Factoring agreements provide quick payment for freight invoices, but beware of hidden fees and clauses that could harm your business. Recourse factoring makes you pay if the client doesn’t, while non-recourse has limitations. Look out for extra charges like ACH fees and minimum volume fees, and always review the full fee schedule.

Evergreen clauses can automatically renew your contract, trapping you for another year if you miss the cancellation window. Factoring companies may file a UCC-1 lien against your business, affecting your credit and ability to switch providers. Be cautious, ask questions, and protect your creditworthiness when considering factoring agreements.

Choose a factoring company that safeguards your credit profile and be wary of contracts that may harm your business. Don’t rush into agreements – ask about recourse, fees, minimums, auto-renewal, termination fees, UCC filings, and funding speed. Read the fine print and seek legal advice if needed to maintain control of your business and profits.

Read more at Yahoo Finance: Understanding Factoring Contracts and Spotting the Traps