What is Carrier Factoring?
Carriers that want to get paid sooner than later can simply sell their accounts receivable (invoices), minus a small discount, to an invoice factoring company. After checking out the creditworthiness of the invoiced customer, factoring companies advance a large percentage of the invoice to the carrier, providing immediate cash flow for them to use for their business needs. For the carrier that can’t wait 20, 30, 40 days to get paid, factoring companies like OTR offer the perfect solution and pay them within 24 hours.
And perhaps the best thing is that OTR is a ‘non-recourse’ factoring company, meaning they absorb all the risk. If the broker or shipper neglects to pay them, the carrier still gets to keep their advance, so there is no risk to the carrier.
How Much Does Factoring Cost?
When either a carrier or broker factors a load, OTR charges anywhere from 1% to 4% of the invoice amount. This rate is very competitive with other factoring companies, and in some cases, much better.
Where Do Carriers Find These Options in DAT?
Carrier factoring is offered through all of our carrier freight matching platforms.
- DAT Power
- Load Board for Truckers
- DAT One (Mobile)