Quick pay is a faster-payment option offered by many freight brokers and some shippers. Instead of waiting for standard terms, often 30 days or more, the carrier can choose to be paid within a few days in exchange for a deduction from the invoice.
How it works in factoring
Quick pay is similar to an early-payment discount, offered by the payer rather than requested by the seller. The carrier submits its paperwork, chooses quick pay, and receives the invoice amount minus the deduction.
Quick pay and freight factoring compared:
| Quick pay | Freight factoring | |
|---|---|---|
| Offered by | The freight broker or shipper | A third-party factor |
| Covers | That one payer's loads | Loads from many customers |
| Credit checks on customers | No | Usually yes |
| Collections support | No | Usually yes |
| Contract | None or simple | Usually a factoring agreement |
Illustrative example: A carrier hauls a $2,500 load. The freight broker's quick-pay program charges an assumed 3% for payment in two days, so the carrier receives $2,425.
A carrier that has already factored its invoices generally cannot use quick pay on those invoices, because the right to payment belongs to the factor and the notice of assignment directs payment there.
What to check
- The quick-pay deduction compared with your factoring cost on the same load
- Whether using quick pay with some freight brokers conflicts with a whole-ledger factoring agreement
- The freight broker's actual payment timing under quick pay
Carriers that work with only a few reliable freight brokers sometimes find quick pay enough; those with many customers often benefit from factoring's credit checks and single process.