What documents do I need to start factoring?

Usually your MC and USDOT numbers, a W-9, your certificate of insurance naming the factor where required, a voided check or bank letter, your driver's license and the signed factoring agreement. For each load you then send the rate confirmation, the signed bill of lading and your invoice. Have digital copies ready before you call.

What if my insurance is not showing yet?

Most brokers and factors check that your authority is active and your insurance is on file with FMCSA before they will work with you. If your insurer has just filed, it can take a few days to appear. Ask your agent to confirm the filing and send a certificate, and wait for the record to update before booking loads.

How long does factoring setup take?

Often a day or two once you have sent every document, though it varies by factor and by how quickly you answer questions. The factor checks your authority, insurance and any prior claims on your receivables, then sends notices of assignment to your brokers. Start the setup before your first load delivers, not after.

Can I factor my very first load?

Usually yes, if your account is set up, your authority and insurance are active, the broker is one the factor approves and your paperwork is complete. Factors price on your brokers' credit more than your history, which is why new carriers can factor from the start. Check the broker with the factor before you book.

Should a new carrier sign a long factoring contract?

Be careful. Your volume, lanes and needs will change in the first year, and a long term with high minimums can cost you when they do. Prefer month-to-month terms, low or no minimums and the freedom to factor only some brokers. A slightly higher rate is often worth the flexibility for a new MC.

Factoring Companies for New Trucking Companies: First Loads

Why the first 60 days are hard

A new authority pays almost everything before it earns anything. Insurance down payments, plates and registrations, the first tanks of fuel, and for specialty carriers, permits, tank washes or higher cargo coverage. Federal liability minimums are only the start, and many brokers and specialty shippers require more. Then the first broker payment arrives 30 days or more after the first delivery. Factoring turns those first invoices into cash within about a day; RTS Financial states it advances more than 90 percent within 24 hours.

When not to factor yet

You have enough cash to cover two months of costs while you wait for the first payments.
Your first customers pay fast, such as a direct shipper on short terms.
The only offers you get have long terms or high minimums you can't be sure of meeting.
You don't have loads yet. Factoring pays for invoices; without booked freight it does nothing.

If none of those apply, factoring the first months is often the difference between running and parking. See is factoring worth it.

The first-load packet

Rig card · first factored invoice

Rate confirmation signed by you, with the load number, rate and any extras.
Bill of lading signed by the shipper at pickup and the receiver at delivery, every page.
Your invoice with the factor's remit-to address, the load number and the exact rate con amount.
Receipts for anything the broker reimburses: lumpers, scales, permits.
Approval for detention or layover, in writing from the broker.

Common delays: a missing receiver signature, the broker's address instead of the factor's on the invoice, an unreadable photo of the bill of lading.

What factors ask a new MC

Authority and insurance: active MC and USDOT numbers, with insurance on file.
Company documents: W-9, business registration and bank details.
Prior claims: a check that no lender already has a lien on your receivables, for example from an equipment loan.
Your brokers: who you plan to haul for, so the factor can check their credit.
Identity: the owner's ID and contact details.

Because factoring is based on your customers' credit rather than your balance sheet, a thin personal credit file is usually less of a barrier than it would be for a bank loan.

First invoice mistakes

Missing signatures. The receiver must sign the bill of lading; a blank line can stop funding.
Wrong remit-to. Once you factor, invoices must show the factor's payment address, not yours.
Unreadable photos. Flat, well-lit, every page, every corner.
Amounts that don't match. The invoice must equal the rate con, plus only approved extras.
Unapproved brokers. A load for a broker the factor won't buy can't be funded.
Late submission. Send it the day you deliver; RTS Financial states carriers can upload in its app and get paid the same day.

Worked example: the first month EXAMPLE

A new hotshot authority starts on the 1st with $4,000 in the bank after insurance and registration. It runs nine loads in the month for $13,500. Fuel, a hotel night and a tire take about $5,800. Without factoring, the first broker payment lands around the 5th of the next month, and the truck would have sat for a week waiting for cash after the second load. Factoring each invoice at 3% costs $405 for the month and keeps every load moving. The carrier plans to build a reserve over the next four months, then factor only its slowest brokers.

Fuel advances for the first loads

The first loads are when cash is tightest, and a long run can need a full tank before anything is paid. Some factors offer fuel advances: part of the load's rate paid at pickup once you send the rate confirmation and the signed bill of lading. It comes off the invoice later, and it may carry a fee. Ask whether new authorities qualify from day one and how much of a load can be advanced. See fuel advance factoring.

New specialty authorities

Specialty carriers feel the first months more than most. A new car hauler pays for high cargo coverage before the first car is loaded. A new heavy haul carrier fronts permits and escorts on every move. A new tanker carrier may pay for washes and still wait to be approved by shippers. A new hotshot runs more, smaller invoices, where per-invoice fees matter. In each case, ask the factor how it handles your kind of paperwork: vehicle inspection reports for cars, permit receipts for oversize, wash tickets for tanks.

A 90-day plan

Before the first load: authority active, insurance on file, factoring account set up, broker list checked.
First month: factor every load, submit paperwork the day of delivery, track every advance and fee.
Second month: set aside part of every advance toward a reserve, and drop brokers who pay slowly or dispute often.
Third month: review the real cost of factoring, compare quotes, and decide whether to keep factoring everything, only slow payers, or nothing.

A new authority that plans its exit from factoring from the start usually gets there sooner, because every load is judged on what it leaves after the fee.

Brokers and new authorities

Some brokers won't load carriers whose authority is only weeks old, whatever their factoring setup. That is a load-finding problem, not a factoring one, and it is why the first loads often come from brokers who work with new MCs, at rates that reflect the risk they take. Check each new broker's payment record before booking; RTS Financial offers a broker check to see which brokers pay.

Keeping your records from day one

Start a simple file for every load from the very first one: rate confirmation, bill of lading, invoice, the factor's funding notice and the reserve release when it comes. Keep a running list of open invoices with the date each was funded and the date the broker paid. After a month you will know which brokers pay in 25 days and which take 50, which tells you where factoring earns its fee and where it doesn't. That list is also what you need when you ask for a better rate later, and what your accountant will want at year-end.

Choosing a factor as a new MC

Ask for month-to-month terms or a short trial period.
Avoid minimums you can't meet in a slow month.
Ask whether you can factor only some brokers.
Check whether fuel advances are available, and what they cost.
Get every fee in writing, then work out a typical month in dollars.

Compare at least two quotes on the same terms; see factoring rates and how factoring works.

Red flags in a new MC offer

A contract of a year or more with a large fee to leave early.
A monthly minimum higher than you are sure to invoice in your slowest month.
Fees for things most factors include, such as broker credit checks or app access.
Pressure to sign the same day, before you have read the agreement.
Vague answers about reserves, recourse or what happens when you want to leave.

The other half: getting loaded

Factoring pays for loads; it doesn't find them. New authorities face the hardest load search of their careers, with brokers who won't take new MCs and rates that test every budget. We dispatch new authorities from day one at our new authority rate, set up carrier packets with brokers that accept new MCs, and call you before every booking. Factoring is never required to work with us. See dispatch for new authorities and the full guide to freight factoring.

Factoring companies for new trucking companies: your first loads, funded