantages: No upfront loan amounts and rates
OTR Solutions
OTR Solutions prides itself on its five-star rated customer service. They adhere to a ‘no voicemail policy,’ meaning whenever you call, they pick up. Each factoring client is assigned a full account team comprised of factoring experts who are familiar with you and your account. Instead of getting on-hold music and having to explain who you are using account details when you call, you’ll reach your account manager right away, who knows you by name.
Best for: Customer service
Services:
- Dedicated account management team
- True non-recourse factoring
- Industry leading load board and technology partnerships
- Easy invoicing via client portal and mobile app
- Dedicated account management teams
- Free credit checks
- Brokerage factoring programs
Maximum funding: $25 million
Discount rate: 1-4%
Expected APR: N/A
Advance rate: Up to 99%
Recourse factoring: Yes
Non-recourse factoring: Yes
Funding time: Same day funding
Minimum credit score: N/A
BBB rating: A+
Special features:
- Free 24/7 broker checks
- Also offers fuel card and premium banking services designed specifically for truckers
Benefits:
- Fast funding
- No chargebacks
- Easily accessible support
- Industry experience
- Access to lumper and fuel advances
Disadvantages: Rates are not available online
Pricing: Contact OTR Solutions for details.
Nationwide Commercial Credit, Inc.
Nationwide Commercial Credit, a newly established division of 1st Commercial Credit, is designed to provide non-recourse factoring services specifically for the transportation industry. It focuses on serving entry-level Class 6 to Class 8 trucking companies, as well as freight brokers and freight forwarders. Backed by a substantial $200 million credit insurance policy with Allianz Trade, Nationwide Commercial Credit offers robust financial solutions.
Best for: Non-recourse factoring services
Services:
- True non-recourse factoring
- Initial funding in 24 hours
- Free transportation management system
- Automated reporting
- Fuel card discount
- Immediate fuel advances at up to 50%
- 24/7 freight broker credit checks
Minimum revenue thresholds:
- Carriers: No monthly minimum, making it accessible even to single-truck companies
- Freight brokers: $50,000 per month
Maximum funding: Capable of providing up to $10 million in funding
Funding release speed: Known for releasing funds within hours of verification
Advance rate: Typically ranges between 97% and 98.5%
Discount rate:
- 2.5% to 3% for small fleets
- 1.5% to 2% for larger fleets
APR: Nationwide Commercial Credit operates with no interest charges
Special features:
- Offers formal freight broker credit approvals or denials in real-time
- Simplified process requiring no invoices; carriers can upload load confirmation and signed BOL for immediate funding.
- Fuel advances available after load pickup, with extended hours until 9 p.m. on weekdays and 3 p.m. EST on Saturdays
- Support from an extensive dispatcher network
- Competitive fuel card discounts
- Bilingual support with Spanish-speaking representatives available
- Flexible acceptance criteria, including low credit scores and blemished backgrounds
- Chapter 11 post petition factoring
Benefits:
- Clear, straightforward rates and comprehensive, white-glove service for entry-level carriers
- Transparent, hassle-free experience
Disadvantages: While funding is usually disbursed on the same day 80% of the time, there can be occasional delays extending to the following day, particularly with newly established brokers.
eCapital
eCapital is a good choice for freight brokers who are looking for a reliable and experienced invoice factoring company. Their Carrier Quick Pay program allows freight brokers to pay carriers within 24 hours of submitting their invoices, helping them to attract and retain the best carriers. They also offer flexible and competitive factoring programs, fast and reliable funding, and a number of other benefits that can help freight brokers to grow their businesses.
Best for: Fast payments
Services
- Instant transfers
- Line of credit and Visa card
- Fuel discounts
- Load board with built-in credit checks
Maximum funding: Not available
Discount rate: Not available
Expected APR: Not available
Advance rate: Up to 95%
Minimum annual revenue: None
Funding time: Almost immediately after invoice approval
Minimum credit score: None; approval is based on the creditworthiness of customers
BBB rating: A-
Special features
- Carrier Quick Pay Program
- Load board
- TMS system
- Line of credit
Benefits
- Quick financing decisions and funding
- Instant transfers, even after hours
- Other premium services and broker insights
- Money management system
Disadvantages
- No upfront pricing options or rates offered
- Must contact customer service for a quote
Porter Freight Funding
Formed in 2011, Porter Freight Funding is the factoring arm of Porter Capital. Through acquiring Decatur’s Resource Billing Services, Porter Freight Funding has nearly 100 years of cumulative experience in the transportation factoring sector. The company makes freight brokers’ lives easier by paying carriers as soon as they deliver a shipment. They offer a wide array of flat rate pricing, contract lengths, and payment terms, making them as one of the best factoring companies for trucking brokers.
Best for: Flexibility
Services
- Same-day factoring
- Dispatch
- Fuel cards
- Insurance
- Compliance
- Billing, invoicing and collections
- Credit checks
Maximum funding
- Low: $10,000
- High: $25 million
Discount rate: N/A
Expected APR: 1.5%
Advance rate: 90%
Funding time: Within 24 hours
Minimum credit score: N/A
BBB rating: A+
Special features
- Mobile app
- Dedicated account executive
- Fuel discounts
Benefits
- Same-day funding
- No monthly minimums
- Yearly, bi-annual or month-to-month contracts
- Dedicated client care
Disadvantages: May charge slightly more than other factors
Triumph Business Capital
Triumph Business Capital makes it easy for freight brokers to keep up with invoices with premium factoring services. The MyTriumph Web Portal simplifies the invoice submission process and gives clients access to credit checks on current or potential clients. It allows them to monitor and control their invoice factoring needs, and check the status of payments. Triumph also has excellent back-office support that can help chase clients for unpaid invoices so you don’t have to.
Best for: Invoice management
Services
- Recourse and non-recourse factoring
- MyTriumph online customer portal
- Insurance offerings
- Equipment financing
Maximum funding: Up to $20 million
Discount rate: 1% to 4% per month
Expected APR: 12% to 72%
Advance rate: Up to 90%
Minimum annual revenue: $100,000
Funding time: Up to seven days
Minimum credit score: 500
BBB rating: A
Special features
- MyTriumph online portal
- Ability to run free credit checks through MyTriumph
- High advance rate (90%)
Benefits: Maximum control over invoices
Disadvantages
- Not integrated with accounting software
- Slower funding time compared to competitors
- Origination fee
Apex Capital Corp
Apex Capital Corp stands out as a leading provider of 24/7 freight freight broker factoring and exceptional customer service. This reputable full-service factoring company specializes in helping companies maintain a consistent cash flow by offering services during nights, weekends, and bank holidays.
Apex Capital’s services are designed with the specific needs of freight brokers in mind. From competitive rates and quick funding to strong customer service, and perks like fuel discounts, they offer significant broker benefits for those seeking factoring services.
Best for: 24/7 access
Services
- Same-day and next-day funding
- Professional collections on factored invoices
Maximum funding: N/A
Discount rate: N/A
Expected APR: N/A
Advance rate: Between 80% and 90%
Funding time: Within 24 hours
Minimum credit score: N/A
BBB Rating: A+
Special features
- 24/7 factoring any time – even on nights, weekends, and bank holidays
- Pricing transparency
Benefits
- Great customer service
- No monthly minimum volume fees
- No long-term contracts
Disadvantages: Must process invoices through Apex Capital
You can’t go wrong with these factoring companies for freight brokers
Factoring for freight brokers can be a valuable financing tool in various situations. However, it’s important to weigh the costs and benefits during the selection process to ensure it’s the right freight payment solution for your specific circumstances.
In your company comparison, look for freight trucking broker reviews on service quality, factor pricing, and ease of invoice processing for any options you’re considering. After a careful company assessment and review of the entire factoring process, you’ll be able to find a brokerage factoring solution that’s right for you.
FAQ
Freight brokers pay factoring companies through a percentage fee taken from the total invoice amount. The fee is deducted when the freight brokerage factoring company advances the funds.
Determining the best factoring company depends on specific needs like rates, contract terms, and additional services offered. Research and customer reviews can help identify a company that best fits your requirements.
The time it takes for factoring companies to pay can vary but is often within 24 to 48 hours. Speed of payment is a key factor to consider when picking a factor.
Freight factoring can be worth it if you need immediate cash flow since it lessens the stress of waiting for customer payments. While there are fees involved, the ability to cover operational costs and pay bills promptly often outweighs these expenses. Ultimately, its effectiveness depends on your specific cash flow needs and business model.