Comparison
Factoring vs No Factoring: Real Cost Comparison
Compare invoice factoring against waiting on broker payment terms — fees, cash flow, and net impact.
Quick answer
Factoring costs 1.5–3% of gross but pays in 24 hours. No-factoring saves the fee but requires you to float 30–45 days of fuel and expenses.
| Attribute | Factoring Sell invoice for cash today | No FactoringPick Wait on broker net-30/45 |
|---|---|---|
| Cost | 1.5–3% of invoice | $0 |
| Cash in hand | 24 hours | 30–45 days |
| Working capital needed | Low | $15K+ per truck |
| Broker risk | Factor handles (non-recourse) | On you |
| Best for | New authority, tight cash | Established carriers with reserves |
Solo owner-op, $20,000 monthly gross
Factoring rate 2.5%. Working capital available $25K.
| Line item | Factoring | No Factoring |
|---|---|---|
| Annual fee impact | −$6,000 | $0 |
| Cash flow gap risk | None | Medium |
Once you have $20K+ in reserves, dropping factoring saves $6K/yr with manageable risk.
FAQ
Recourse vs non-recourse factoring?
Recourse is cheaper but you eat the loss on broker default. Non-recourse costs 0.5–1% more for that protection.
Can dispatchers replace factoring?
No — they're different functions. But strong dispatch lets you take loads from net-15 brokers and skip factoring.