For an owner-operator running under their own MC, three common ways to get paid are standard terms, quick pay for a fee, or selling the invoice to a factoring company. Each one trades money for time. This guide explains how each works and what it costs, so you can pick the one that fits your cash flow instead of the one that was offered first.
It is written for an owner-operator running under your own MC. Pay terms differ by carrier, broker and factor, so every term below is something to read in your own agreement, not a number to assume.
How do the three ways of getting paid compare?
| Question | Standard terms | Quick pay | Factoring |
|---|---|---|---|
| Who pays you | The carrier or broker you hauled for | The same party, sooner | The factoring company, which then collects |
| What it costs | Usually no fee for faster payment; you wait for the agreed payment date | A fee taken from that load’s pay | A fee per invoice, plus any terms in the agreement |
| Commitment | None beyond the load | Usually load by load | A contract, often covering more than one invoice |
| Main thing to check | Days after delivery and the documents that start the clock | Fee against the days it saves | Recourse, minimums, term and how you exit |
Whichever you use, the question underneath is the same: how long is the gap between delivering a load and having the money, and what does closing that gap cost you.
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Apply with StarBriges →What are standard terms, and when do they start?
Standard terms are the payment schedule in your agreement or on the rate confirmation: how many days after delivery you are paid, and which documents you must send first. Ask for the exact list; the signed bill of lading or proof of delivery and your invoice are the usual ones. Depending on the agreement, the payment period may start only after the required paperwork is received, so a proof of delivery sent late can add to your wait.
If you run leased on to a carrier rather than under your own MC, federal rules set a limit: 49 CFR 376.12(f) requires the lease to provide payment within 15 days after you submit the delivery documents. Under your own authority, the terms are what you agreed to, so read them before the first load.
Weekly pay sits in between. You are paid on a fixed weekly cycle for the loads that cleared that week. At StarBriges payments are weekly direct deposits.
What does quick pay cost you?
Quick pay is an option some brokers and carriers offer: you are paid within a short period of submitting your paperwork, and a fee comes off that load’s pay. Fees and timings vary by company and are set in their terms, so ask for both in writing.
To judge whether it is worth it, turn the fee into a cost per day: the fee in dollars, divided by the number of days it brings your money forward. Do that for each quick pay offer and you can compare them with each other, and with the cost of covering the gap any other way. Quick pay makes the most sense on a load you could not otherwise finance until the standard payment date, and the least on a load that would have paid on your next weekly cycle anyway.
How does factoring work?
Factoring means selling your unpaid invoice to a factoring company. The factor pays you for it now, collects from the party that owes it, and keeps a fee. Some agreements pay part of the invoice up front and the rest, less the fee, once the invoice is collected, so check which kind you are signing.
The step that makes it work is the notice of assignment, which tells the broker or carrier to pay the factor instead of you. Under the Uniform Commercial Code, section 9-406(a), once the party that owes the money receives an authenticated notice that the amount has been assigned and is to be paid to the assignee, paying you no longer settles its debt. That is why a payer with a notice on file will pay the factor, not you, until the notice is released. Under 9-406(c), the payer can ask the factor for reasonable proof of the assignment.
Two consequences follow. A notice of assignment stays with your business until it is released, so if you leave a factor, ask for a release letter and send it to everyone who received the notice. And if you change who you haul for, tell the factor before the first invoice from the new arrangement goes out, a step we also cover in switching dispatch services or carriers.
What should you read in a factoring agreement?
The fee per invoice is the number every factor advertises. The rest of the agreement is where the cost often sits:
- Advance and reserve: how much of each invoice you get now, and when you get the rest.
- Recourse: if the payer never pays, whether you have to buy the invoice back, and after how many days.
- Which invoices: whether you must factor every invoice or can choose load by load.
- Minimums and other fees: monthly volume minimums, and any charges beyond the per-invoice fee.
- Term and exit: how long the contract runs, how much notice it takes to end, any termination fee, and how the notice of assignment is released.
Add the fee and these terms together for a typical month of your invoices. That total is what factoring costs you, and it is the figure to compare against waiting or quick pay.
Which one fits your cash flow?
Start from your own numbers. Count how many days of fuel, insurance and payments you can cover from cash before a load pays. If your normal pay cycle lands inside that window, the standard terms cost you nothing extra. If it does not, price quick pay and factoring per day of cash brought forward, and use the cheaper one only for the gap you actually have.
Whatever you choose, keep setting money aside from every payment. Nobody withholds tax for you as an independent contractor, and owner-operator taxes and what to set aside covers how much. For the earning side of the same arithmetic, see what cargo van owner-operators earn.
The rest of the series is in our owner-operator guides. If you have your own truck and your own MC, running with StarBriges means weekly direct deposits, and it starts with a look at your MC and your truck and an answer inside one business day.
