Finance
Factoring (Freight)
Factoring is selling your accounts receivable to a third party for immediate cash, typically at a 1-4% discount.
Freight factoring is how most small and mid-sized carriers fund operations between invoice and payment. You submit a clean POD and rate confirmation; the factor advances 90-100% of the invoice within 24 hours and collects from your customer at term (usually net 30).
Recourse factoring is cheaper (1-2%) but you eat unpaid invoices. Non-recourse is more expensive (3-5%) but the factor absorbs customer credit risk. Lock-box vs notification-based agreements affect customer relationships — read the contract.
Factoring beats SBA debt for cash-flow gaps but is structurally more expensive than a line of credit. Carriers above ~$5M revenue typically migrate to a bank LOC.
Run compliance & dispatch in one place
Hayes combines a DOT-aware ATS, dispatch, EDI, and document compliance — built for carriers who don't want five logins.
Related terms
Operations
BOL (Bill of Lading)
A BOL is the legal contract and receipt issued by a carrier to a shipper, describing the freight being transported.
Operations
POD (Proof of Delivery)
POD is the signed document proving freight was delivered. It's the trigger for invoicing and the basis of OS&D claims.
Technology
TMS (Transportation Management System)
A TMS is the software system carriers and shippers use to plan, dispatch, track, settle, and invoice freight moves.