Freight factoring has become a go-to solution for trucking companies and owner-operators looking to improve cash flow. But one of the most important aspects to consider when choosing a freight factoring company is the factoring rate. The rate you pay directly impacts your bottom line, so it’s crucial to understand what goes into freight factoring rates and how to find the best deal for your business.

In this blog, we’ll break down how factoring rates work, what influences them, and tips for finding the best freight factoring rate for your trucking operation.

What Are Freight Factoring Rates?

Freight factoring rates refer to the percentage of the invoice value that a factoring company charges for its services. These rates are typically expressed as a percentage of the total invoice amount and can range from 1% to 5% or more, depending on several factors.

Factoring rates vary depending on the type of factoring and the specific terms of the agreement:

Recourse Factoring: Typically offers lower rates since you are responsible for unpaid invoices if the customer doesn’t pay.

Non-Recourse Factoring: Rates are higher because the factoring company assumes the risk of non-payment.

What Affects Freight Factoring Rates?

Several factors influence the rate you’ll pay for factoring services:

Customer Creditworthiness

Factoring companies assess the creditworthiness of your customers (brokers and shippers). If your customers have a strong payment history, you’re more likely to secure a lower factoring rate.

Invoice Volume

The more invoices you factor, the better rate you may qualify for. Larger fleets often receive volume discounts, while owner-operators or small fleets may pay slightly higher rates.

Industry Experience

Established trucking companies with a track record of consistent operations and reliable customers are often eligible for better factoring rates compared to new businesses.

Funding Speed

Some companies charge premium rates for faster funding. While same-day funding is standard for many freight factoring companies, ultra-fast payments may come with a slightly higher cost.

Contract Terms

Long-term contracts may offer more favorable rates, while month-to-month agreements may result in higher fees. Be sure to understand the terms before signing an agreement.

Additional Services

Companies offering extra services, such as fuel advances, fuel cards, or back-office support, may include those costs in the factoring rate or as separate fees.

What Is a Good Freight Factoring Rate?

A “good” freight factoring rate depends on your business size, needs, and industry standards. Most trucking companies aim for rates between 1% and 4%.

When evaluating offers, compare not just the rate but also the overall value:

Are there hidden fees, such as application fees or cancellation fees?

Does the company provide perks like fuel discounts, load boards, or credit protection?

What’s the payment speed?

Sometimes, paying a slightly higher rate for comprehensive services and better support is more beneficial in the long run.

How to Find the Best Factoring Rate for Truckers

If you’re in the market for factoring services, here are some tips for securing the best freight factoring rate:

Shop Around: Compare rates and services from multiple freight factoring companies to find the best match for your needs.

Negotiate: Some companies are willing to negotiate rates, especially if you have high invoice volumes or established relationships.

Read the Fine Print: Look out for additional charges like funding fees, minimum volume requirements, or termination fees that can increase your overall cost.

Check Reviews: Research reviews and testimonials to ensure the company has a reputation for fair pricing and excellent customer service.

Ask About Perks: Additional services like fuel cards, credit checks, or dispatching support can add value beyond just the factoring rate.

Conclusion: Choosing the Right Freight Factoring Partner

Factoring rates are an essential consideration when choosing a factoring company, but they’re just one piece of the puzzle. Look for a partner that offers transparency, reliability, and services tailored to trucking professionals. The best freight factoring company for you will balance competitive rates with the tools and support you need to grow your business.

At Single Point Capital, we offer competitive freight factoring rates designed with truckers in mind. With no hidden fees, same-day funding, and dedicated support services like fuel discounts, free credit checks, and insurance down payment assistance we’re here to help you focus on what matters most—keeping your trucks on the road.