Advance rate

The term has two uses in trucking and they are not related. In factoring, it means the share of the invoice you receive immediately. From a broker or a load board, an "advance" usually means a fuel advance, which is cash released before delivery against a load you have not finished. Read which one the document means before you compare offers.

In practice. Factors quote the advance rate next to the fee, and the two move together. A 97% advance at a higher fee is not automatically better than a 90% advance at a lower one. One more question decides it: whether the fee comes out of the advance or out of the reserve, because that changes what lands in your account on day one.

Example. On a $2,400 invoice at a 95% advance rate, $2,280 is advanced and $120 is held as reserve. If the fee is 3% of face value, that is $72, and if it is deducted from the reserve you receive $48 back after the broker pays.

Why it matters for your cash flow. The advance rate decides how much of today's load funds tomorrow's. A 90% advance on that same invoice leaves $240 you cannot spend until the broker settles, roughly 40 days later. Across a week of loads, the gap between a 90% and a 95% advance is working capital you either have or do not.