What's the pitfalls of factoring

You need to pay them within 15 days to be legal.

 

You need to check and see if the 30-60 day brokers are covered by the factoring company you want to use. I know that D & S will not factor some loads that have brokers above the "30 days to pay" average mark. Other factoring companies may use them but may charge more. If you want to know if D & S will factor some of the brokers you have in mind, PM the MC numbers and I can look them up on the D & S website.

D & S also gives you free credit check service on the internet truckstop website, you only need to factor one invoice a month with them to get it. i think its about 35-40$ a month by itself.

I use them because I have very little reserve capital, I cannot wait for the 30-45 days it takes to get the $$$. If I drop the trip(s) in the tripak drop boxes (free as D&S provides the envelopes) or o-night it (with FedEx it costs me though) on a Monday, then money is in my bank account on Wednesday.

 

So is the trip pack and fed ex the only way with D&S or can you also scan and email them in for quicker turn around? And just out of my own curiosity, how are things looking for you as far as being able to get out of factoring in the future? how long do you think you will personally have to do that with the way things are going for you in the early stages so far? I am just curious on these things, from reading your posts it looks like i will probably be getting started in a pretty similar low budget way like you have. Seems to be working for you so far, i like to know how things work out for different people.
Sorry if this is a thread hijack, i cant PM yet.

 

No they will only take tripak, no scanned documents. You can send the originals anyway that you like (snail mail, fedex, ups, etc.). Its just that the trip pak envelopes are free from D & S and the drop boxes are at most major truck stop, and they get to them overnight.

I will have to factor for a while I dont have much capital and I certainly dont have enough capital to cover a full month to a month and a half of expenses (insurance, fuel, repairs, etc.)

The only big mistake I made was not getting the apportioned plate. I had planed on renting a trailer, but because of my credit they would not rent to me, so I had to buy a flatbed which took all but a little bit of my capital. I live in California so I can run north to south and back. In California the apportioned plate is around $2500. But the regular California plate I can pay monthly. I can travel into other states but the permits costs are terrible, in addition to having to pay a permit company to get them on to of already paying California for a plate!!!

I Will be getting it in the next month or so, so it will increase my mileage per week as well as increase the availability of loads.

Feel free to ask any questions you wish.

 

Well, one pitfall is that you lose the percentage, obviously. Another is (or at least the one we go through) is a pain in the butt with the paperwork. They tell me to make the invoice a certain way, and then told me if I did not change it to how I originally had it then I would be charged a fee. The one we have only charges 2.15% though... way better than that 5% BUT we pay our own Trip-Pak... what is better??? I'm not sure but I think we'll stick with what we have right now.

Another pitfall isthe credit-checks you have to do with them... it's just time consuming at times - and when you forget, they charge you $5.00 or something like that. We love getting the money quicker though... so can't complain too much.

 

Is your factoring non-recourse? What is the company you are with?

With D & S they assume all the risk of getting the money. You are only liable for cargo claims against you by the broker/shipper that result in a reduction of payment, but technically the broker has to pay the full amount to you regardless of the cargo claim because it is a separate issue that is dealt with by the insurance company. But other than that they will not come after you unless you defraud them.

 

i got a question. what if i deal with three seperate brokers just so i can keep my runs within my state, but my factoring company will only accept invoices from two of them. can i get another factoring company to compensate and pick up that third broker? or am i limited to the number of factoring companies i can be signed with?