ACH.

What it is

ACH stands for Automated Clearing House — the US electronic bank-to-bank transfer network operated by NACHA. It is the rails behind direct deposit, vendor payments, recurring bill pay, and most factoring advances. Standard ACH settles in 1–2 business days; Same-Day ACH (rolled out by NACHA in phases starting 2016) settles in 0–1 business day depending on submission cutoff.

ACH is materially cheaper than wire transfer — typically $0–$3 per transaction versus $15–$50 for an outgoing wire. There are two flavors. ACH credits are incoming transfers (a factor depositing an advance into the carrier's account, a broker paying an invoice). ACH debits are outgoing pulls authorized by the receiver (a loan servicer auto-deducting a payment, a fuel-card provider settling a weekly balance). Most factoring funding hits as ACH credit; most loan repayments come out as ACH debit.

Why it matters for trucking finance

Factoring funding speed often hinges on ACH timing. Same-Day ACH costs slightly more but lets a Friday-afternoon invoice fund Friday night versus Monday morning — often the difference between making weekend fuel and parking the truck. Some factors charge per-transaction ACH fees (small, but adds up over hundreds of advances). Wire transfers settle faster but are 10–50× more expensive. Knowing the ACH cutoff windows (typically 4–5 PM ET for Same-Day) means timing invoice submissions for fastest funding.

Related terms

• Advance Rate — The percentage of an invoice's face value that a factoring company advances to the carrier, typically 80–97%; remainder is held in reserve until broker pays.
• Lockbox — Address or bank account designated for invoice payments where the factoring company receives broker payments directly, used to control collections.
• Recourse Factoring — Factoring arrangement where the carrier remains liable for unpaid invoices if the broker fails to pay; lower rates than non-recourse.

Related Dispatched products

• Invoice factoring for truckers
• Trucking working capital