If you use a freight factoring company to get paid faster, you need to include a Notice of Assignment (NOA) in your carrier packet. Without it, brokers will send payment directly to you — bypassing your factoring company — which creates a serious problem. Here's everything you need to know.
What is a Notice of Assignment?
When you work with a freight factoring company, you "assign" your invoices (accounts receivable) to them. This means you sell your right to collect payment from brokers to the factoring company. The factoring company advances you 90-97% of the invoice immediately, then collects the full amount from the broker when the net 30 (or net 45) payment comes due.
A Notice of Assignment is the official document that notifies the broker of this arrangement. It says: "Our carrier [your company name] has assigned their right to payment from you to us [factoring company]. All payments for loads hauled by this carrier must be sent directly to us."
Why is the NOA important?
Without the NOA in your carrier packet, brokers will send payment to your bank account — not your factoring company. But your factoring company already advanced you money based on the expectation of receiving the broker's payment. If the broker pays you directly instead, you have received double payment and are now in breach of your factoring agreement, which can result in serious financial and legal consequences.
How to get your NOA
Your factoring company provides the NOA. When you sign up with a factoring company, they will give you a NOA document that you add to your carrier packet. It is typically a one-page letter on the factoring company's letterhead that directs all payments to their payment address.
Factoring vs direct deposit: which should I use?
| Feature | Direct Deposit (No Factoring) | Freight Factoring |
|---|---|---|
| When you get paid | Net 30-45 days after delivery | Same day or next day |
| Cost | Free | 2-5% of invoice |
| Cash flow | Can be tight for new carriers | Steady, predictable |
| NOA required? | No | Yes — critical |
| Best for | Established carriers with reserves | New carriers, fast growth |
New carrier recommendation
Many new owner-operators use factoring for the first 6-12 months while they build up a cash reserve. Once you have enough savings to float net 30 payments, you can drop factoring and keep 100% of each invoice. Popular factoring companies include OTR Capital, RTS Financial, Triumph Business Capital, and Riviera Finance.