Truck Factoring 101: Factoring Glossary

This glossary of truck factoring terms offers a quick rundown of what you need to know to begin factoring trucking invoices.

Account Creditor:  The operator (owner) of the transportation company that uses truck factoring for their company (you)

Account Debtor: The client who receives transportation services from the Account Creditor

Bill of Lading:  An agreement that outlines the details of a particular shipment and its destination.

Factoring Advance Rate: A percentage of the invoice that is advanced to the Account Creditor.

Factoring Broker:  A 3rd party who works on behalf of the Account Creditor to match them with the best factoring company

Factoring Company:  The company who purchases accounts receivables and forwards cash to the trucking company

Freight Bill Factoring:  Same as invoice factoring, freight bill factoring advances cash on unpaid bills issued by freight companies to their customers.

Fuel Advance Program: A cash advance given upon pick-up of the load to cover fuel, repairs, maintenance, payroll, etc. Learn more about our competitive fuel advances for trucking companies!

Fuel Cards: Truck factoring fuel cards offer discounts on fuel, repairs and other supplies. They can be used at fuel stops nationwide.

Non-Recourse Factoring: An invoice factoring method through which the factoring company maintains all risk. If the customer fails to pay, the factor is liable. Non-recourse transportation factoring comes with a higher fee but lower risk.

Recourse Factoring:  If a trucking company’s clients fail to pay, the trucking company is liable and the accounts can be reverted back to the trucking company. Lower fees accompany recourse factoring, but it also is higher risk.

Truck Factoring:  Provides working capital to trucking companies of all sizes through the purchase of unpaid truck invoices

Spot Factoring:  Allows trucking companies to factor a single invoice without any long term commitments.

trucking factoring terms