Practical trucking insights. This article is general educational information; review the requirements of your operation and the terms of your particular contracts.
Recourse vs. Non-Recourse
Factoring is a necessary tool for many owner-operators to maintain cash flow, but the fees can eat into your margins. Understand the difference between recourse and non-recourse factoring. Non-recourse offers more protection if a broker goes bankrupt, but it comes with higher fees.
Hidden Fees to Watch For
Look out for ACH fees, invoice processing fees, and minimum volume requirements. A 2% factoring rate can quickly become 4% when all the hidden fees are added up.
Negotiating Your Rate
As your volume grows, your factoring rate should shrink. If you are billing over $20,000 a month consistently, you have leverage. Don’t be afraid to shop around or ask your current factoring company for a rate reduction.
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