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Factoring VS. Quick Pay

factoring versus quick pay

Quick Pay is a payment offered by all brokers in the transportation industry. Brokers using Quick Pay offer accelerated payment terms directly from the broker in exchange for a processing fee, which is a percentage of the agreed-upon load rate. The percentage varies by broker but usually ranges from 1% – 5%. Once the truck driver has delivered the load, the bill of lading (BOL) is submitted, invoice and other load documents to the customer for payment. Most brokers offer several methods for submitting load paperwork. Often, paperwork can be uploaded directly into the broker’s accounting system using software products designed for the trucking industry. Once the broker receives your paperwork, payments are usually made within 2-4 business days. A disadvantage may be that the broker’s quick pay fees are very high, and unpredictable. Each broker and invoice is different so sometimes it can be difficult to keep track of payments, fees and payments.

Freight factoring offers an alternative for processing and accepting load payments. Once you negotiate a load rate, a freight factoring company advances you a portion of the rate (PCG offers between 97% – 99.99%). The freight factoring company collects the full invoice amount from the broker or company you hauled the load for. Upon payment of the invoice, the factoring agent pays the remainder of the full amount due to you – minus the percentage fee the company takes as payment for service. PCG, the freight factoring company, makes payments within 24 hours of delivery confirmation by direct deposit or wire transfer. These expedited payment forms may also be subject to additional fees by the factoring agent – ranging from $3-$15 per payment with PCG.

Freight factoring is the easiest decision for independent truck drivers and trucking companies; (a) hassle-free payment system, (b) account managers to handle invoices and customers, and (c ) cash within 24 hours. Another consideration to remember are the other perks and benefits that freight factoring companies offer. These include benefits such as fuel cards, free online load board, recourse and non-recourse factoring options, equipment financing and truck maintenance/tire discounts. The only perk that is similar between the two options is a fuel card or fuel advance; however when you choose Quick Pay with a broker there are generally more additional cost for each fuel advance. 

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