Freight factoring fee calculator
What a factored invoice really costs: cash today, fee, reserve, effective APR, and how it compares with billing the broker.
Filled with example values — replace them with your own numbers.
Fee structure
- Cash advanced today
- $2,700.00
- Factoring fee (3%)
- $90.00
- Reserve held back
- $300.00
- Reserve released after payment
- $210.00
- Total received from the factor
- $2,910.00 · cost $90.00 (3.00%)
- Effective APR of the advance
- 34.8%
- Billing the broker directly (Net-30)
- $3,000.00 after ~30 days · $90.00 more than factoring
How it is calculated
- Advance = invoice × advance %; cash advanced = advance − ACH/wire fee.
- Reserve = invoice − advance.
- Flat fee = invoice × fee %.
- Tiered fee = invoice × (base % + extra % × each started block of days after the base period). Example: 3% for 30 days, +1% per 15 days → paid on day 35 is 4%.
- Reserve released = reserve − fee.
- Effective APR = (fee + transfer fee) ÷ advance × 365 ÷ days until paid.
Some agreements charge the fee on the advance instead of the invoice, or add other fees; check yours. To see whether the load is worth hauling after the fee, use the cost per mile calculator.
Frequently asked questions
How does freight factoring work?
You sell a delivered load's invoice to a factoring company. It advances a percentage of the invoice right away and holds the rest as a reserve, collects from the broker, then releases the reserve minus its fee.
What is the difference between a flat and a tiered factoring fee?
A flat fee is one percentage no matter when the broker pays. A tiered fee starts at a base percentage for a set number of days and adds more for each further period until the broker pays. Your factoring agreement sets the exact steps.
How is the effective APR of factoring calculated?
(Fee + transfer fees) ÷ cash advanced × 365 ÷ days until the broker pays. It is a simple, non-compounded annual rate, useful for comparing factoring with a line of credit or other financing.
Is factoring cheaper than billing brokers directly?
No: billing directly you keep the whole invoice, but you wait for the broker's terms, such as 30 or 45 days, and chase the payment yourself. Factoring costs the fee in exchange for cash now and someone else collecting.
What is recourse vs. non-recourse factoring?
With recourse factoring you buy the invoice back if the broker does not pay within the period in your agreement. With non-recourse the factor carries the risk of the broker not paying for the reasons the contract names, usually the broker's insolvency.
freightline sends the factoring packet the moment a load is delivered
Invoice, rate con and POD go to your Telegram as one packet, ready for your factor, and each load's payment status is tracked with aging. Try it on your own trucks free for 30 days, no credit card.
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