Factoring % | What's normal for a starting out company?

These are rather harsh words. The reason for Factor companies are many, I'm sure. Not all O/O's have the inclination or the desire to have a staff to allow the option of having and using a broker authority. I have made the choice to get small and stay small.
The added burden of an office does not appeal to me any longer.
For me to drive and do all the paperwork and also try to be a broker is way too much time. I need my time to drive and make money. When it is advantageous for me to factor a load I will do so. Started my "c" corp company in 2000 after using an LLC for a few years.
I've had my broker authority and used it to cover loads I couldn't handle for my customers. I would call friends in the business, never posted on a load board.
Now 75% of my work comes from the load board and I probably factor 50% of those invoices.
It is cheaper to use factoring than to have an office expense.
Good luck

 

Just starting to factor, 2.5pct flat fee, no reserve, no minimum, so will stick with quick pay for those who charge less than 2.5 or not use for those that pay quick, anyway. A/R for 6 trucks was getting a bit much, particularly because 4 are o/o at 80%. Signed on for 3 months, extending to 9 unless I cancel. Thought long & hard about it before biting the bullet.

 

I mean no disrespect, but 75% of work that comes from a load board can not possibly be enough money to survive in todays market. I hope you pay yourself legally and run your business legally. Using a load board as a carrier is a bigger pain then having shippers and hiring someone to run the brokerage side. If you are in your truck 24/7 then it doesn't matter if you're brokering your loads or not, you will still spend the same amount of time calling around to various brokers to get loads from a load board. (Not to mention the time to do the paperwork and send it in) This argument has no merit. Factoring is more expensive than a line of credit. I've seen many people go out of business using factoring services after their brokers didn't pay up. I'm not saying factoring is bad all around, you definitely need to read the contract before you sign. In todays market, a small one truck carrier would need to make at least $2/mile in order to survive legally with a truck payment. If the truck is paid off typically that means you must still make around $1.8/mile in order to just survive. 2290 tax rates have gone way up, fuel tax has gone up, insurance has gone up, truck maintenance prices have gone up. I don't see how anyone survives with a load board of $0.86-$1.50/mile loads.

 

I agree.