Factoring in Trucking: Is It Time to Bring It In-House?

In the world of trucking, cash flow can make or break a business. My husband is an independent motor carrier, and I’m in the process of building my freight brokerage. Together, we’ve seen firsthand how important it is to get paid quickly—and how tricky it can be when payments take 30, 45, or even 60 days to come in.

That’s where factoring companies come in. For years, we’ve relied on factoring to bridge the gap. And honestly, there are some real benefits:

• Payment within 24 hours keeps the truck moving.

• Factoring companies run credit checks on brokers and shippers.

• They organize billing and collections.

• And they take the stress out of chasing down payments.

  
  

For many carriers, factoring is the difference between making payroll and keeping the lights on, or not.

But after nearly a decade of working with a factoring company, we’ve also experienced the downside. Not long ago, a broker defaulted on payments to our factoring company. Instead of releasing the account so we could collect directly, the factoring company kept it tied up—and still charged us their fee. We were doing the legwork, but they were still getting paid.

That experience made us stop and ask: what are we really paying for?

It reminded me of fuel advances. When my husband first started driving, those advances felt like a lifesaver. But once we broke down the numbers, we realized how much money was disappearing in fees. Eventually, we stopped using fuel advances altogether—and it was one of the best financial moves we ever made.

Factoring is starting to feel the same way. If we took on in-house factoring—using a line of credit to advance our own invoices—we could save around $5,800 a year. That’s money we could reinvest into our brokerage, set aside for taxes, or put into equipment.

Of course, in-house factoring comes with responsibility. It means managing collections, staying disciplined, and keeping good records. But it also means more freedom and more money staying in our pocket.

For new carriers, factoring is often worth it. But for small trucking companies and brokers ready to scale, it may be time to rethink the model.

As we grow our brokerage, this is the path we’re preparing to take: moving away from traditional factoring and toward greater control over our cash flow.

Final Thoughts

Factoring isn’t “bad”—it’s a tool. Like any tool, it’s most valuable at certain stages. For us, it’s been a stepping stone, but now it’s time to graduate to the next level.

👉 If you’re a carrier or broker, what’s your experience with factoring? Are you sticking with it for convenience, or considering handling it yourself?