How it works
Sell invoices for immediate payment
Carrier sells an invoice to a factoring company and receives 90-97% of the value within 24 hours.
Freight Glossary
Freight Factoring
Freight factoring is a financial service where a carrier sells its unpaid freight invoices to a factoring company in exchange for immediate cash, typically at a 1 to 5 percent discount. Instead of waiting 30 to 90 days for the shipper or broker to pay, the carrier receives 90 to 97 percent of the invoice value within 24 hours. The factoring company then collects the full amount from the shipper when the invoice is due.
Why it matters
Cash flow is the primary reason small and mid-size carriers go out of business. A carrier that has to wait 60 days for payment while paying for fuel, insurance, and driver wages every week faces constant cash pressure. Freight factoring solves this by converting receivables into immediate working capital. For shippers, understanding factoring matters because it affects carrier behavior. Carriers with cash flow pressure may avoid loads with long payment terms, prioritize brokers who pay faster, or cut corners to reduce costs.
When to use it
Carriers use freight factoring when their payment terms with shippers or brokers exceed their cash cycle requirements. If a carrier has weekly fuel and payroll obligations but invoices are paid net-60, factoring bridges the gap. Shippers should be aware that their payment terms affect carrier willingness to accept their freight. Offering net-15 or net-30 payment terms directly can make a shipper more attractive to quality carriers compared to competitors paying net-60 or longer.
How Warp thinks about it
Warp pays its carrier partners on predictable, fast payment cycles, which eliminates the need for most carriers in the Warp network to use third-party factoring. This keeps carrier costs lower and makes Warp loads more attractive to quality operators. For shippers, this means a more reliable carrier pool because the carriers serving your freight are not under the same cash pressure that degrades service quality at other providers.
Freight Factoring
Factoring converts unpaid freight invoices into immediate cash for carriers.
Cost
1-5% discount on invoice value
The factoring fee is the cost of immediate cash. Higher risk invoices carry higher factoring rates.
Why it matters to shippers
Payment terms affect carrier quality
Faster payment attracts better carriers. Slow-paying shippers get the carriers no one else wants.