Can someone tell me what exactly a factoring company does and what is the cost of one? Thank you
What exactly does a factoring company do? Cost?
Discussion in 'Freight Broker Forum' started by Broker life, Mar 29, 2016.
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Factoring is a transaction in which a business sells its accounts receivable, or invoices, to a third party commercial financial company, also known as a “factor.” This is done so that the business can receive cash more quickly than it would by waiting 30 to 60 days for a customer payment.
CaseFreight and d o g Thank this. -
snowman_w900, Yves kanevil and daf105paccar Thank this.
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The main feature of factoring is of course quick funding when you deliver the load but there is also more features and benefit to using a funding partner. Fuel cards, load board, equipment finance, loans, back staff office...just to name a few....pricing hm, well can range anywhere from 1-5%
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BoostedTeg Thanks this.
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redvonbaron Thanks this.
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wichris Thanks this.
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redvonbaron Thanks this.
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It really isn't that difficult it's kind of like a pool. Money comes in and goes out but try to keep it at a minimum level. Everyone's level is different. Just in case the day comes someone does a cannon ball in your pool. You want to have plenty of water in it. If someone is cornered into a position where they need to factor, they aren't letting their pool fill up.
Pepper24 and strollinruss Thank this. -
My opinion is if you can't run you're business for a month or more without factoring then you need to take a closer look at you're spending habits.
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