Factoring vs. broker quick pay

Broker quick pay means a broker pays you early on its own loads and takes a fee out of the load. Freight factoring means you sell your invoices to a factoring company, which pays you early on loads from any broker it accepts and collects from each of them. Quick pay covers one broker’s loads. Factoring works across all the brokers your factor accepts.

Both beat waiting 30 days or more for a broker to pay on its normal terms. Which one costs less, and which one is less work, depends on how many brokers you haul for and how fast you need the money.

Factoring vs. quick pay at a glance

	Broker quick pay	Freight factoring
Who pays you early	The broker	The factoring company
Which loads	That broker’s loads only	Loads from any broker the factor accepts
How fast	Set by each broker	Set by the factor; at FFS, rush in 60 minutes, standard ready to fund same day
Fee	Set by each broker, taken out of the load	Set by your agreement; one flat fee at FFS
Who collects	You bill the broker, and it pays you directly	The factor bills and collects
Credit checks on brokers	No	Often included; free at FFS
Fuel at pickup	Not part of quick pay	Some factors offer fuel advances
Paperwork	Each broker’s own process	One process for every load

How broker quick pay works

You deliver the load and send the broker your invoice and BOL. Instead of paying on its normal terms, the broker pays you within a few days and keeps a fee. Each broker sets its own fee and timing, and decides who qualifies.

Quick pay works well when a few brokers give you most of your loads and all of them offer it on good terms. It gets harder to manage when you haul for many brokers. Each one has a different fee, a different payout schedule and a different way to request it, and some don’t offer quick pay at all.

How freight factoring works

You send your invoice and BOL to the factoring company. The factor verifies the load with the broker, pays you an advance, then collects from the broker on the broker’s normal terms. The broker pays the factor, not you. Your factoring agreement sets the fee and funding terms. At FFS, the flat fee is the same no matter which broker you hauled for.

A factor also bills and collects for you, follows up on slow payers and can check a broker’s credit before you book. Quick pay does none of that. For more on how factoring works, read what freight factoring is.

Which costs less?

Compare the two in dollars, on the same load. Ask the broker for its quick pay fee on one of your invoices, then compare it with what a factor charges on that invoice.

At FFS, new carriers pay a 2.9% flat fee. On a $2,500 invoice:

	Amount
Invoice	$2,500.00
FFS flat fee (2.9%)	−$72.50
Advance to you (97.1%)	$2,427.50

A rush request adds a flat $40 processing fee, so the FFS fees on this invoice come to $72.50 standard or $112.50 with rush. Compare the broker’s quick pay fee with the FFS fee for the speed you need. Then compare when each one actually pays you.

Also count the time you spend billing and chasing brokers, and the loads you haul for brokers that don’t offer quick pay.

When each one fits

When quick pay fits

• One or two brokers give you most of your loads, and both offer quick pay on good terms.
• You only need early payment once in a while.
• You don’t mind doing your own billing and collections.

When factoring fits

• You haul for many brokers, or book off load boards.
• You want one funding process, whichever broker you hauled for.
• You need fuel money at pickup, before the load delivers.
• You’d rather drive than do the billing and follow up on late payments.
• You’re a new authority and want every new broker checked before you haul.

Can you use both?

Yes. You can keep quick pay with a broker or two and factor the rest. Once a broker is set up to pay FFS, that broker pays FFS on every invoice, and FFS passes through the payments on invoices you didn’t factor. If you want quick pay from a broker that’s set up with FFS, call us before you request it.

With FFS you choose which invoices to factor, so you can factor your slow-paying brokers and keep the fast payers to yourself.

Get a quote or call (813) 773-4002.