Freight Factoring for a New Authority (2026)

Brokers pay weeks after you deliver. Factoring pays you now and keeps a cut. Here's how it works for a brand-new MC, what the law says about who the broker pays, and which contract terms to read before you sign.

Freight factoring means selling your unpaid freight invoices to a factoring company. You deliver the load, send them the paperwork, and they pay you most of the invoice now. Then they collect from the broker and keep a fee. For a new authority, the appeal is simple: your fuel and insurance are due this week, and the broker's check isn't.

Factoring isn't a loan, and it isn't free. It's worth understanding before your MC goes active, because the contract you sign in a hurry is the one that's hard to leave.

Why do new authorities use factoring?

Because of the wait between hauling and getting paid. C.H. Robinson, for example, says on its carrier financial services page that standard payment comes 28 days after it gets your required documents, with a Quick Pay option for a 2% fee. Other brokers set their own terms, and many don't publish them.

That wait stacks on top of the wait for your authority. In First Load's weekly data, carriers whose MC went active the week of September 28, 2026 had waited a median of 27 days from filing. Of the carriers that filed the week of August 24, only 38% were active within 35 days. See the weekly new-authority reports for the latest numbers.

Put those together and a new carrier can be two months or more from filing to the first broker payment. To see what that gap means in dollars for your truck, use the cash-gap calculator.

Can you factor with a brand-new MC?

Yes, with many companies. Of the 12 factoring companies First Load compared from their own websites on September 5, 2026, nine say they work with new authorities. Some build programs around it. You usually need an active authority and a load with a broker the factor will approve.

The factor cares more about the broker's credit than yours, because the broker is the one paying the invoice. Many factors also check a broker's credit before you haul, which can help a new carrier steer clear of brokers who don't pay. You can compare factoring companies that take new authorities side by side, with each company's own terms and the catch.

How soon after my MC is active can I factor?

There's no federal waiting period, because factoring is a private contract between you and the factor. Factors that take new authorities usually want to see the active authority, proof of insurance and your business papers, and then they'll fund invoices from brokers they approve. One company on our comparison lists exactly those documents. Policies on timing differ, so ask each factor directly before you count on day-one funding.

The bigger wait is often the broker. C.H. Robinson's carrier FAQ, for example, said in September 2026 that an MC has to be active at least 7 days before it's considered. No load, no invoice to factor. Check what brokers require from a new MC, then compare factors that take new authorities.

How much does factoring cost?

Most companies quote a fee per invoice instead of publishing one. Among the 12 we compared, the ones that publish a number range from under 1% to about 3.5% of the invoice. Some offer intro rates for the first weeks that are tied to a longer contract. The fee isn't the only cost, so read the whole fee schedule.

On a $3,000 load, a 3% fee is $90. Whether that's worth it depends on what the wait costs you. If you have cash to cover two months of fuel, insurance and truck payments, you may not need factoring at all. If you don't, a fee can be cheaper than parking the truck.

What's the difference between recourse and non-recourse factoring?

With recourse factoring, if the broker never pays, you owe the factor the money back. With non-recourse, the factor takes that loss, but only for the reasons the contract covers, often a broker going out of business. Disputes over the load itself, like damage or a late delivery, can still be yours.

Non-recourse usually costs more. Read exactly which non-payment reasons it covers before you pay extra for it.

What is a notice of assignment?

It's the letter or notice that tells a broker to pay the factor instead of you. This part comes from the Uniform Commercial Code, which states adopt as their own law (sometimes with changes). Under UCC 9-406(a), once the broker receives notice that the invoice has been assigned, it can only settle the bill by paying the factor. If the broker pays you anyway after that notice, it hasn't paid what it owes.

That's why leaving a factor takes paperwork. Every broker you work with needs to be told the assignment is released, or they'll keep paying the old factor. Ask any factor how it handles that release, and what it charges for it, before you sign.

Why does a factoring company file a UCC-1?

Article 9 of the UCC covers sales of accounts, which is what selling invoices is (UCC 9-109(a)(3)). To protect its claim against other creditors, the buyer generally has to file a financing statement, the form people call a UCC-1 (UCC 9-310(a)). It's public, and it can name all your receivables, not just one load.

That's one reason a new factor may want the old one's filing released before it funds you. Other lenders can see it too.

What should I read before signing a factoring contract?

• How long the contract runs and what it costs to leave. Some agreements are month-to-month, some start with a short trial, and some run a year or more with a fee to leave early.
• Who eats an unpaid invoice under the recourse terms, and how many days until it's charged back to you.
• Every fee, not just the rate. Look for monthly minimums, fees for same-day funding, and fees to release the notice of assignment or the UCC-1.
• How much you get up front. Some pay the whole invoice minus the fee now; others pay part now and the rest after the broker pays.
• Whether you have to factor every load. Some contracts require all invoices, from every broker.
• Whether a fuel card is tied in. A bundled card can be useful, but it links the two products, so check both sets of terms.

Can I see what the broker was paid for my load?

You can ask. Federal rules require brokers to keep a record of each transaction, including what the broker was paid and the date it paid the carrier, and say each party to the deal has the right to review that record (49 CFR 371.3). That matters when you're judging whether a rate, or a quick-pay fee, was fair.

Should a new authority factor or wait?

Run your numbers first. If one slow broker payment would leave you short on fuel or insurance, factoring is a reasonable bridge. If you have the reserve, waiting costs you nothing. Either way, don't sign anything long-term on day one.

Some factoring companies on our comparison page pay First Load if you sign up with them. That never changes the order, and the terms are between you and them. First Load is a private company, not FMCSA.

Frequently asked questions

Is freight factoring a loan?

No. You're selling the invoice, not borrowing against it. The UCC treats a sale of accounts as an Article 9 transaction (UCC 9-109(a)(3)), which is why the factor files a UCC-1 to protect its claim.

Do factoring companies check my credit?

Many focus on the broker's credit instead, since the broker is the one paying the invoice. At least one company on our comparison says it doesn't run a credit check to start. Ask each factor what it checks before you apply.

Do I have to factor every load?

It depends on the contract. Some agreements require you to send every invoice from every broker, so ask before you sign and get the answer in writing, because it decides whether you can use a broker's own quick pay instead.

Can I switch factoring companies later?

Usually, on the contract's terms. Check the notice period and any early-termination fee, and get the old factor to release both the notice of assignment to your brokers and its UCC-1. Until that happens, brokers may keep paying the old factor.

Sources

• UCC 9-406: discharge of account debtor; effect of notification (Legal Information Institute, Cornell Law School)
• UCC 9-109: scope of Article 9, including sales of accounts
• UCC 9-310: when a financing statement must be filed
• eCFR: 49 CFR 371.3, records to be kept by brokers
• C.H. Robinson: carrier financial services (28-day standard payment, 2% Quick Pay; checked September 2026)
• First Load factoring comparison (12 companies, from their own pages, researched September 5, 2026)
• First Load weekly new-authority reports (FMCSA public authority records, tallied weekly)
• C.H. Robinson carrier FAQ (7-day active MC minimum, checked September 2026)

Last verified 2026-10-08 · First Load editorial · First Load is a private company, not FMCSA. The public record can lag and other requirements or holds may not show in it.