{"id":18558,"date":"2025-08-09T07:33:21","date_gmt":"2025-08-09T14:33:21","guid":{"rendered":"https:\/\/www.dat.com\/resources\/?p=18558"},"modified":"2025-08-19T03:49:30","modified_gmt":"2025-08-19T10:49:30","slug":"what-is-freight-factoring","status":"publish","type":"post","link":"https:\/\/www.dat.com\/resources\/what-is-freight-factoring","title":{"rendered":"Freight Factoring 101"},"content":{"rendered":"

What is Factoring?<\/h2>\n

Factoring may seem like a complicated process, but it\u2019s actually quite straightforward. Whenever you deliver a load for a customer, you get an invoice for payment in return for your service. These invoices often take 30, 60, or even 90 days to be paid (which is the industry standard). The result is that you\u2019re left waiting months for payment for a service you already provided.<\/span><\/p>\n

Freight factoring<\/a> eliminates that waiting period and gets cash in your hand fast. Instead of waiting months for your invoices to be paid, factoring allows you to sell your accounts receivable to a factoring company in exchange for cash that\u2019s deposited directly into your account within hours of you submitting your paperwork. After that, it\u2019s up to the factoring company to deal with your customer and make sure they pay the invoice.<\/span><\/p>\n

This basic framework is true of all factoring, whether it\u2019s recourse or non-recourse<\/a>. The distinction between the two comes up later when it\u2019s time for the customer to pay the factoring company.<\/span><\/p>\n

How Does Freight Factoring Work?<\/span><\/p>\n

Quickly receiving the cash you earned sounds great, but how does the process actually work?<\/span><\/p>\n

Getting funds through a third party might seem like a complex and intricate situation requiring paperwork and inputs from many different parties, but it\u2019s actually quite straightforward.<\/span><\/p>\n

While the process may differ slightly in its specifics for each freight factoring company, these are the basic steps:<\/span><\/p>\n

    \n
  1. Provide the important details:<\/strong> Once you book a load from your customer, the freight factoring process begins. Start by sending the load details \u2014 including the rate confirmation and any other relevant information about the shipper \u2014 to your freight factoring company via email or fax.<\/li>\n
  2. Wait for a credit check to be completed:<\/strong> The freight factoring company will run a credit check on the shipper and let you know whether or not the party was approved. This check allows the factoring company to determine whether the shipper is likely to pay or if their credit history presents too high a risk.<\/li>\n
  3. Deliver the load:<\/strong> Once the broker is approved \u2014 whether they were pre-approved by the factoring company or they are approved following a credit check \u2014 you can deliver the load per usual.<\/li>\n
  4. Send key documents:<\/strong> Once you\u2019ve completed the job and unloaded everything, it\u2019s time to send another email or fax to the factoring company with documents related to the load, such as the invoice. Some factoring companies make this process even easier by offering an online portal and mobile app where you can upload the documents directly.<\/li>\n
  5. Receive payment:<\/strong> Within hours of receiving your documents and confirming the successful delivery, the factoring company will deposit some or all of the value of the invoice into your account (minus the small service fee that every factoring company takes, which is typically a small percentage of the invoice\u2019s full value). Essentially, the factoring company is buying the invoice from you. Once you get your money from the factoring company, you no longer need the invoice. The factoring company now owns it and will take care of getting the payment from your customer.<\/li>\n
  6. Keep moving:<\/strong> That\u2019s it! You\u2019re ready to pick up your next load, armed with the funds you need to keep moving.<\/li>\n<\/ol>\n

    While this process is fairly simple, it\u2019s even easier when you use a factoring company that\u2019s tied to your load board. In fact, when you do that, you can bypass these first two steps. For example, Outgo<\/a>, a DAT product, lets you see which loads and brokers have been pre-approved and eligible for factoring right from the load board. That means you\u2019ll know if you can factor each load you pick up before you even book it. That kind of peace of mind is incredibly valuable.
    \n<\/span><\/p>\n

    Start factoring your invoices today!<\/h3>\n

    With Outgo, you get transparent pricing, same-day invoice processing, and complete peace of mind.<\/p>\n

    Register with Outgo today<\/a> to control when and how you get paid!<\/p>\n","protected":false},"excerpt":{"rendered":"

    Freight factoring is a solution in which a business sells its accounts receivables (invoices) to a factoring company at a discount for payment within 24 hours.<\/p>\n","protected":false},"author":25,"featured_media":18857,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-18558","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":{"contentType":"13","enable_arrow_icon":"no_button","featured":"0","releaseDate":"August 9, 2025","solutionProduct":[],"segment":"carrier","segment_copy":["carrier"],"topics":[],"keywords":"","video_link":"","audio_link":"","header_button_shortcode":"[resource_assets_header_btn]","button_label":"Learn more about factoring benefits","internalUrl":"\/resources\/factoring-benefits","button_target":"_parent","secondary_optional_buttonheader":null,"button_label__detail_page_optional":"","button_link_detailsub_page_bottom_section":"","featured_image_detailsub_page_optional":"","pricing_box":[{"header_title":"Outgo, a DAT product","price_prefix":"Industry-leading funding speeds","price":"","price_suffix":"","features":"