Quitting factoring

Not sure what DOCKING means, but feel somewhat like maybe I farted in church.
You imply you have multiple trucks and how far could you run them on 20K?
Not long enough to get checks rolling in.
Maybe I missed your point,if so I apologize.
But how can you avoid the high O/R?

 

Many factoring companies out there. Some good some not so much. The helpful side of these companies is they keep a close eye on broker/freight companies and can usually detect the bad or going bad brokers before a single truck company could find out.

 

I have not used a factor in several years. It served a purpose for me at the time. The factor I used didn't require that I send them all of my receivables. That is one reason I went with them. When I canceled my contract with them, I had not sent them anything in probably a couple of years, so it was fairly simple to cancel our agreement. Another reason was when they sent me an addendum to our original agreement which I would not agree. I have a friend who used them for a while and his experience was a little different. He had a claim that was charged back and the factor didn't inform him. It was not a good experience. He left them and went with another factor. He was hit with some fees with the new factor when he decided to leave them. He no longer factors and is doing well. You must read all the fine print in those contracts. Some have really high fees attached that can come back to bite you later. I looked at quite a few factors before settling on the one I chose. It was a good relationship for several years. I don't know if I would go back with another factor. Those with whom I do business pay promptly and I have had a long relationship with most of them, so there is little need for me to factor.

Starting out factoring can be a good way to finance your business without accumulating debt. I think factors have gotten a bad rap in some cases. They provide a service and assume most of the risk for your business. If the economy crashes you don't have to worry about repaying a line of credit or servicing a loan when using a factor. But, there can be some pitfalls. Some require a minimum amount of business each month. Others have fees if you don't factor and others require that you send them all of your receivables. I would not want to use a factor that required me to send them all my receivables. They assume a risk and perform a service. You can't expect them to do that for nothing. But, you also need to protect yourself. If you are thinking about factoring make sure to fully understand the terms. It might even be worth it to run their contract by your lawyer. I don't see factoring as a permanent solution for cash flow problems, but it can be a good stop gap way to grow your business.

 

It is always good to hear a intelligent and positive post. Thank you RED, and good luck!

 

Sorry to hijack the thread..

BUT,

Can someone, put up a link to dannythetrucker's thread??? (So as I can compare stories)

Seems I'm a bit too dumb to find it

 

Glad it worked out for you. I am still not entirely free from evilCapital. Landstar sent a check to them by mistake despite the fact I sent a general release. As usual evilCapital made no effort to email or phone me, send mail or contact in any way. Took 5 phone calls and 1/2 day just to get someone to admit they had my check. Then they wanted me to fill out forms to prove it was me.

Ridiculous, its Danny's check, send the check to Danny or return to Landstar. Something..... Payday loan is a bit dramatic, no Payday loan place would operate in as crooked a manner as evilCapital.

 

Glad to hear everything went as smooth as it did for you. Great post. I am so glad that I sucked it up and pinched every penny I could for that first 45 days til the money pipeline got full and started flowing. Much like you I was down to a few days left before I was in trouble but fortunately the checks started trickling in and we made it over the hump. My thoughts on factoring, quick pay etc are this. I am fundamentally opposed to PAYING someone to pay me money that's owed to me in the first place. If you look at factoring and quick pay in that light its easier to stay away from.

 

Its a legalized shakedown for .,..,,....,...........well you know.