Factoring Company Rejected the Broker? What to Do Before You Haul

Not legal advice. This is a document-preparation tool, not a law firm. Results aren't guaranteed. Verify all info with FMCSA and consult an attorney for legal questions.

Not legal advice. UnpaidLoad is a document-preparation tool, not a law firm. Verify facts with FMCSA and talk to an attorney about your contract and state law.

You found a good-paying load, ran the broker through your factoring company's credit check, and got a "no-buy" or "not approved." Now you have to decide fast: pass on the load, find another way to get paid, or take the risk. Here's how to think it through.

Check the broker first. It's free.

See authority status, authority age, BMC-84/85 on file, and the surety name from FMCSA records.

Broker owes you? Build a demand letter + bond-claim packet for

9. What a factor's rejection means

A factoring company buys your invoice, so it's taking a credit risk on the broker. When a factor won't approve a broker, it's saying it doesn't want that risk. Common reasons:

Slow or late payment history with the factor or across its client base.
Too little history, often new authority.
Prior disputes, chargebacks, or short pays.
Fraud concerns, such as mismatched contact info or a recent change of ownership or address.
Credit limit reached for that broker.

A rejection isn't a legal finding that the broker is bad. But your factor sees payment data from many carriers that you can't see. Take it seriously.

Step 1: Ask the factor why

Call or email and ask: is this a hard no-buy, a credit-limit issue, or a lack of history? Would they buy with recourse, or a smaller amount? Some factors can share whether the broker pays slowly. The answer changes your options.

Step 2: Check the broker yourself

Run the MC through our free Broker Check or look it up on the FMCSA SAFER Company Snapshot and FMCSA Licensing & Insurance (L&I). Confirm:

Broker authority is active, not just carrier authority.
A BMC-84 bond or BMC-85 trust is on file, with no cancellation pending. Brokers must keep $75,000 in financial security (49 CFR 387.307).
Authority age. Very new authority is a common reason factors decline.
Contact details match FMCSA. If the phone or email you were given doesn't match, call the number on SAFER. FMCSA's fraud guidance urges this kind of check (FMCSA: Broker and Carrier Fraud and Identity Theft).

See the full walkthrough in how to check a broker's MC, authority, and bond and the red flags checklist.

Step 3: Decide on the load

Your realistic options:

Pass. Often the right answer, especially with fraud signals or a pending bond cancellation.
Ask for quick pay or better terms from the broker, in writing on the rate con.
Ask whether the factor will buy with recourse or a lower advance. Understand you may owe it back if the broker doesn't pay.
Haul it unfactored and bill the broker directly. You carry the full risk and wait the full term.

Check your factoring agreement first. Some agreements require you to factor all invoices, or limit which brokers you can bill directly. Breaking those terms can cause problems with your factor.

If you already delivered

It happens: you hauled first and checked later, or the broker was approved at booking and rejected after. Steps:

Ask the factor whether it will collect the invoice for you as a service, even without buying it.
If not, invoice the broker directly with the rate con, signed POD, and any receipts. Get confirmation that they received it.
Follow up in writing as the due date approaches. See how long a broker has to pay.
Watch the broker's FMCSA record. If the bond is cancelled or authority revoked, escalate immediately.

If the broker doesn't pay

Send a demand letter with a firm pay-by date and the surety named. See how to write one.
File a bond claim with the surety or trustee. See how to file a broker bond claim. If FMCSA posts a broker financial failure notice, the rule gives a 60-day claim window (49 CFR 387.307), so don't sit on it.
Request the transaction record under 49 CFR 371.3 if the broker says the shipper hasn't paid. See the transparency request guide.

When the factor bought it and then charged it back

That's a different problem: the broker was approved, didn't pay, and the factor pushed the invoice back to you under a recourse agreement. See factoring company chargebacks.

Questions to ask your factor up front

How do I run a broker credit check, and how fast is the answer?
Is your agreement recourse or non-recourse, and what exactly does non-recourse cover?
Do I have to factor every invoice, or can I bill some brokers directly?
If you reject a broker after I deliver, will you still collect the invoice for me?
What do you need from me if a broker disputes or short-pays?

Get the answers in writing. They decide what happens the next time a broker gets rejected.

Build a better broker list

Keep notes on which brokers your factor approves, and how fast they pay.
Check FMCSA records before booking, not after.
Ask about payment terms on every rate con.
Look at other carriers' experiences. Our free Carrier Reports let carriers share factual payment experiences with brokers, and you can browse recently reported brokers.

Factor said no? Check the broker yourself, free.

Our Broker Check shows authority status, authority age, and the BMC-84/85 surety from FMCSA records. If you already hauled and aren't paid, the $19 packet builds your demand and bond-claim letters.

Check the broker

Sources

FAQ

Why would a factoring company reject a broker?
Factors set their own credit rules. Common reasons include slow payment history, too little credit history, new authority, prior disputes or chargebacks, or concerns about fraud. Ask your factor for the reason.

Can I still haul a load if the factor rejects the broker?
You can, but you would usually carry the payment risk yourself because the factor may not buy that invoice. Check the broker's FMCSA record and terms before deciding.

What if I already delivered the load?
Ask the factor whether it will buy the invoice with recourse or collect it as a service. If not, invoice the broker directly, follow up in writing, and escalate with a demand letter and bond claim if payment is late.

Check the broker first. It's free.

See authority status, authority age, BMC-84/85 on file, and the surety name from FMCSA records.

Broker owes you? Build a demand letter + bond-claim packet for $19.

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Not legal advice. This is a document-preparation tool, not a law firm. Results aren't guaranteed. Verify all info with FMCSA and consult an attorney for legal questions.