Refrigerated, flatbed, and hazardous loads often have higher per-mile rates, but there’s a downside. If you look just at driver wages, studies find wages and benefits start at 84.7 cents per mile. Compare that to 81.7 cents per mile for other drivers.
That’s just one of the higher costs associated with specialized freight. Fuel costs for regular trucking start at 44.7 cents per mile, compared to 53.6 cents for specialized loads. Repair costs of specialized equipment are substantially higher and start at 15.7 cents per mile for regular trucking compared to 25.4 cents per mile for specialized trucking. Tire costs are also higher and start at 2.6 cents per mile for regular trucks vs. 6.4 cents for specialized trucks.
Another area where the costs are higher is with insurance. Specialized trucking companies spend upwards of 21.3 cents per mile compared to 17.4 cents per mile for others. Higher rates help compensate for these higher costs, but there’s another issue to consider. Payments take time to arrive, especially if you’re driving FEMA loads.
This is where freight factoring helps. Instead of waiting months for a payment to arrive, you get paid immediately. You have the funds in hand to pay bills, wages, licenses, and certifications. Learn more about how freight factoring works and why it’s an important partnership for specialized trucking.
Freight Factoring 101
Before you sign up with a specialized trucking factoring company, you need to understand the mechanics behind freight factoring. It’s a partnership with a factor where you sell your accounts receivable to a third party. You sell at a slight discount, which enables you to get paid immediately. It works like this:
- Pick up and deliver a load.
- Submit your bill of lading through a factoring app or website.
- Wait for the factor to process your payment request.
- Get paid the same day or the next business day.
- Use the immediate payment to cover fuel, truck maintenance and repairs, insurance, etc.
It’s easy and provides immediate cash flow, but you have to consider a few things. The most important thing is that you might be held liable if your client never pays.
By completing business credit checks, you can avoid working with brokers or shippers who have a history of non-payment. However, there are no guarantees. A company you trust could suddenly shut down or file for bankruptcy unexpectedly.
That’s where non-recourse freight factoring comes in. The factoring rate is a little higher, but you have insurance against unexpected closures or bankruptcies. If you opt for recourse factoring, you’re responsible for repayment if your client never pays.
There are fees involved. Typically, a freight factoring fee is less than 5%, which is far less than credit card interest rates. This means that you don’t receive the full amount of money. If you complete a job that pays $1,000 and has a 3% factoring rate, you’d pay a freight factoring fee of $30. In exchange, you don’t have to wait until the end of the month to get paid.
Having all that money makes it easier to keep up with truck maintenance and repairs. If you own a small fleet of refrigerated trucks, and two stop working, you lose business if you can’t get them fixed and back on the road ASAP. Freight factoring provides you with the steady cash flow needed to repair your reefers.
Benefits of Freight Factoring With Specialized Loads
How specifically can freight factoring help with the different types of specialized loads?
- Flatbed Factoring: Frees up cash for additional equipment like chains, coil mats, coil racks, and tarps. It also provides immediate access to funds for paying higher wages to qualified flatbed drivers. Permits may be needed if the load is oversize or overweight.
- Hazmat Factoring: Hauling hazardous materials requires special permits and certification. Liability insurance is pricier, and there are PHMSA and UCR fees to pay for before work begins.
- Refrigerated Trucking: Reefer drivers also need to have training involving the maintenance of their trailers. If it stops working, timely repairs are essential to avoid loss of an entire trailer of goods. Reefer drivers also have to understand and comply with food safety regulations.
With freight factoring partnerships, your trucking company has money coming in as soon as your driver does the work. That makes it easier to pay for routine truck maintenance like brake inspections, oil changes, and tire replacements. If repairs are needed, you have the cash available instead of having to charge it on a credit card, where the average interest rates are at 21.5% (August 2025).
Freight Factoring Helps Your Specialized Trucking Company Grow
Factoring partnerships are advantageous for other reasons. One of the biggest is that it frees up your time. Instead of spending hours every month tracking invoices, depositing checks at your local bank, and chasing late payments, your freight factoring partner does it for you.
With more time, you can focus on your operations. Carefully manage arranging and monitoring specialized hauling work. Have more time to find new clients and grow your operation. With free credit checks, investigate a company’s background before you agree to work for them.
Freight factoring also makes it possible to purchase fuel at discounted rates. When you’re filling your tanks with cheaper diesel or gas, you have more money to invest in your employees, your facilities, and your trucks.
Most freight factoring companies offer additional services to help you run your trucking company. Look for helpful options like low-interest business lines of credit, intuitive TMS integration, and 100% cash advances.
Tips for Choosing the Best Specialized Freight Factoring Partner
You have a lot of options when it comes to freight factoring. Picking the best factoring company is important. Some of the things to look for include their history in the industry, transparency when it comes to pricing, and unlimited free credit checks. If you have to pay for every credit check, it gets costly.
It’s also a good idea to see if the freight factoring company offers a trial. You don’t want to get locked into a long contract without knowing if the partnership is right for your company.
Saint John Capital specializes in factoring for specialized carriers.
Our factoring experts have decades of experience in the trucking industry and work with you to ensure your factoring contract benefits your company’s financial goals. Have an immediate cash flow and reduce stress, improve your credit score, and keep your trucks moving. Saint John Capital has a 60-day trial available to all new customers. Contact us now to find out how we can help your business succeed.
