If you’re growing a trucking business, you are probably familiar with its most frustrating paradox: You need to take on more loads to grow, but you don’t get paid to cover your expenses for up to 90 days. How do you grow your business with no cash, a fuel bill, and a truck payment due? Fortunately, there are two solutions: freight factoring and quick pay. You may have heard these terms before, but if you’ve ever wondered, “What is freight factoring? And how does it compare with quick pay?”, you’re not alone. Both put money in your pocket faster, but they function differently in application.
Here are the key differences and how to decide which is right for you.
What Is Freight Factoring?
Freight factoring is when a third-party company purchases your unpaid invoices from you at a slight discount. Instead of waiting 60 to 90 days to get paid, finally, you can sell your invoice to the factoring company and get paid much faster… sometimes in 24 hours.
Here’s how freight factoring works:
- You complete the delivery of your load.
- You submit your rate confirmation and Bill of Lading to your factoring company.
- You provide an invoice to your factoring company (or, if you’re lucky, the factoring company can make one for you).
- You get paid within days or even hours.
The process is intentionally quick and easy. For carriers running many loads in succession, it creates effortless, consistent cash flow that makes business growth possible.
What Is Quick Pay?
Brokers or shippers can offer quick pay. Like factoring, quick pay allows payments to be made faster—typically within 1–3 days—for a fee of 1–5% of the load’s value.
Though quick pay and freight factoring may appear similar on the surface, they cater to different needs.
Freight Factoring vs. Quick Pay: Side-by-Side
- Who you’re working with: Factoring is provided by a dedicated financial partner; a broker does quick pay on a load-by-load basis.
- Consistency: Factoring automatically enrolls you in seamless, faster payments; quick pay is more manual and can even become unavailable.
- Rates and fees: Factoring fees are usually lower than quick pay fees.
- Credit checks and collections: Freight factoring companies often provide credit checks and handle collections, insulating you from fraudulent activity and relieving you of administrative burden. Quick pay does not offer these services.
- Back-office support: Many factoring companies offer fuel advances, free credit checks, and online portals to manage invoices and provide the carrier with total visibility; quick pay is less transparent.
- Long-term relationship: Factoring companies operate as strategic partners to help carriers grow; quick pay is more transactional, typically terminating after a load.
So Which One Is Right for You?
If you only need to cover a few payments a month, quick pay is best.
If you’re determined to grow a trucking business, one with multiple loads, cyclical expenses, and a need for consistent income, freight factoring is the move. You’ll get paid faster, enjoy more support on the back end, and be yoked with a partner invested in your success.
The Bottom Line
To recap: What is freight factoring?
Freight factoring is a robust financial tool that transforms unpaid invoices into a long-term growth strategy. For businesses trying to grow, freight factoring is an essential utility.
If you’re ready to begin freight factoring with a company that offers fuel discounts, tire discounts, and renowned customer service, get started here.
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The England Carrier Services (ECS) division offers various services for carriers ranging from maintenance to support. As ECS members, carriers have access to nationwide discounts on fuel and tires from dedicated team members committed to finding the best price. ECS also provides factoring services with benefits such as same-day funding to a bank account or fuel card. These options allow carriers the freedom to focus on growing their business while saving time and money.