Last Updated January 21, 2026
Turn your unpaid invoices into working capital for your business
After learning about what freight factoring is, the next step is to find out how much it factoring costs when you include all rates and fees associated with this alternative financing solution. Then, you can gauge whether or not freight factoring makes sense for your trucking company.
Continue reading to learn about what will determine your freight factoring rates and the average rates you should expect to find when shopping around.
Key Takeaways
- Trucking factoring rates typically range from 0.75% to 3.50%, with most advance rates falling between 99% and 100%.
- Exact freight factoring rates depend on factors such as customer creditworthiness, total monthly revenue, and invoice volume.
- When choosing a freight factoring company, watch for hidden fees like setup, maintenance, or processing charges, and compare providers to secure the fairest rates and reduce costs.
What Determines Trucking Factoring Rates
There are a variety of factors that influence trucking factoring rates. Some are within the business owner’s control, while others ebb and flow at the behest of the market.
Length of Time in Business
If your business is brand new, you may pay a higher fee than a long-standing trucking company. Just like you’re unlikely to be approved for a high credit limit at a young age, your new business is unlikely to pay the lowest invoice factoring fees.
Customers’ Creditworthiness
Regardless of how long you’ve been in business, if your customers have high credit scores and are reliable payors, you may be offered lower rates. That’s one of the major advantages of factoring – qualification isn’t dependent on your credit history, but rather your customer’s.
Total Monthly Revenue
If your company has a high volume of receivables, an invoice factoring company will have more faith in your ability to stay in business for the entire duration of your contract. Longevity is certainly indicative of creditworthiness, and lenders are quick to recognize companies in it for the long haul.
Length of Time It Takes Your Customers to Pay
If your clients have a history of racking up past-due bills or waiting until the absolute last day of their payment term to pay, your company will likely experience a higher factoring rate. Contrarily, if they’ve proven reliable in the past, a factoring company like altLINE will take this into consideration and potentially lower your rates.
To improve your trucking company’s cash flow, you need to weigh your options, and even though freight factoring might slightly cut into your profit margins, trucking business owners greatly benefit from the cash advance. Plus, it alleviates the stressors that come with waiting weeks for payment and having to figure out how to politely ask for payment if it’s past-due.
With factoring, representatives from the factor will communicate with your clients regarding payment requests, which takes even more off your plate.
How Much Do Freight Factoring Companies Charge?
Generally, freight factoring rates fluctuate between 0.75-3.50%. Remember, your rates will depend on factors such as:
- Total monthly revenue
- Volume of factored receivables
- Customers’ credit history
Freight factoring rates are flat rates, which isn’t always the case for factoring across other industries. The total cost associated with freight factoring also depends on your provider’s fee structures.
Since profit margins can be particularly slim in the trucking industry, the slightest of differences in rates can be especially impactful. Saving every dollar possible is crucial. Therefore, good and honest lenders will do everything they can to offer you the fairest freight factoring rates and fees for your business.
According to Jennifer Fink, altLINE Freight Factoring Operations Manager, the more reliable your customers are and the more proven revenue streams you have, the better chance your rates will be at the lower end of this spectrum.
“Factoring companies care about your customers’ credit history, not your own,” said Fink. “If your debtors aren’t paying on time, that’s going to be reflected in your rates. With that said, we will do a thorough background check on your debtors to ensure we are taking everything into consideration and we’re offering our clients the fairest rates possible.”
These rates ebb and flow depending on the market as well, which can get competitive. Bank factoring companies will be able to offer more competitive prices than independent companies.
Freight Factoring Advance Rate
The factoring advance rate in the trucking industry will fall between 99% and 100%. This means that nearly the entire value (if not all) of your outstanding receivables will be sent to you immediately once your factoring company receives each invoice. This is much higher than other industries because factoring companies understand that margins are particularly thin in the freight world. Trucking companies need cash as fast as possible.
Beware of Hidden Fees
Hidden or unnecessary fees can produce ire in even the most level-headed business owners. When you’re shopping for potential freight factoring companies and negotiating rates, watch out for any of the following additional fees:
- Setup fees
- Maintenance fees
- ACH, wire transfer, or direct deposit fees
- Invoice processing fees
Clarify with your factoring company whether these potential fees are included in the offered rate or not and double-check before putting pen to paper that all of this pertinent information is included in the factoring agreement.
Interested in Factoring?
Turn your unpaid invoices into working capital so you can keep growing your trucking business.
In-Summary: Freight Factoring Rates
Freight factoring can provide a boon to your company’s cash flow when you need it most. While you have to consider if your business is likely to pay an affordable fee based on your creditworthiness and shop for a provider with low fees and limited additional fees, freight factoring has proven a fantastic working capital solution for trucking businesses who are in need of alternative financing for a cash flow boost.
Grey was previously the Director of Marketing for altLINE by The Southern Bank. With 10 years’ experience in digital marketing, content creation and small business operations, he helped businesses find the information they needed to make informed decisions about invoice factoring and A/R financing.
