Factoring and QuickPay: What's the Difference?

What is the Difference Between a QuickPay and Factoring?

Many owner-operators start to consider factoring or take broker QuickPays when they don’t want to wait more than a few days to get paid on a delivered load. You can’t afford to turn down loads, but you can’t run your business without consistent income.

This is why broker QuickPay and invoice or freight factoring are popular payment choices for carriers. Both options get you your money faster, but there are differences between the two that you should consider.

Here’s what you need to know about the differences between a QuickPay and factoring.

What is a QuickPay?

QuickPay is a payment option that offers carriers a faster option of getting paid from a broker. A QuickPay can take, on average, between two and five days after you’ve completed the load.

Not all brokers have a QuickPay program, but it’s important to remember that each broker determines its terms and cost. One broker might pay in two days and take 2% out. Another might take five days and charge 5%.

QuickPays are a faster option to waiting whatever the agreed upon standard terms are — could be 21-30 days. If you have strong cash flow, and don’t need quick influxes of cash, you might only take a QuickPay from time to time.

What is Invoice Factoring?

Invoice factoring is another alternative for getting paid faster. The factoring company buys your invoice at a discount and advances you the majority of the invoiced amount in as fast as one business day.

So if both basically pay you for a load faster, how do you know which one is right for your business?

What Are the Key Differences Between QuickPay and Invoice Factoring?

Here are some key differences between QuickPay and invoice factoring:

  1. QuickPay usually takes longer than freight factoring. It can take anywhere from two to five days or more to get a QuickPay from a broker. Most factoring companies pay within one business day, and some can even pay same day if you meet their deadline.
  2. With factoring, you have more flexibility than you do with QuickPay. Brokers only offer QuickPay on their own loads. With factoring, you can choose which invoices to factor, meaning that you can still accept QuickPay on some loads if that’s what works for your company. That also means you don’t have to handle the paperwork on different brokers and try to collect from them. Factoring companies can handle the invoicing and collections for you.
  3. Factoring companies offer back office services in addition to advance funding. That includes services such invoicing and collections, broker credit checks, fuel card discounts and fuel advances. With standard broker QuickPays, you don’t get those additional benefits.
  4. Factoring companies offer client portals, so you can access your account and check the status of your funding and fuel advances. Brokers do not typically have client portals.
  5. Factoring companies offer integrations and partnerships to add more value to their clients. For example, we offer free trials to load boards such as DAT and AscendTMS.
  6. QuickPay happens on a case-by-case basis. For the most part, you don’t sign an exclusive contract. Some factoring companies, including Triumph Business Capital, allow clients to factor only the invoices they want to factor.

With factoring, you’ll have a dedicated account executive who handles every aspect of your account. You can build a relationship with your AE and your factoring company to help you grow your business.

  1. Fees for factoring companies are typically higher than QuickPay fees because factoring companies offer support, services and flexibility that QuickPay does not.

Learn More about Invoice Factoring Services 

As you can see, there are significant benefits to factoring your invoices. Invoice factoring with Triumph Business Capital helps thousands of owner-operators to streamline their cash flow and grow their businesses. Click here to learn more about Triumph’s freight factoring services and fill out an application today.

Trucker’s Guide to Freight Factoring

Our Trucker’s Guide to Freight Factoring explains what exactly invoice factoring is, how it works, and if it’s a right fit for your trucking company.