Glossary · 63 terms

The vocabulary of factoring freight

Factoring, fraud, and FMCSA terms, each defined in one sentence first and then explained the way an underwriter actually meets it.

A

Account debtor Factoring: The account debtor is the party that owes payment on an invoice; in freight factoring, that is usually the broker or shipper that booked the load.
Account takeover (ATO) Fraud: Account takeover is a criminal gaining control of a real carrier's or broker's accounts, such as its FMCSA login, email or load board, and operating as that company.
Advance rate Factoring: The advance rate is the share of an invoice's face value a factor pays the carrier up front; the rest is held in reserve until the debtor pays.
Authority age FMCSA & freight: Authority age is how long a carrier or broker has held its operating authority, measured from the date FMCSA granted it, not inferred from the size of its number.

B

Bill of lading (BOL) FMCSA & freight: A bill of lading (BOL) is the shipping document a carrier issues when it receives freight, recording the shipper, consignee, origin, destination and a description of what was loaded.
BMC-84 surety bond FMCSA & freight: A BMC-84 is the FMCSA form that evidences a freight broker's $75,000 surety bond, which pays carriers and shippers if the broker fails to meet its obligations.
BMC-85 trust fund FMCSA & freight: A BMC-85 is the FMCSA form that evidences a broker's or freight forwarder's $75,000 trust fund agreement, the alternative to a BMC-84 surety bond.
BMC-91 and BMC-91X FMCSA & freight: A BMC-91 or BMC-91X is the certificate an insurer files with FMCSA to show a motor carrier has the public liability insurance its operating authority requires.
BOC-3 FMCSA & freight: A BOC-3 is the FMCSA filing that designates process agents, the people who can accept legal papers for a carrier, broker or freight forwarder in each required state.
Broker impersonation Fraud: Broker impersonation is a scheme in which a fraudster poses as a real freight broker, using its name, MC number or a lookalike email, to book carriers.
Business email compromise (BEC) Fraud: Business email compromise (BEC) is a scam in which criminals use a hacked or spoofed business email account to trick someone into sending money or sensitive data.
Buyback Factoring: A buyback is a carrier's repurchase of a factored invoice that the debtor has not paid within the agreed recourse period, usually settled from the reserve or future fundings.

C

Carrier impersonation Fraud: Carrier impersonation is posing as a real, established motor carrier, using its name and USDOT and MC numbers, to book loads, apply for factoring or redirect its payments.
Chameleon carrier Fraud: A chameleon carrier is a motor carrier that re-registers under a new name or USDOT number to escape a poor safety record, unpaid penalties or an out-of-service order.
Chargeback Factoring: A chargeback is an amount a factor deducts from a carrier's reserve or future advances to recover an invoice that went unpaid, short-paid or disputed.
Common authority FMCSA & freight: Common authority is the operating authority status FMCSA records for a for-hire motor carrier serving the general public, as distinct from contract authority under shipper contracts.
Concentration limit Factoring: A concentration limit caps how much of a factor's portfolio, or of one client's invoices, can be owed by a single account debtor.
Contract authority FMCSA & freight: Contract authority is the operating authority status FMCSA records for a for-hire motor carrier hauling under continuing contracts with specific shippers rather than for the general public.
CSA BASICs FMCSA & freight: CSA BASICs are the seven categories FMCSA's Safety Measurement System uses to rank motor carriers on inspection, crash and investigation data and prioritize safety interventions.

D

Days-to-pay Factoring: Days-to-pay is the average number of days a broker or shipper takes to pay its invoices, a core credit measure factors use to price, limit and monitor debtors.
Docket number FMCSA & freight: A docket number is the FMCSA identifier for an operating authority, written with a prefix: MC for carriers and brokers, FF for freight forwarders, MX for certain Mexico-domiciled carriers.
Double brokering Fraud: Double brokering is accepting a load, then secretly handing it to another carrier without the shipper's or broker's consent, often without ever paying the carrier that hauls it.
Double factoring Fraud: Double factoring is selling or pledging the same invoice, or the same receivables, to two or more factors or lenders, so each believes it owns the payment.

F

Factoring fee Factoring: The factoring fee, or discount, is what a factor charges to buy an invoice, usually a percentage of face value that can rise the longer the invoice stays unpaid.
Fictitious pickup Fraud: A fictitious pickup is a cargo theft in which a criminal poses as a legitimate carrier or driver to collect a load from a shipper and never delivers it.
Freight broker FMCSA & freight: A freight broker is a company registered with FMCSA that, for compensation, arranges truck transportation of other people's freight by authorized motor carriers without hauling it.
Freight forwarder FMCSA & freight: A freight forwarder is a company that takes responsibility for shipments from origin to destination, often consolidating them, while using other carriers for the actual transportation.
Fuel advance Factoring: A fuel advance is cash a factor releases to a carrier before a load delivers, typically against a rate confirmation, so the driver can buy fuel to run it.

L

L&I (Licensing and Insurance) FMCSA & freight: L&I is FMCSA's legacy Licensing and Insurance system for authority, insurance, BOC-3 and revocation records; its filing functions were retired on 2026-05-14 as FMCSA moved to Motus.
Lease-on FMCSA & freight: Lease-on is an arrangement in which an owner-operator leases a truck, usually with a driver, to a motor carrier and hauls under that carrier's operating authority.
Letter of release (LOR) Factoring: A letter of release (LOR) is a factor's written notice that it no longer claims a carrier's invoices, so debtors pay the carrier or its new factor.
Login.gov FMCSA & freight: Login.gov is the federal government's shared sign-in service, run by GSA, which FMCSA uses for access to Motus and other registration systems.
Lookalike domain Fraud: A lookalike domain is an internet domain registered to resemble a real company's, often by one swapped or added character, so its emails and websites pass a quick glance.

M

MC number FMCSA & freight: An MC number is the docket number FMCSA assigns to a for-hire motor carrier's or broker's interstate operating authority, separate from the company's USDOT number.
MC takeover Fraud: An MC takeover is buying, renting or hijacking an established carrier's operating authority to trade on its age and record, usually without disclosing the change in control.
MCS-150 FMCSA & freight: The MCS-150 is FMCSA's Motor Carrier Identification Report, the form a carrier files to register and update its USDOT record, including contacts, officers and fleet size.
Motus FMCSA & freight: Motus is FMCSA's online registration system, launched in May 2026, which replaced URS and the legacy L&I system for USDOT numbers, operating authority and filings.

N

Non-recourse factoring Factoring: Non-recourse factoring is factoring in which the factor absorbs the loss if an approved debtor fails to pay because of insolvency, within credit limits and terms the contract defines.
Notice of assignment (NOA) Factoring: A notice of assignment (NOA) is a written notice telling a broker or shipper that a carrier's invoices were assigned to a factor and must be paid to it.

O

Operating authority FMCSA & freight: Operating authority is FMCSA registration that permits a company to operate as a for-hire carrier, broker or freight forwarder in interstate commerce, identified by a docket number.
Out-of-service order FMCSA & freight: An out-of-service order is an enforcement declaration that bars a driver, a vehicle or an entire motor carrier operation from operating until the order is lifted.
Over-advance Factoring: An over-advance is money a factor has advanced to a carrier beyond the eligible value of the invoices it has purchased, leaving that excess unsecured.

P

Process agent FMCSA & freight: A process agent is a person or company designated to accept court papers and legal notices for a carrier, broker or freight forwarder in a particular state.
Proof of delivery (POD) FMCSA & freight: A proof of delivery (POD) is the signed document, usually the delivery copy of the bill of lading, showing the consignee received the freight, when, and in what condition.

Q

Quick pay Factoring: Quick pay is a broker program that pays a carrier faster than its standard terms, often within days, in exchange for a fee deducted from the invoice.

R

Rate confirmation FMCSA & freight: A rate confirmation is the broker's load agreement sent to a carrier, setting the agreed rate, pickup and delivery details, accessorials and payment terms for a single load.
Recourse factoring Factoring: Recourse factoring is factoring in which the carrier must buy back, or absorb a chargeback for, any invoice the debtor doesn't pay within an agreed period.
Remit-to change Fraud: A remit-to change is a request to change where a carrier, factor or broker gets paid, such as a new bank account, and a prime target for fraud.
Reserve Factoring: The reserve is the part of an invoice's value a factor holds back after the advance, releasing it to the carrier once the debtor pays, minus fees and chargebacks.
Revocation FMCSA & freight: Revocation is FMCSA's cancellation of a company's operating authority, voluntary or involuntary, after which it may not operate for hire under that authority unless reinstated.

S

SAFER FMCSA & freight: SAFER is FMCSA's public Safety and Fitness Electronic Records website, whose Company Snapshot shows a carrier's identification, size, safety rating, inspections and crashes.
Schedule of accounts Factoring: A schedule of accounts is the list a carrier submits to sell a batch of invoices to its factor, naming each debtor, amount and load, with supporting documents attached.
Spot factoring Factoring: Spot factoring is selling a single invoice, or a few chosen invoices, to a factor without a long-term contract or any obligation to factor future invoices.
Strategic theft Fraud: Strategic theft is cargo theft carried out through deception, such as identity theft, fake carriers or fictitious pickups, rather than by physically stealing trucks, trailers or freight.
Synthetic identity Fraud: A synthetic identity is a fabricated person or business built by combining real and invented details, such as a real ID number with a false name or address.

T

Termination fee Factoring: A termination fee is a charge in a factoring contract that the carrier owes if it ends the agreement early or without the required notice.

U

UCC-1 financing statement Factoring: A UCC-1 financing statement is a public filing, usually with a state's secretary of state, giving notice that a lender or factor claims an interest in a debtor's assets.
UCC-3 amendment Factoring: A UCC-3 is the amendment form used to change a filed UCC-1, including terminating it, continuing it, releasing collateral, or assigning it to another secured party.
URS (Unified Registration System) FMCSA & freight: URS, the Unified Registration System, was FMCSA's online system for first-time USDOT and operating authority applications from December 2015 until Motus replaced it in 2026.
USDOT number FMCSA & freight: A USDOT number is the unique identifier FMCSA assigns to a registered motor carrier, broker or other regulated company to track its registration, safety data and compliance.
USDOT PIN FMCSA & freight: A USDOT PIN is the personal identification number FMCSA issued to registered companies for accessing and updating their registration records online, such as MCS-150 updates.

V

Verification call Factoring: A verification call is a factor's direct check with a broker or shipper confirming that a load happened, what is owed, and that payment will go to the factor.

W

Whole-ledger factoring Factoring: Whole-ledger factoring is an arrangement in which a carrier sells all of its eligible invoices, or all invoices from approved debtors, to one factor under a continuing contract.

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