Know Before You Sign
Getting your authority is exciting.
But it also means your phone probably started ringing immediately.
Factoring companies know new carriers need cash flow, so many reach out quickly offering:
- fast funding
- the “best rate”
- simple sign-up
What they don’t always explain clearly is what happens after you sign the contract.
Before agreeing to anything, here are three contract traps experienced carriers watch for.
1. Long-Term Contracts
Many factoring agreements quietly lock you in for 12–24 months.
That means even if the service is slow, expensive, or frustrating, you may not be able to leave.
Some contracts renew automatically if you miss the cancellation window.
Experienced carriers usually prefer short agreements or simple exit terms that give them flexibility.
2. Termination Fees
Some contracts include termination fees that can cost thousands of dollars.
These fees can appear in different ways:
- flat cancellation penalties
- “minimum volume” requirements
- remaining contract balance clauses
Many new carriers don’t notice these until they try to leave.
We’ve seen carriers charged $3,000–$5,000+ just to exit a contract.
3. Hidden Fees
The factoring rate isn’t always the full story.
Some agreements include additional fees like:
- invoice processing fees
- ACH or wire fees
- monthly minimum charges
- credit check fees
- account maintenance fees
Individually they may seem small, but together they can add up quickly.
A Simple Rule Experienced Carriers Follow
Before signing any factoring agreement:
✔ Read the termination section
✔ Check how long the contract lasts
✔ Ask exactly what fees exist beyond the rate
A few minutes reviewing the agreement can prevent expensive surprises later.
How CarrierNet Is Different
CarrierNet was built to support small carriers, not trap them.
We believe carriers should have:
- no long-term contracts
- clear, simple pricing
- the freedom to leave if the service isn’t right
Our goal is simple: help carriers keep their cash flow moving without hidden surprises.
Need a Second Set of Eyes?
If you have a factoring contract on your desk and aren’t sure what it means, we’re happy to take a quick look.
We can usually spot the common traps in just a couple minutes.
📞 Call or text: (605) 306-4111
No pressure. No obligation.
Just straightforward answers so you can make the right decision for your business.
