How Invoice Factoring Works for Ontario Carriers

What is invoice factoring?

Invoice factoring lets you sell unpaid invoices to a factoring company and receive most of the value right away, instead of waiting 30, 60 or 90 days for your customer to pay. For carriers, that means fuel, payroll, repairs and insurance get paid on time.

How the process works

1. You deliver the load and invoice your customer as usual.

2. The invoice is submitted and approved.

3. The factor advances up to 90% of the invoice value, often within 24 hours.

4. Your customer pays on their normal terms.

5. You receive the remaining balance, less the factoring fee.

Recourse vs non-recourse

With recourse factoring, you are responsible if your customer does not pay. With non-recourse factoring, the factor carries the risk of non-payment on approved invoices if the customer becomes insolvent. Non-recourse typically costs a little more.

What does factoring cost?

Fees are usually a small percentage of the invoice value and depend on volume, customer credit quality and payment terms. Always ask about setup fees, minimum volumes, and contract length before signing.

Is it right for your business?

Factoring suits growing carriers and logistics companies with strong customers who pay slowly. If you are in Toronto, Brampton, Mississauga or anywhere in the GTA and Canada, Mavi Finance can connect you with reputable factoring companies.