Can You Have Two Factoring Companies at Once Trucking – FactorFreight
Last Updated and Fact-Checked: July 2026
Trucking company owners often wonder if they can speed up cash flow or get better rates by splitting their invoices between multiple finance providers.
The short answer to whether you can have two factoring companies at once in trucking is yes, but only if both companies explicitly agree to it through a subordination agreement. If you have an exclusive factoring contract, using a second company is a breach of contract.
Overview
Factoring companies secure their risk by filing a UCC lien on your accounts receivable. If two companies try to claim the same invoices, a legal battle ensues. Therefore, unless managed with strict legal boundaries, having two factors is considered “double-factoring,” which is heavily penalized.
Practitioner Note: “In my experience, attempting to use two factoring companies without their knowledge is the fastest way to get your accounts frozen. The only time it works smoothly is if one factor only handles your freight brokers, and the other handles direct shippers, and they have signed a formal agreement defining those boundaries.”
Key Factors to Consider
Exclusive vs. Non-Exclusive Agreements
If you signed an exclusive factoring agreement, you are legally bound to send all your invoices to that one company. You absolutely cannot have a second factor.
Intercreditor Agreements
If you have a non-exclusive contract, the two factoring companies must sign an intercreditor or subordination agreement. This dictates who has the first right to which specific invoices.
Broker Confusion
Having two factors requires sending different Notices of Assignment to different brokers. If a broker gets confused and pays the wrong factor, it can take weeks to untangle the mess.
Step-by-Step Process (If Attempting)
- Verify Contract Type: Check your current contract to confirm it is non-exclusive.
- Consult Your Current Factor: Ask them if they are willing to sign an intercreditor agreement to split your receivables by customer.
- Find a Willing Second Factor: Not all factoring companies are willing to take second position or split a portfolio.
- Draft the Legal Agreements: Have the legal teams of both factors clearly define the boundaries (e.g., Factor A gets Broker X, Factor B gets Shipper Y).
- Notify Customers Accurately: Ensure each customer receives the correct NOA.
Common Mistakes & Pitfalls
The most catastrophic mistake is factoring the exact same invoice with two different companies. See our guide on what happens if you factor the same invoice twice to understand the severe legal consequences (it is considered fraud).
Frequently Asked Questions (FAQ)
Why would someone want two factoring companies? Usually, it’s because their primary factor won’t approve a specific broker due to bad credit, so the carrier wants to find a secondary factor who will take the risk.
Is it worth the hassle? Generally, no. The legal fees and administrative headache of managing two financing relationships usually outweigh the benefits. It’s often better to just switch entirely. See how to switch factoring companies owner operator.
Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice. Privacy Policy
About the Reviewer: Dr. Alex Merton is the Senior Financial Researcher at FactorFreight. With over 15 years in commercial logistics finance, Alex specializes in helping small carriers and owner-operators navigate complex cash flow solutions and factoring contracts.