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New authority factoring: cash flow before you have a track record
In your first months under your own MC number, nobody will extend you terms and every broker pays on their schedule. Factoring is one of the few funding tools that does not require an operating history — because the credit being evaluated is your customer's.
New Authority? Explore Your Factoring Options.
Share four quick details about your trucking business.
Written and reviewed by the HaulFund editorial team · Published · Last reviewed
Educational information for transportation businesses. Not legal, tax or financial advice.
Short answer
New authority factoring is freight factoring for carriers in their first year of operation. Approval leans on the creditworthiness of the brokers and shippers you haul for rather than your own history, so new motor carriers are often eligible when bank financing is not available. Terms offered to new authority can differ from those offered to established fleets, which is why comparing more than one provider matters at this stage.
Key takeaways
- Your customers' credit — not your operating history — drives most factoring decisions.
- First-year contracts are the easiest to sign and the hardest to leave; check length and notice period.
- Free broker credit checks are especially valuable when you have no history with anyone.
- A UCC-1 filed now must be released cleanly before you can move providers later.
- Watch for monthly minimums signed during a slow ramp-up period.
What providers actually verify
- Active operating authority and a DOT number in good standing.
- Insurance coverage that meets the provider's certificate requirements.
- Existing UCC filings against your business that could conflict with theirs.
- The credit quality of the brokers and shippers whose invoices you plan to submit.
- Identity and ownership of the business, and often a personal guarantee.
The mistakes new carriers make most
Signing the first agreement offered is the common one. The second is treating the rate as the only variable: a one-year term with a 60-day notice window and an auto-renewal clause can cost far more than a fraction of a point if service disappoints in month three. The third is not asking whether every invoice must be factored, which removes your ability to keep good-paying direct shippers off the facility later.
Advantages
- Accessible without years of financial statements or collateral.
- Broker credit screening you would otherwise have to buy or guess at.
- Cash cycle short enough to keep fuel and insurance current while you ramp.
- No debt created — you are selling receivables, not borrowing.
Trade-offs to weigh
- New-authority pricing may be less favorable than established-fleet pricing.
- Long first contracts lock in terms before you know your volume.
- Personal guarantees are common at this stage.
- Recourse chargebacks are painful when reserves are thin.
Questions to ask a provider
- Do you work with carriers under six months old, and does pricing change after that?
- What is the contract length, notice period and termination fee?
- Is there a monthly minimum during my first months of operation?
- Must every invoice be factored, or can I keep some customers off the facility?
- What exactly does the personal guarantee cover?
- How long does a UCC release take after the account is paid off and closed?
Frequently asked questions
- Can a new authority get factoring?
- Frequently, yes. Because the factoring provider is buying an invoice owed by an established broker or shipper, a carrier's short operating history is less decisive than it would be for a bank loan. Providers still verify authority, insurance and existing liens.
- What documents do factoring providers usually request?
- Typically your MC/DOT authority, a W-9, a certificate of insurance, a voided check or banking details, a driver's license, and sometimes a notice of assignment acknowledgement. Requirements vary by provider.
- Does a UCC filing hurt a new carrier?
- A UCC-1 is standard in factoring and simply perfects the provider's interest in your receivables. It matters later: an existing filing must be released or subordinated before another provider or lender can take a first position.
- Is a personal guarantee normal for new authority?
- Personal guarantees appear in many factoring agreements, and are more common where the carrier has little history. Read what it covers — often carrier performance and fraud rather than debtor credit risk.
Keep reading
How to choose a factoring company
A checklist built for carriers with no payment history.
Trucking factoring guide
How freight factoring works from paperwork to payment.
What is a UCC filing?
Why factoring providers file, and what a release involves.
Recourse vs non-recourse
Who carries the loss when a broker does not pay.
Why use a factoring broker
Comparing programs without filling out a dozen applications.
Takes 2 minutes. Five fields.
Tell us your MC number and how much you invoice a month, and we'll work to identify available factoring options based on your business profile and participating provider availability.
HaulFund is a factoring broker and is not a direct lender or factoring provider. HaulFund connects businesses with independent third-party factoring providers. HaulFund does not make final credit, underwriting, approval, or funding decisions. Rates, fees, advance amounts, funding times, contract terms, and eligibility vary by provider and are subject to provider approval.