Category Archives: Invoice Factoring

Invoice Factoring Companies for Trucking

In B2B industries, such as logistics, the financial stability of one company often depends on the initiative of another to pay their invoice. When customers are late to pay, cash flow suffers, and essential expenditures – such as maintaining salaries and important equipment – are hindered.

In these cases, trucking companies often look for financial assistance elsewhere, such as a bank loan or invoice factoring. When cash flow is hurting and you need a reliable push to stabilize your business, invoice factoring is often the best option.

In the content below, we define invoice factoring, explore how the financing option works, and dive into the pros and cons for trucking companies!

What is Invoice Factoring?

Invoice factoring is the process of turning unpaid customer invoices into immediate cash. Once the invoice is officially paid, the seller reimburses the factoring company.

How Does Invoice Factoring Work?

Invoice factoring is a simple process. Invoices are sold to a factoring company for a discounted rate or factoring fee, putting working capital into the hands of the company at the needed time. Once the invoice is paid, the factoring company is reimbursed.

For example:

• Trucking Company A has an unpaid invoice of $1,000.
• Trucking Company A sells the invoice to a factoring company for a 5% fee of $50.
• Trucking Company A receives $950.
• When Company A’s customer pays the invoice, the factoring company receives $1,000.

While exploring invoice factoring options, two variations of invoice factoring should be considered: recourse and non-recourse.

Recourse Factoring

Recourse factoring places the responsibility of collection on the invoice seller (i.e. your trucking company). This means collateral is required. In many cases, recourse factoring companies use your receivables as such. Recourse factoring mimics the process of invoice factoring, and in turn, your company receives immediate cash for unpaid invoices. However, if the customer neglects to pay the invoice, the factoring company may collect the money from you.

As the seller, you are solely responsible for the invoices purchased by the factor and will be responsible for refunding the factor whether your customer comes through or not.

If the customer never pays your invoice, you are left in a similar position as when you first sold the invoice – in need of cash. Because of the risk associated with recourse factoring, businesses often prefer non-recourse factoring.

Non-Recourse Factoring

Non-recourse factoring places the responsibility of collection on the factor. If the customer does not pay, the non-recourse factoring company suffers the loss.

Additionally, this form of factoring does not demand collateral.

Is Invoice Factoring Right for My Trucking Company?

Invoice factoring is often utilized by businesses who work for other businesses – a customer base that doesn’t always pay on time. However, payment procrastination can hurt an organization with employees to pay, equipment to maintain, and growth opportunities to pursue.

For trucking companies, a stagnate cash flow could cripple the business. Although cash flow is important, invoice factoring might not be right for every trucking company. Consider the following questions:

1. Is your cash flow hurting?
2. Are you looking for growth opportunities, such as purchasing trucks or hiring employees?
3. Are you looking for a fast way to stabilize your business?

If you answered “yes” to any of the above questions, invoice factoring could be an excellent choice for your trucking company!

Invoice Factoring Pros

– Invoice factoring is an excellent option for trucking companies working for other businesses, especially those that procrastinate payments.
– As already mentioned, invoice factoring provides trucking companies with fast cash, improving cash flow immediately.
– Invoice factoring is easy to be approved for.
– Non-recourse invoice factoring is collateral-free.

Invoice Factoring Cons

– If working with a recourse factoring company, you may be required to buy back unpaid invoices.
– If your company works directly for consumers, invoice factoring may not be a viable option.
– Certain factoring companies tack on hidden fees to the factoring services, such as late fees or processing fees. Be certain to select a trustworthy factoring company and understand all the terms and conditions before moving forward!
– Because invoice factoring approval is based on the credit history of your customers, you don’t have full control of approval – it depends on the financial strength of your clients.

Is Invoice Factoring Different from Invoice Financing?

Invoice financing resembles recourse factoring, detailed above.

One financial resource states: “Instead of selling your invoices to a factoring company, you use the invoices as collateral to get a cash advance and you remain responsible for collecting payment on the invoices.”

Why Don’t I Just Get a Bank Loan?

Invoice factoring delivers almost immediate approval. With the right freight factoring company, you could get paid within three days. On the other hand, applying for and receiving a traditional loan could take weeks, if your company is approved.

Approval for factoring funding and loan funding differs significantly. For example, banks consider your creditworthiness and the ability to afford payments, while most invoice factoring companies consider the creditworthiness of your customers.

Often, factoring companies take business values into consideration as well. Is your trucking company well-managed and known for integrity? You’re likely to be approved for invoice factoring within a matter of days, regardless of credit history.

Advanced Commercial Capital: Trustworthy Non-Recourse Factoring

At Advanced Commercial Capital, we pride ourselves in being an honest, trustworthy non-recourse factoring solution for trucking companies in need of financial stability.

Our team would love to get in touch with your organization. To learn more about what we do, give us a call at 435.673.4655 or complete our online contact form!

Invoice Factoring Rates

A $5,000 freight invoice doesn’t always mean $5,000 in the bank. Factoring fees, advance percentages, and additional charges determine how much cash a trucking company receives after completing a load. For owner-operators and small fleets, those differences directly affect fuel purchases, payroll, and maintenance budgets. Comparing invoice factoring rates in 2026 starts with knowing what each percentage covers, how fees are calculated, and how seemingly small charges can affect the final payout.

How Invoice Factoring Rates Are Set in 2026

Advertised freight factoring fees can range from 1.95% to 4.0%, but the exact percentage depends on several factors. Factoring companies assess broker payment reliability and a carrier’s business activity when setting prices.

The main factors influencing invoice factoring costs include:

Monthly invoice volume: Carriers factoring more loads may qualify for lower rates.
Broker creditworthiness: Established brokers with reliable payment histories generally present less financial risk.
Payment terms: Invoices due within 30 days may cost less than those with 60-day terms.
Invoice consistency: Steady freight volume can lead to more favorable pricing.
Contract terms: Recourse arrangements and minimum volume commitments can affect overall costs.

How Advance Rates Change the Cash You Receive

An advance rate determines how much of an invoice’s value a trucking company receives upfront. Freight factoring companies may advertise advances of 97% to 100%, depending on the agreement and broker approval.

For instance, a 97% advance on a $5,000 invoice equals $4,850 upfront. The remaining $150 may be held in reserve until the broker pays, depending on the factoring agreement.

A higher advance increases immediate cash availability without necessarily reducing the factoring fee.

Flat Fees vs Tiered Fees: Which Costs More

Factoring companies typically use flat or tiered fee structures, which determine how much carriers pay based on broker payment timelines.

Flat-rate factoring charges a fixed percentage of the invoice, regardless of when the broker pays, within the agreed terms. Tiered factoring starts with a lower rate but adds fees when invoices remain unpaid beyond certain periods.

For example, a $5,000 invoice with an illustrative tiered pricing schedule might cost:

Broker Payment Time	Factoring Rate	Total Fee
30 days	2.0%	$100
45 days	2.5%	$125
60 days	3.0%	$150

Flat rates create predictable expenses, while tiered pricing may cost less when brokers consistently pay early. The better option depends on broker payment habits and the agreement’s billing periods.

Hidden Fees That Inflate Your Total Cost

A low advertised rate can become expensive once hidden factoring fees enter the picture. Before signing, carriers should compare these potential charges:

ACH and wire fees: Standard ACH may be free, although some providers list $5-$30 in transfer charges. Wire transfers commonly run $15-$30 per transaction.
Termination fees: Breaking a contract early may trigger penalties of hundreds or thousands of dollars, sometimes calculated as a percentage of remaining factoring commitments.
Origination or setup fees: Some companies charge upfront fees. altLINE, for example, has published a $150-$500 origination fee range.
Minimum volume penalties: Falling below monthly factoring thresholds may trigger a shortfall charge or minimum monthly fee, with the amount determined by the agreement.
Invoice processing fees: Verification or administrative charges may be assessed per invoice, so carriers should request the exact dollar amount.
Credit check fees: Customer credit reviews can cost $35-$100 under some published fee comparisons, while other providers include them at no charge.

On a $5,000 invoice, a $125 factoring fee plus $80 in additional charges brings the total to $205, or 4.1%, despite the advertised 2.5% rate.

Advanced Commercial Capital’s no-setup and no-termination-fee structure eliminates two potential expenses, while free customer credit checks eliminate another.

Why Freight Factoring Rates Beat Other Industries

Freight factoring often comes with lower fees and higher advance rates than other industries. Illustrative advertised ranges place transportation at 1.95–4.0% with 97–100% advances, construction at 3–6% with 70–80% advances, and healthcare at 2.5–4.5% with 85–95% advances. Actual terms depend on the provider and customer risk.

Freight companies benefit from established brokers with trackable credit histories, faster load completion, and standardized paperwork, including bills of lading (BOLs) and rate confirmations. These factors simplify invoice verification and can reduce underwriting risk for factoring companies.

A freight-specific factoring company may therefore have more competitive terms than a general business factor, particularly for smaller carriers.

Recourse vs. Non-Recourse: What Each Costs You

Recourse factoring typically comes with lower fees because the carrier remains responsible if a broker fails to pay. Non-recourse factoring generally costs more because the factoring company assumes certain credit risks, such as covered broker insolvency under the contract.

However, non-recourse freight factoring doesn’t cover every unpaid invoice. Freight disputes, missing paperwork, and other contract exclusions may still leave carriers responsible for repayment.

Compare pricing alongside the covered risks and exclusions to determine if the additional protection justifies the cost.

Real-World Example: Factoring a $5,000 Freight Invoice

Consider an owner-operator waiting 30 days for payment on a completed $5,000 load. A factoring arrangement with a 2.5% flat fee and 97% advance illustrates how much cash becomes available before the broker pays.

The $5,000 Freight Invoice Setup

The carrier submits the invoice for factoring to cover immediate operating expenses, including fuel and maintenance. Under this hypothetical agreement, 97% is advanced upfront, with the remaining 3% held until the broker pays.

This example uses a reserve-based structure. Advanced Commercial Capital does not hold customer funds in reserve.

Rate, Advance, and Same-Day Funding Math

Here’s how the numbers break down with a 2.5% factoring fee and no additional charges:

Transaction	Amount
Original freight invoice	$5,000
Initial advance (97%)	$4,850
Reserve held (3%)	$150
Factoring fee (2.5%)	$125
Reserve returned after broker payment	$25
*Total received by carrier*	*$4,875*

The carrier may receive $4,850 through same-day funding after invoice approval and verification. When the broker pays, the factoring company deducts its $125 fee from the reserve and returns the remaining $25.

What the Rate Actually Buys You

For a $125 fee, the carrier gains earlier access to funds that would otherwise remain unpaid for 30 days. That cash can go toward the next fuel purchase, payroll, or unexpected repairs.

Across multiple loads, faster payments can help small fleets maintain steadier cash flow between deliveries.

Get a Real Invoice Factoring Rate Quote From ACC

Advanced Commercial Capital offers flexible factoring services designed to help trucking companies access cash without unnecessary fees or long-term commitments. With no setup fees, termination fees, or reserves, carriers have fewer unexpected costs to account for.

Ready to see what factoring could cost your business? Apply for freight factoring today or call 855-465-4655 to discuss your options and receive a personalized quote.

Invoice Discounting vs Factoring

With the wide range of potential financing options available today, it can be difficult to know which is best for your business. Which option will serve all my needs? Which can I be approved for? Luckily, you do not have to make your decision alone.

Here, we will look at the specifics of invoice discounting and invoice factoring, comparing the two and describing some of the benefits or potential drawbacks of each. By the time you finish this blog, you will be well informed and well on your way to making the best decision for your business. Let’s get started.

Invoice Discounting

Invoice discounting allows business owners to better control the value of their unfinished sales. In invoice discounting, when an invoice is sent to your customer, a proportion of the total amount becomes available from the lender, providing a valuable source of working capital throughout the month.

While very similar to factoring, your customer may not be aware that you have taken on cash flow finance when you use the power of invoice discounting. You remain in control of your sales ledger, collecting payments as normal, and sending out reminders.

This system allows you to maintain your own style of communication and standards of customer service. In many cases, those factors are key to the success of your company.

Factoring

Like invoice discounting, factoring also allows you to turn your sales ledger into working capital. However, as stated previously, when you decide to pursue a factoring option, your customers will be aware you are using this method. The factoring company will be the one communicating with them, sending reminders for payment.

There are also significant benefits to factoring. Non-recourse factoring with Advanced Commercial Capital protects you from accruing debt. If your customers do not pay their invoices, you are not held responsible, and the factoring company takes on the risk involved.

Additionally, your ability to be approved for invoice discounting is dependent upon your own reliability and credit, whereas factoring companies such as Advanced Commercial Capital make their decisions based on the reliability and credit of your clients.

Which One Best Suits Your Needs?

Even with the differences laid out, it can still be difficult to know which is best for you. However, invoice discounting may be a promising option if:

• Your credit control procedures are proven to be effective
• You have minimal to no debt
• Your customers generally pay on time
• You meet the minimum level of turnover required by the lender

Conversely, if you do not carry out credit management processes in-house, invoice factoring is likely the better option.

Work with Advanced Commercial Capital

Advanced Commercial Capital is in the business of helping your business grow through fair and honest invoice factoring. If, after reading this blog, you would like to have a more in-depth discussion about your financial needs, including whether invoice factoring may be right for you, call our office at 855.465.4655 or fill out our online contact form today.

Payroll Factoring Guide for Small Businesses

In tough financial situations, such as a global pandemic, finding ways to make payroll and ensure your employees are taken care of may keep you tossing and turning at night.

However, there is a solution for every problem, and a financing option known as payroll factoring may be just the answer you have been looking for. Below, we’ll explore everything you need to know about what payroll factoring is and how it can help your business continue to thrive.

Payroll Factoring: What Is It?

Payroll factoring is a method by which businesses with outstanding invoices and long net terms can create a steady cash flow earlier than what they would normally expect from their clients. For example, if your net term is 30, or even 60 days, multiple payment periods can hit before you receive full payment from your clients.

Contrary to some beliefs, payroll factoring isn’t a loan, but rather a transfer of invoice from your business to another called a factoring company. The factoring company then supplies you with an advancement, allowing your business to continue operating smoothly.

Payroll Factoring Benefits

1. Avoiding Layoffs
Finding the right people for the right roles is never an easy task. You worked hard to create the team you have in place, and payroll factoring can help ensure that you can keep your team happily employed and motivated to stick with you.

2. Preventing Lawsuits / Additional Debt
Failing to pay your employees for their work will put you at risk for governmental tax penalties, lawsuits from your employees, and accruing additional debt. Payroll factoring ensures you can pay your employees on time and avoid these issues before they even start.

3. Preserve Your Savings
It is common for business owners to take a pay cut or dip into their savings to pay their employees when money becomes scarce. While an admirable decision, payroll factoring makes this particular sacrifice unnecessary.

How Payroll Factoring Works

While different factoring companies will have different policies, the general process is much the same. At Advanced Commercial Capital, we recommend first researching your options thoroughly to find a factoring company that fits your specific needs.

After you find someone whom you trust and can cater to your type of business, you will sign a factoring agreement. The stipulations, fees, and general guidelines will be something you should look over closely to ensure you are getting the best deal possible. After that agreement has been signed by both parties, the payroll factoring process will begin.

Finally, once your client pays the invoice, the factoring company will send you any remaining balances, known as the reverse amount.

Can Your Business Benefit from Payroll Factoring with Advanced Commercial Capital?

If you have a business with employees, then yes, payroll factoring will be beneficial for you, your employees, and the overall success of your business. Advanced Commercial Capital understands the strain that owning a trucking business with unpaid invoices can create, which is why we offer non-recourse freight factoring services.

Non-recourse factoring is designed to give you the maximum benefit possible from a factoring program, as our company bears the credit and collection risk on purchased invoices. This method of payroll factoring means that we won’t charge you if your customers fail to pay their bills.

Payroll Factoring FAQs

Is payroll factoring the same as a loan?
No. Payroll factoring is the sale of your unpaid invoices to a factoring company in exchange for an advance. There is no debt added to your balance sheet and no monthly loan payment.

How fast can I get funded through payroll factoring?
Once your account is set up, most invoices are funded within 24 hours of submission, giving you cash in hand well before your next payroll run.

What does payroll factoring cost?
Fees typically range from around 1 to 5 percent of the invoice value, depending on invoice volume, your customers’ credit strength, and whether the agreement is recourse or non-recourse.

Do my customers know I am using payroll factoring?
Yes. Because the factoring company collects payment directly from your customers, they will be notified to remit payment to the factor. Reputable factors handle this professionally and protect the customer relationship.

To learn more about our non-recourse factoring services, and to see if Advance Commercial Capital is the right support team for your trucking business, give us a call at 855.465.4655 or fill out our online contact form today.

Truck Driver Safety Tips

With an estimated 15.5 million trucks operating daily on roads in the United States, it’s important to keep your drivers safe (TruckingInfo.net). Training drivers to be safe and careful while delivering loads is key to growing your trucking business, as it can impact your company’s finances, fuel costs, and truck maintenance expenses.

Here are just a few of the trucking safety challenges for commercial drivers. Even if they seem routine or predictable, it’s important to make sure your drivers remember them.

Large Blind Spots

Limited visibility calls for extra caution in passing and being passed by other large vehicles on the road. Large trucks also need to maintain a longer following distance so they can see all of the vehicles behind them. Cars are often ignorant of the blind spots that trucks have, so it’s up to truck drivers to be vigilant about spotting where cars are moving. Extra side mirrors can be helpful in improving visibility.

Long Stopping Distance

Trucks traveling 65 miles per hour take up to two football fields to stop, so it’s important to have a ‘buffer zone’ in front to protect your drivers and your trucks. The more following distance in front of the truck, the more time drivers have to correct or slow down if other drivers cut in or stop suddenly.

Limited Maneuverability

The turning radius for a truck is 55 feet, so check for smaller vehicles that try to get by when you’re turning. Be aware of the impact a truck makes when accelerating, stopping, and maneuvering between lanes or making a turn. Slowing down significantly for curves and ramps is also a key point to remember – especially with a truck’s higher center of gravity.

Incentivize Safe Driving

To help ensure safe driving, many trucking companies offer small bonuses for driving without any speeding tickets or other citations for a certain period of time. By monitoring driving records – something you’re most certainly doing already – you can identify which drivers have earned bonuses or other rewards for their compliance.

The Financial Benefits of Safe Drivers

Training your drivers for better safety provides benefits not only for drivers, but for your trucking company’s finances.

Reduced incident rates decrease crash-related liability costs
Leveraging safety ratings to retain and hire more drivers
Better productivity by keeping drivers on the road
Lower insurance costs

Safe driving is good for your reputation, your finances, your drivers and their families. Additional FMCSA tips for CMV drivers can be found at: https://www.fmcsa.dot.gov/ourroads/tips-cmv-drivers.

3 Ways to Help Prevent Trucking Fraud

With the increase in use of digital technologies (many that we highlighted last month) unfortunately comes a surge of trucking fraud scams that are being run on companies.

One of the top swindles running rampant these days is deceptive soliciting. A person may call or send official-looking emails or letters posing as a representative from the Federal Motor Carrier Safety Administration. In these letters, they’ll claim to be citing you for various violations and associated fines. The scammers will usually do research on legitimate Department of Transportation regulations, so that their scams seem extremely real. They may ask you to pay extremely high fees, or demand that payment be made through specific wiring instructions. This should send up a red flag and prompt you to investigate the claim. This could be as easy as a call to the FMCSA.

Fraud Prevention for Trucking: What is Being Done?

The Federal Trade Commission has filed a number of lawsuits against companies who’ve scammed thousands of truckers with these deceptive practices. But unfortunately, there are still many people running this particular scam. Your basic carrier information is publically available when you submit an application or update your information with FMCSA. This can leave you open for these fraudulent companies to get your information and target you.

How You Can Avoid Scams:

Recognize imposters. Before you send any money or give out information in response to a request, contact the actual agency or business that the request has come from, to determine whether or not it is legitimate. You can also sign up for free scam alerts from the Federal Trade Commission at www.ftc.gov/scams. You can get great tips and advice about scams that are going on through these updates.
Know the rules. The FTC will never ask you for money. Also, the U.S. Government does not endorse private businesses or vendors, and the use of a service provider is NOT required by FMCSA. For example, one scam is designed to get trucking companies to sign up for their service claiming to easily pay your annual Unified Carrier Registration fees. However, their “service” will actually charge truckers for more payments and higher amounts than their actual fees should be for the year. Remember: you are NOT required to use third-party administrators to take care of your compliance fees.
Report fraudulent practices. You can help stop these deceitful practices and avoid becoming a victim of scammers who target truckers. File a complaint for any aggressive or misleading marketers to the Federal Trade Commission at www.FTC.gov/complaint. You can also report a fraudulent request for information to the Department of Transportation through the Office of Inspector General via https://www.oig.dot.gov/hotline.

For the health of your business, it’s important to become aware of the scams that plague the trucking industry. Check our Facebook and Instagramaccounts throughout the month to learn more about cons you want to avoid.

Trucking Technology: How to Grow My Trucking Company With the Latest Tech

After analyzing 2015 data, the Federal Motor Carrier Safety Administration reported decreases in both large truck injury crashes and large truck property damage crashes. One reason why these numbers are improving is because of new trucking technology.

Advanced collision mitigation systems, for example, have sensing technology to monitor for crashes and can take emergency action to avoid them. Using this technology can improve truck driver safety on the roads, but technology may also be used to help trucking companies when it comes to earning better profits for their business. You may want to consider some of the following ideas to determine if investing in technology in the trucking industry can help you grow your trucking company.

Trailer Tracking Trucking Technology

This type of system can offer real-time help with loss prevention, warning drivers of high-theft areas, and giving law enforcement data to recover stolen trailers. But it also provides companies the ability to look at the utilization and productivity of their trailers, to see whether or not they’re being maximized in use. The maintenance of trailers is another benefit to trailer tracking, as new systems can attach the maintenance data and records to a specific trailer, creating more consistent inspection plans for companies.

Dynamic Routing Technology

This technology aids efficiency by using real-time traffic and weather information to help drivers adjust to the best possible routes. This can increase profits by allowing trucks to use quicker routes, avoid major collisions, or detour around traffic congestion for more on-time deliveries. And of course, more efficient routes can mean better customer service and lower fuel costs.

While technology hasn’t completely solved many of the problems the industry faces, such as driver shortage and infrastructure issues, there are ways to use technology for your benefit. Taking the time to look at the latest options can help you determine what technologies might help your trucking business grow and succeed.

Throughout this month, our Instagram and Facebook posts will highlight additional technology advances, including transparent and efficient ways to bid for loads that match drivers’ availability and preferences. We’ll also take a look at other software developments that focus on better ways for truckers to make payments for fuel and freight transactions. Stay tuned to ACC on social media to learn more.

Positive Cash Flow For Truckers – The Fundamentals

positive cash flow for truckers

Trucking businesses have a lot of challenges when it comes to maintaining cash flow. You need to buy fuel, maintain equipment, and make payroll, all while trying to collect payments from customers – which doesn’t always happen on time. Finding ways to increase your cash flow isn’t easy, but there are several ways you can help keep it consistent and create positive cash flow for truckers.

Keep an Eye on Expenses

Whether you use accounting software or outsource to an accountant or bookkeeper, keeping a watchful eye on your financials can help you stay on top of your cash flow situation. The more accurate and up-to-date your accounting is, the more knowledge you’ll have of where money is being spent. You should be able to look at the numbers anytime – through your system or your accountant – and get an accurate picture of your financial situation. That knowledge can help you make the necessary adjustments to spending whenever needed.

Boost Your Income

Positive cash flow means your income exceeds expenditures at any given time. Aside from spending less, it obviously helps to have more money coming in. Consider what you can do to boost your numbers. For example, when was the last time you increased your prices? Are they comparable to what your competitors are charging? Consistent evaluation of your income and expenditures is the best way to find more cash flow.

Evaluate Your Equipment

Owning a single truck or a small fleet can be costly. Take time to audit the costs of your current vehicle situation. Are you able to pay a little more on your truck loans and pay them off faster? Are you thinking of expanding your fleet or purchasing new equipment? Weigh the cost of new equipment against what you’re paying to maintain what you have. Which is going to cost you less in the long run?

Use Non-Recourse Factoring

Most trucking companies have a similar pain – invoices not being collected in a timely manner – or sometimes not at all. Non-recourse invoice factoring means you get cash for invoices right away, giving you quicker access to the funds you need to pay for things like fuel and payroll, without worrying about collecting on invoices that may go unpaid. This can help ensure positive cash flow while you pay monthly bills and work on future growth.

Positive Cash Flow for Truckers: Create a Plan With Advanced Commercial Capital

Practicing sound cash flow fundamentals, your trucking business can meet its commitments both now and in the future.

What is Double Brokering Freight?

One of the worst things that can happen to your trucking company is to get scammed. Whether it’s a vendor, customer, or strategic partner, scams can bite you and your business right where it hurts – in the pocketbook.

What is Double Brokering Freight?

Double brokering is exactly what the phrase implies – a load that has been brokered twice. One of the most common fraudulent activities being perpetrated on truckers today is Fuel Advance Fraud, which is a form of ‘double brokering.’ This is when a fraudulent broker passes themselves off as a legitimate carrier, accepting freight from an unsuspecting broker or agent.

double brokering freight to avoid trucking scams

In many cases, the fraudulent broker signs up for a load that another broker has posted on a load board. Then, they re-post that load at a higher amount and hire a carrier to take the load – and take a fuel advance from the original broker. The fraudulent broker never pays the carrier, and the legitimate carrier who signed up to take the load ends up getting ripped off, while the scammer takes off with the fuel advance.

So, how do you avoid being double-crossed by a double broker?

Perform due diligence on all brokers. Call to check the credit of brokers. Look for variations in broker name, location, contact information, and billing information. Often these fraudulent brokers alter the documents they receive from actual carriers to convince victims that they are a part of a legitimate company.
Verify a carrier’s information with their Department of Transportation registration. If the phone number and address don’t match the information you’re given, that’s a big red flag.
Double check the broker’s rate. Use common sense and apply the old adage, “if it sounds too good to be true, it probably is.” A scammer posing as a carrier may accept a load for much less than the going rate to entice a broker into taking the deal. Or, a scammer may offer a carrier more money than originally offered by a broker to take advantage of someone who needs a quick payday.
Be aware of timing. Deals posted late in the week or at the end of the day are frequently made by fraudulent brokers. Why? Because they’re preying on truckers’ worries over not being able to schedule a load by a certain time. And anytime a broker seems in a rush to get you to agree, you should also be wary.
Check their Authority to Operate. Search FMCSA’s Safer and Fitness Electronic Records system website, https://safer.fmcsa.dot.gov/ to make sure the DOT/MC authority to operate number matches with what the carrier has submitted.

Spending time to validate and research necessary information about a broker is important to ensure that you’re not being scammed. Avoid becoming a victim of swindlers who are just looking to make money off a quick con.

Understanding Freight Invoice Factoring Rates

‘Low rates!’ ‘Risk-free!’ ‘Fast cash!’ ‘No upfront fees!’ These are just a few of the phrases you see when you search for invoice factoring rates. You might find a number of deals from factoring companies advertising low rates and quick cash flow. This sounds good on the surface, but there are often many details that aren’t disclosed upfront.

invoice factoring rates - smiling truck driver

All too often, factoring rates and deals that sound great at first end up being too good to be true. Many recourse factoring contracts come with fine print attached, putting you and your business on the hook for future risks. For example, when you sign a contract for recourse factoring, you assume the credit risk of the broker or shipper you are hauling for. This means you’re essentially gambling on the reliability of the factoring company, with no guarantees they’ll collect on your invoice. But because you’re locked into a contract on their terms, those unpaid invoices will again become your responsibility after the terms of the agreement expire (usually 60 to 90 days).

Low Factoring Company Rates: Understanding the Nitty Gritty Details

A lot of factoring companies advertise super-low rates to get more customers, but they don’t always clarify the details. For example, did you know there are many ways for those ‘lower rates’ to change? Typically, the lower rate is introductory and only good for a certain number of days. After that, the rate will rise incrementally, sometimes even daily – yikes! Also, after an additional number of days, you must use your hard-earned cash and buy the delinquent invoice back from the factoring company. Talk about an unpleasant surprise!

And there’s more. With some of these ‘low rate’ deals, you’re also locked into a contract of one or two years. These contracts are very difficult and sometimes very expensive to get out of. Unfortunately, such long-term agreements are hard to detect up front, because the contracts are so extensive and filled with confusing terms. As a result, you may not realize the full extent of what you’re accountable for.

Knowing the Bottom Line

When it comes to maintaining cash flow, factoring invoices at a good rate is a useful financial tool. However, since your main concern is the long-term health of your business, you want to avoid taking on unnecessary risk. To avoid damaging your business over time, consider non-recourse factoring with clear and reasonable rates, where you don’t become responsible for invoices that go unpaid. While non-recourse rates may be a bit higher upfront, you’ll avoid a lot of headaches, hidden fees and long-standing contracts – and that saves you money and hassle over the long haul.