Finding the right freight factoring company can be a challenge. That’s why we’ve put together the five best options to help you pick the perfect fit.
Choosing whether or not to factor your loads — and if so, which factoring company to work with — is a pivotal decision for any trucker. After all, to enjoy the many benefits of factoring, you need to be sure you’re working with a company that meets your specific needs.
Before you decide which partner to work with, however, it’s important to fully understand what freight factoring means and what you should look for when considering the best freight factoring companies for your business.
What Is Freight Factoring?
Freight factoring is when the individual or operation that delivers a load sells their invoice to a factoring company. After collecting a small percentage, the factoring company pays the carrier for the invoice within as little as 24 hours. That means you get the money you’ve earned right away instead of having to wait a month or even longer for a broker to pay your invoice.
The most important point to remember when it comes to factoring is that this process is not lending. When a factoring company buys your invoice, it now owns that invoice and you are no longer responsible for it. Factoring lets you get paid for loads right away without needing to get a loan or incur debt to access the money you earned.
Your Guide to Choosing a Freight Factoring Company
There are a lot of freight factoring options out there, so it’s critical that you know what to look for when comparing the top factoring companies for trucking.
The biggest thing to consider is the reliability and trustworthiness of the company. A good way to determine this is by looking at Better Business Bureau® ratings and TrustPilot ratings and reviews. This helps ensure that you’re working with a reputable factoring company and it gives you some insight into what other carriers have experienced with the company.
Another aspect to consider is simplicity. The point of factoring is to get paid for your loads without having to wait or jump through hoops. You need a company that makes it easy for you to sell your invoice. Similarly, you should take a look at the factoring rates each company offers. Some companies take a larger percentage of your invoice than others without offering any benefits that make the difference worthwhile.
Finally, you should consider what the company’s customer service is like. Sometimes issues do come up — will your factoring company be ready and willing to help you or will they put you on hold for hours? Again, reading customer reviews can help you get a sense of a factoring company’s quality of service.
Best Factoring Companies for Truckers
With these key qualities in mind, here are the top freight factoring companies that any carrier should consider:
OTR Capital is a transportation-focused factoring company offering same-day payment on recourse and non-recourse programs accompanied by complete back-office support. Their invoice factoring system supplies carriers and brokers with a seamless billing and collecting experience. Thus, less time spent dealing with payment processes and more time spent making money.
OTR Capital provides a true non-recourse factoring program. The unique service, features, and benefits provide an exceptional experience.
- No chargebacks on cleanly delivered loads from approved brokers, not even after 90 days
- No monthly minimums, volume limits or credit restrictions
- Offers the most trustworthy flat factoring rates in the industry with no hidden fees and straight forward factoring programs
- Simple invoicing options online in our client portal and on your phone with the OTR Capital mobile app
- Get paid fast with same day invoice processing and instant funding through OTR BOLT, wire transfer, or ACH
- Dedicated account manager to handle all of your cash flow and back office needs
- Customized factoring programs to fit your business
OTR Capital has one last perk for anyone who uses the DAT load board. When you see a blue checkmark next to a load on the DAT board, this indicates that the client has been approved by OTR Capital. This means you know you’ll be able to factor the invoice without any issues.
Founded in 2011, Porter Freight Funding helps trucking companies of all sizes get access to consistent cash flow. In addition to its flexible factoring services — which have no long-term commitments or contracts — Porter Freight Funding offers a dispatching network with pre-approved brokers and shippers. The company also offers benefits like free fuel cards with advances and discounts.
Like many of the other companies on this list, Porter has overwhelmingly positive reviews. In particular, customers appreciate that every client works with their own personal representative who takes the time to learn their specific needs and goals.
In addition, Porter offers:
- Non-recourse and recourse factoring
- Free fuel cards
- Insurance quotes
- Compliance assistance
- Asset-based lending and AR financing
- A convenient dispatching network
RTS is another good choice for carriers looking for quality freight factoring as well as other services designed to help truckers succeed, like fuel cards. It has competitive rates overall and is known for great customer service. RTS also offers easy-to-use software that can help you manage various elements of your business.
Some of RTS Financial’s key service offerings are:
- Up to 97 percent of invoice value paid upfront
- Non-recourse factoring
- Fuel card program with a large credit line
- Equipment leasing
- Trucking-related software
- Accessible customer support via email, phone, and online chat
- Intuitive mobile app
RTS has a lot of positive customer feedback. In particular, customers often mention the company’s fast payments and low rates, as well as RTS’ app that allows you to process loads and check their status.
However, one challenge with RTS is that you can’t apply for the service online. This differs from most of the other companies on this list and means you will need to speak directly with a sales representative who will discuss your options with you. Many people find this to be inconvenient, which makes RTS an imperfect solution for them.
Apex has been around since 1995, which makes it one of the most established freight factoring companies you can find. It’s a standout factoring option that focuses on open communication and offering users quality service that always keeps them up-to-date about their invoices.
When it comes to customer feedback for Apex, the results are mostly positive. Customers highlight the speed with which their invoices are advanced and the helpfulness of their account executives. That can be particularly useful for new carriers who may lack the knowledge or experience to advocate for themselves and grow their business.
In addition to their great customer service, Apex offers a number of highlights including:
- Non-recourse and recourse factoring
- 2 percent flat rate on already billed invoices
- No fees for monthly minimum volumes
- No termination fees or hidden charges
- Free credit checks
- Fuel card discounts
- Convenient access to Apex’s online Account Management Portal (AMP)
- Mobile app
However, one disadvantage with Apex is that while you are under contract with them, you are required to factor all your invoices through the company. With Apex, you don’t have the freedom to choose which invoices make the most financial sense to factor and which ones you would prefer not to pay the percentage on.
Thunder Funding may be a newer factoring company, but that doesn’t mean it isn’t a great choice for carriers. One thing that makes this company stand out is that it is fully focused on freight. In fact, Thunder Funding was started by real truckers who understand first-hand the frustration of delayed invoice payments.
Thunder Funding offers the advantage of being upfront and transparent — the company will send you a full copy of the contract before you even sign an application. That means you get the full picture of Thunder Funding’s pricing before you make a commitment.
Plus, with Thunder Funding you get:
- Non-recourse factoring
- 2-4 percent rates on each invoice
- Same-day funding
- Free credit checks
- Fuel cards and fuel discounts
- 90 day, short-term agreements
The most significant drawback to Thunder Funding, however, is that at 2-4 percent its rates are a bit higher than most of the competition. However, it can still be a great factoring choice for many carriers.
The Top Factoring Company
There’s no denying that there are a lot of great options when it comes to freight factoring for carriers. It’s easy to get overwhelmed, but doing your research can help you make an informed decision.
The good news is that whether you’re comparing the top five or top 10 freight factoring companies, one company always comes out on top: OTR Capital. OTR Capital is more than just the industry leader, it’s also the most popular choice in terms of public opinion. From owner-operators to industry experts, customers have overwhelmingly positive things to say about factoring with OTR Capital. If you’re looking for a flexible, transparent, and trustworthy freight factoring company to help your business succeed, OTR Capital is the clear winner.