Advance Rate
What is advance rate? The advance rate is the percentage of an invoice's face value that a factoring company pays the trucker up front, typically 90% to 97%.
Full definition
Advance rate is the single most important factoring economic alongside the fee. A 95% advance on a $1,000 invoice pays $950 immediately; the remaining $50 is held as a reserve until the broker pays.
Advance rates depend on broker creditworthiness, contract type, and the trucker's history. Non-recourse contracts on shaky brokers usually advance lower; recourse contracts on top-tier brokers can hit 97%+.
A higher advance is not always better — it often comes with a higher fee or recourse risk. Compare advance rate, fee, and reserve release timing as a bundle.
Example
- 97% advance on a $3,500 invoice = $3,395 same-day, with $105 reserve released after broker payment.