Factoring Companies Squeezed as Shippers Stretch Payments: What Truckers Need to Know

by TRUCKERS VA
(UNITED STATES)

Introduction

When you haul a load and expect your check or advance quickly, you’re used to the wheels turning fast. But now: the companies that buy those invoices (factoring firms) are getting squeezed—because the shippers/brokers they count on are taking longer to pay.
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That matters for you, the driver or owner‑operator, because slower cash flow anywhere upstream can ripple down and hurt your earnings or your operation.

Key Points

According to factoring firm leaders, many shippers are moving from net 30 payment terms to net 45, net 75, even net 90 or more.
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Even though carriers get paid quickly when factoring is used, the factoring company still has to wait on the shipper/broker. To compensate, they’re raising fees or tightening terms.
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The freight market’s weakness gives shippers leverage: fewer loads, weaker demand, so they feel like they can stretch out payment terms without losing carriers.
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Multiple Perspectives

For you as a driver/owner‑operator: You may think “I always get paid via factoring, so it’s safe,” but the extra cost or fee increase from the factoring company eventually cuts your margin.

For the factoring firm: They face higher risk—if the shipper doesn’t pay, the risk falls on them (or on the carrier, depending on the contract). So they have to compensate.

For the shipper/broker side: They’re under pressure too—weak freight demand, squeezed margins, so they stretch payments

to manage their cash‑flow. But that choice causes knock‑on effects.

For the broader industry: This shows how down‑market freight conditions don’t just hit rates—they mess up the entire “ecosystem” of payments, advances, carrier settlements, and financing.

What This Means for You (Driver/Owner‑Operator)

Check your factoring contract: Look for terms about recourse vs non‑recourse, fees when there’s a delay, who bears the risk if the shipper doesn’t pay.

Know your payment chain: Even if you invoice and get paid via a factor, know who the ultimate payer is (shipper/broker) and what their history is on payments.

Expect higher costs: Factoring fees could rise; if you were budgeting at X % fee, maybe plan for Y % now.

Cash‑flow matters: If you depend on quick turnaround, make sure you have a buffer. Slow pay upstream = risk downward.

Negotiate smartly: When bidding on loads, consider not just rate per mile, but how the paperwork/contract/payment terms look. A slightly lower rate may be better if payment is faster and terms are cleaner.