Common Freight Factoring Fees

When factoring, you’ll come across many types of fees. Some factoring companies charge lower initial factoring rates but have many hidden fees. Some may even increase their rates over time without telling you. Look out for these eight common and hidden factoring fees.

When shopping around for a factoring company, you’ll come across many types of fees. Some factoring companies will charge a lower initial factoring rates but have many hidden fees. Some may even increase their rates over time - sometimes without informing you. Not every factoring company charges these extra fees, but it’s important for you to take them into consideration when picking a factoring company. You should carefully read a contract before signing up with a factoring company. Here are some fees to keep in mind:

Application Fee

Some factoring companies require you to pay a fee just to fill out an application. If you are not approved, you won't get a refund. These fees can cost a few hundred dollars and are almost always non-refundable.

Sign-Up Fee

Upon approval of your application, some factoring companies require you to pay an initial fee to start factoring with them. These fees can also cost a few hundred dollars and won’t apply towards a factoring fee on a load. If you choose to not continue factoring with the company, you will not be refunded this fee. Sign-up fees are typically non-refundable.

Termination Fee

If you have a contract with a length of terms and decide to stop factoring before the contract expires, you may get charged a lot of money to break that contract. Be careful when deciding the length of your contract. Some companies also require a 30- to 60-day written notice before the end of your contract stating that you will not be continuing factoring with them. Be sure to send in that notice so you don't get locked in to an automatically renewed contract!

Hidden Fees to Watch Out for

Some factoring companies will work these hidden fees into their contracts without informing you. While the company might have only 1 or 2 hidden fees, these fees can be either extremely expensive one-time expenses or compound over time as monthly or weekly fees.

ACH Transfer

There are companies that charge a fee to electronically transfer or deposit funds into your bank account. These fees can range from $10 to $25, which can really add up to a lot of money over time! Some companies will charge you a flat amount per invoice they're paying you for, or they will require you to have a batch of multiple invoices on which you pay a discounted fee to have an ACH transfer initiated. If you're factoring five or more invoices per month, you will easily pay over $50 a month for transfers.

Minimum Volume

Some factoring companies require carriers to factor a minimum number of loads per month. If that minimum volume of invoices is not met, they either charge an extra fee to the carrier or increase the factoring rate percentage. If you do not meet this minimum volume multiple months in a row, your factoring rate could easily hike a few percentage points. That means the factoring company you once signed up for at 2.5% is could easily be charging you 4% in no time.

Credit Checks

Before picking up a load from a broker, you want to know if that broker is reliable and you factoring company will factor loads for them. Some companies don't work with certain brokers. In some cases, you might have to pay for every broker credit check you request from the factor. Other companies give you access to free credit checks. Read more here.


Factoring companies may charge reserve rates as an insurance in case a broker fails to pay them. This means a percentage of your invoice amount is kept “on hold” for 30 or more days, or until a broker pays the factor. For example, some factoring companies hold 2% of your invoice as a reserve. On a $1000 load, that's $20 being held by the factoring company. If you do 10 $1000 loads in a month, that's $200 sitting in your factoring company's reserve account, waiting to be paid out to you when a broker pays. It may take up to a week after a broker pays for you to receive your reserve funds back. Read more here.

Same-day Funding

You may have to pay extra to get your funds deposited the same day in your account. Some factoring companies will charge you for same-day payment but offer free payment the next day or within the week. When picking a factoring company, assess how soon you anticipate needing the money and if paying extra for same-day payment would be worth it.


When picking a factoring company, always read the fine print in the contract and make sure you're not being charged more than you're expecting. The small one-time charges on each load can add up to a lot of money each month, so be sure to carefully calculate those costs. Transparency is key to making sure factoring is working for you and your business.