Factoring
Understanding
Why should your brokerage factor?
Factoring is a powerful financial tool that allows freight brokers to unlock immediate cash from their unpaid invoices, instead of waiting 30, 60, or even 90 days for payment from shippers. By partnering with a factoring company, brokers gain quick access to working capital, enabling them to pay carriers promptly, cover operational expenses, and take on more loads without cash flow interruptions. This not only builds trust with carriers but also creates opportunities for business growth. For freight brokers looking to scale efficiently and maintain a steady financial footing, factoring offers a flexible, debt-free solution.
TFS works with different factoring companies, based on your specific needs and what stage your business is currently at. For example, a new brokerage, will need different support to an established brokerage that has an established income. Please use the form below to schedule a time to chat about your specific needs when it comes to factoring, marketing or business management.
1. What Is Factoring?
Factoring is a financial service where freight brokers sell their unpaid invoices to a factoring company for immediate cash. Instead of waiting on shippers to pay, the broker receives a large percentage of the invoice upfront. The factoring company then collects the payment from the shipper on your behalf.
2. Faster Cash Flow
Waiting 30, 60, or even 90 days for payment can stall your business. Factoring gives you access to funds within 24–48 hours of invoicing, so you can keep moving without delay. This steady cash flow is essential for covering fuel, payroll, and operational expenses.
3. Improved Carrier Relationships
Being able to pay carriers quickly keeps them happy and loyal to your brokerage. Factoring gives you the ability to meet payment expectations without juggling your receivables. When carriers trust you, they prioritize your loads and become long-term partners.
4. No Need for Loans
Factoring isn’t a loan—it doesn’t add debt to your balance sheet. There’s no interest to pay back, and approvals aren’t based on your personal credit score. You’re simply leveraging the money already owed to you for immediate use.
5. Credit Checks on Shippers
Factoring companies often run credit checks on your customers before advancing funds. This helps you avoid risky shippers who might pay late or not at all. It’s like having a financial safety net that protects your brokerage from non-payment.
6. Back Office Support
Many factoring providers offer administrative services such as invoicing, collections, and record-keeping. This reduces your workload and allows you to focus on growing your business. Their back-office help acts as an extension of your team.
7. Flexible Terms
Factoring agreements can be customized to your needs, with options like recourse and non-recourse factoring. You can choose the level of risk you’re comfortable with, and often scale your agreement as your business grows. This flexibility ensures you’re not locked into something that doesn’t fit your operation.
8. Scales with Your Business
As your freight volume increases, your access to funding increases as well. Factoring is directly tied to your invoicing, so the more you move, the more you can factor. It’s a financing option that grows alongside your business.
9. Supports Business Growth
With faster access to cash, you can take on more loads, add staff, and invest in better tools or marketing. You’re no longer limited by slow shipper payments or cash flow gaps. Factoring gives you the freedom to focus on growth instead of delays.
10. Peace of Mind
Knowing that your cash flow is consistent takes the pressure off your daily operations. You can plan ahead, pay your team, and handle unexpected costs with confidence. Factoring brings financial stability, letting you run your brokerage with peace of mind.
Subscribe to our Newsletter
Sign up for our weekly industry updates and market analysis.