---
title: "Concentration limit"
url: https://carrierkyc.com/glossary/concentration-limit
description: "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."
---

# Concentration limit

**Definition:** 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.

Also called: Debtor concentration, Concentration cap. Category: Factoring.

Concentration shows up at two levels. At the portfolio level, you cap total exposure to one broker across all clients, so one broker failure doesn't sink the book. At the client level, you watch how much of a single carrier's volume comes from one debtor.

If you fund through a bank line, your lender may apply its own concentration limits, so receivables above a set share from one debtor may not count toward your borrowing base. Set your internal limits below the lender's so you are never forced to stop funding a good client in the middle of a week.

> **Red flag: Red flags** A new carrier whose every invoice comes from one small or recently authorized broker. That pattern fits real dedicated lanes, but it also fits collusion between a carrier and a fake or friendly debtor. Verify the broker independently before you fund past a modest limit.

Review concentrations weekly alongside [days-to-pay](https://carrierkyc.com/glossary/days-to-pay). A large debtor that is also slowing down is where losses build. The [broker credit guide](https://carrierkyc.com/guides/broker-credit-and-days-to-pay) covers how to set limits per debtor.

## Related

- [Account debtor](https://carrierkyc.com/glossary/account-debtor)
- [Days-to-pay](https://carrierkyc.com/glossary/days-to-pay)
- [Broker credit checks and days-to-pay for freight factors](https://carrierkyc.com/guides/broker-credit-and-days-to-pay)
- [How to verify a freight broker before you fund their loads](https://carrierkyc.com/guides/how-to-verify-a-freight-broker)
- [Carrier risk check](https://carrierkyc.com/tools/carrier-check)