Other factoring agreement terms and conditions Look for factoring agreements with either minimal or no termination fees. Termination feesĭepending on your factoring agreement, you might also have to pay an exit fee for ending an agreement early. These fees can be a flat fee, a percentage of invoices, or require minimum payments based on usage. Some factoring services charge a minimum monthly fee for maintenance. Costs can vary depending on the number of invoices you factor, the expected invoice amounts, and risk analysis. Here are the most common factoring fees explained: Origination feeįactoring companies usually charge a flat fee at the beginning of any agreement. Beyond the typical factoring fees associated with an advance against an invoice, you also need to pay close attention to origination fees and monthly fees. The factoring fees are usually in the fine print, but it’s critical you understand them. Fees to look for in a factoring agreement The factoring business will charge a fee for this service, but they’ll also handle collections for you. Basically, you’re getting a short-term loan using your invoices as collateral. The factoring agreement details the terms, conditions, and costs for paying your invoices in advance. What is a factoring agreement?Ī factoring agreement is a legal contract that essentially sells your outstanding invoices to a factoring service. That’s why many carriers turn to invoice factoring to get paid faster. It’s easy to get overwhelmed by paperwork, tracking invoices, and collecting what you’re owed. Whether you’re an owner-operator or you’ve got a fleet of trailers on the road, managing your cash flow can be a challenge.

Factoring invoicing