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Non-Recourse Factoring and Entrepreneurial Spirit: Empowering Small Businesses

The American Trucking Association reports that 95.8% of trucking companies have 10 trucks or less. For companies with no more than 100 trucks, the percentage increases to 99.7%. There are more than 750,000 carriers in the U.S., so you can imagine how many small trucking firms and owner-driver businesses exist.

With so many entrepreneurs in the trucking industry, there are also many challenges. Your business deserves to be empowered, but small businesses are often excluded from the same programs that support large trucking companies. You can’t grow without support, so what do you do? Non-recourse factoring is one of the best ways to protect your small business and to have the power and support to grow into something big.

What Is Non-Recourse Factoring?

When it comes to freight factoring arrangements, you have recourse arrangements, non-recourse arrangements, and a combination of the two. A recourse arrangement states that if your client or broker fails to pay an invoice, you will return the money you received in advance. A combination requires you to pay a certain percentage and the factor pays the other part.

Non-recourse arrangements cost more in fees, but they offer protections that make them appealing. If your broker or shipper goes out of business without notice, you’re not on the hook for repayment. You may have to repay for other reasons, such as refusal to pay because a delivery was late or there was damage.

The Pros and Cons of Freight Factoring

Remember that freight factoring is an agreement and you can’t just rush into it without fully understanding your responsibilities and researching your factoring partner. There are pros and cons to freight factoring that you need to consider.


  • You get paid the same day or within a couple of business days, depending on when you submit the request and how fast your bank’s processing takes.
  • You avoid late fees with your creditors.
  • You access money when you need it and no longer need to wait weeks or months to get paid.
  • All you need is a smartphone.
  • Office work for invoicing and collections is minimal.


  • Factoring fees do apply.
  • The factor must approve the request, and work done with riskier brokers or shippers (poor credit ratings) may not be approved.
  • If you don’t have the right arrangement, you could be required to repay the advance if your client fails to pay.

Things to Keep in Mind When Partnering With a Freight Factoring Company

Every freight factoring company has its own policies and fees. You should pay attention to this as non-recourse factoring is important when growing your small trucking company, but you also have to understand how it works. 

Some companies pay 90% or 95% of the amount you’re owed. You get that percentage, minus the factoring fees. The balance is sent once your broker or shipper pays the invoice. If you can find a company like Saint John Capital that offers 100% factoring arrangements, it’s beneficial.

You are going to pay fees for the service. Make sure you’re okay with them. When you’re starting, even a 3% fee can eat into your revenues and seem detrimental. Consider what you pay to your creditors for late fees or interest if you can’t pay your bills because a client pays late. When you look at the difference between those fees and a freight factoring fee, the freight factoring fee is much lower.

What Other Services Help Grow a Small Trucking Company?

Non-recourse factoring provides the cash flow you need to embrace your entrepreneurial spirit and grow your small business. But, it’s not the only service to consider. Here are other popular services for growing a small business.

Business Visa:

A business Visa provides you with a cash-free tool for purchasing gas when you’re on the road. Gas discounts help you save money each time you need to fill up. It’s safer than carrying cash, and Saint John Capital’s Visa doesn’t require a personal credit score to apply.

Phone Submitted Payment Requests:

You no longer need to have a fax machine, scanner/copier, and computer to submit a payment request. Take a photo of a bill of lading and send it to Saint John Capital’s app from your phone for quick processing and payment. Same-day payments are available if you submit your payment request by the noon EST deadline and have a Saint John Capital card.

Free Business Credit Reports:

Free business credit checks help you investigate new companies before you agree to work with them. If you find a broker that offers an amazing rate, do your due diligence and make sure they have a history of paying bills on time. An amazing rate is only useful if they pay what’s owed. If they have months of unpaid invoices, it’s not worth the risk.

Load-Finding Boards:

Load-finding boards are incredibly helpful if you don’t have a freight broker finding work for you. As freight brokers take commissions of upwards of 17%, a small trucking company may not want to make that investment yet. With load-finding boards, you can look for more work from your smartphone.

Load-Tracking Software:

When a driver is on the road and you have a shipper asking where it is, you can use real-time tracking to pinpoint the location. It makes it easy to provide an exact arrival time. Plus, you can check for potential traffic delays and advise your driver when necessary.

Low-Interest Business Lines of Credit:

If a freight factoring company offers low-interest lines of credit to businesses, it’s a smart way to grow your business. You’ll receive the loan, but you only have to use it when you need it. Pay off as much as you can each month. When used responsibly, a line of credit helps boost your business credit rating, too, which leads to lower interest rates and more trust with new clients. And, that boost in trust can lead to higher rates and more business, which is essential for your trucking company’s growth.

Invoicing and Collections:

Save time and energy on business paperwork. When you work with Saint John Capital, we take the bills of lading you send us to get paid quickly and generate an invoice for you. You can upload the invoices to your bookkeeping software. We also chase late payments for you. We’ll remind clients that a payment is due and contact them if they haven’t paid. You don’t waste time on collections. Your office staff has time for more important tasks like marketing.

It’s so easy to partner with Saint John Capital. Our company’s 25+ years in business have focused specifically on the trucking industry, which enables us to offer highly competitive factoring rates. We’re backed by bilingual customer support agents. We’ve helped many small trucking companies become major ones through our selection of supportive services. Complete the quick form with your contact information, company name, and MC number to get started.

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