Most owner-operators and small fleets we work with run into the same issue: fuel costs come up fast, but payments take weeks to arrive. It’s one thing to have outstanding invoices, it’s another to fill up your tank without knowing when that money will hit your account. Factoring with fuel advances gives you a way to solve both problems at once. In this post, we’ll explain how this option works, who it’s right for, and how to tell whether it fits your cash flow strategy.
What Is a Fuel Advance and How Does It Work?
A fuel advance is a partial payment sent to you right after a load is picked up, typically 30 to 50 percent of the total invoice. This advance is designed to help cover immediate expenses like fuel, tolls, and driver meals. The remaining balance is paid out once the load is delivered and your paperwork clears.
When paired with invoice factoring, you get an advance at pickup and the final payment shortly after delivery. This combination helps reduce the financial pressure between booking a load and getting paid, which is often the tightest window for smaller carriers.
The Typical Process Step by Step:
- You book a load with a broker or shipper.
- You request a fuel advance at pickup, usually by sending a copy of the bill of lading.
- We verify the load and issue the advance, usually within a few hours.
- After delivery, you send in the signed paperwork and rate confirmation.
- We release the remaining balance, minus our fee.
When Factoring with Fuel Advances Makes Sense
For Carriers with Limited Working Capital
If you have limited working capital and need help covering fuel costs upfront, a fuel advance can be a practical solution. It can be an effective option if you haven’t qualified for a fleet card or line of credit, or if you want to avoid the high interest rates that come with credit cards.
During Busy Freight Seasons
During peak shipping periods, it’s common to run back-to-back loads, which means higher fuel expenses before payments arrive. Factoring with fuel advances makes it easier to accept more loads without interruption, even when cash flow is tight.
When Hauling Long-Distance or High-Fuel Loads
Heavy hauls or long routes can rack up hundreds in fuel costs before you even reach the delivery point. If the load pays well but you’re low on cash, the right fuel advance can make the run possible.
Things to Know Before Choosing Fuel Advances
There Is a Fee for the Advance
Most factoring companies charge a small fee, often around 1 to 3 percent, for each fuel advance issued. That’s in addition to your regular factoring fee. We walk through these details upfront so you’re never caught off guard by hidden charges.
Advances Are Based on Load Value
The amount you receive depends on the confirmed value of the load. Some companies offer a fixed percentage, while others base it on route distance or shipper type. If you regularly haul high-value loads, this can be a reliable source of quick funds.
Not Every Load Qualifies
Fuel advances typically require a strong broker or shipper relationship. If the payer is new, has a poor credit rating, or if the paperwork is missing key details, we may not be able to advance funds until everything is verified.
What to Watch Out For
Overusing Advances Can Eat Into Your Margins
Used wisely, fuel advances are a tool. But relying on them for every load can add up in fees over time. We recommend tracking how often you use them and comparing that cost against a fuel card or reserve fund. If you’re advancing on every load, it might be time to look at longer-term solutions.
Documentation Needs to Be Tight
Missing or unclear paperwork can delay your final payment. Make sure your bill of lading is complete, signed, and legible. Send in your rate confirmations, invoices, and any supporting documents on time. We process fast, but only when everything is in order.
Is This Option Right for Your Operation?
Factoring with fuel advances can be a smart move if you’re in a growth phase, hauling more miles, or just need reliable funding to handle day-to-day costs. At Prime Factoring, we’ve worked with fleets of all sizes to tailor a solution that fits. We don’t just fund invoices, we help you make strategic choices about your cash flow, fuel use, and long-term profitability.
Let’s Talk About Your Next Load
If you’re considering fuel advances, we’re here to help you run the numbers. Whether you need a one-time boost or want to build it into your ongoing factoring program, we’ll explain your options and set you up with a plan that works. Contact us at Prime Factoring today for a free consultation and fast account setup.
