Factoring math...let's not make it convoluted.

No different than borrowing 5000 from your bank, when the customer pays you, you pay the bank. You don't like the word "borrow" so you discount the same amount of money over and over again, when in fact you only need it one time.

 

If a 15 to 20 truck fleet doesn’t have 400 to 500k cash on hand. They are in trouble and don’t even know it. The argument that a 20 truck fleet is any different then a one truck op is silly. A 20 truck fleet will just fall even harder. Mistakes compound and happen quicker.

 

I enjoy Fuel Mileage Friday vs. Free For All Friday myself lol

 

2% of the gross is what % of the REAL net.
That"s right out of your pocket.
2% of the gross is not a realistic number.

 

Still has the same resault.
You have 0.
You borrow 5k, you have 5k
Customer pays you 5k, you have 10k
You return 5k, you now have 5k.

Do it monthly for 12 months and at the end of the year you have $60k minus the 2% fees totaling $1200.
Not 5k which you paid monthly on for a total of 24% fees at 2% per month like you stated in your initial example, no matter how you look at it, your example completely ignores the additional money being added to the equation.

 

Are you only grossing 5k a month?

 

Look, when you're making the kind of money @TallJoe is, paying 2% to 3% for your money within a couple of days is like a ham sandwich relative to the rates he's fetching these days

I wish a math whizz would use the APR method of calculation.

 

But if you actually used APR it blows your whole theory of how cheap factoring is. They don't try to use a LOC because, well they don't have the credit to qualify. They don't use cash because, well they don't have any.

 

My theory that factoring is cheap? Where did I say that?