Factoring Companies

Does that 5% have a monthly amount you have to factor. I pay 10% if I do not do at least 10,000 a month

 

I recommend Bibby, Spectrum, or Crestmark. I previously worked for TCI Business Capital and if you go with them, you can pretty much just close the doors on your company. They will have many fees that you don't expect. They will file a UCC as soon as you sign the application whichtruckers think is just a preliminary form. You will not be able to factor anywhere until you pay off their UCC, which they can charge hundreds of $$$'s because of there "due diligence" fees.

On a side note, factors really look at how much VOLUME you bring in. They really don't care about your credit, just your customers. It doesn't matter as much whether they're big or small, but sometimes they'll only factor a % of their invoices depending on their D&B rating. If you factor less than 20k per month, expect to pay 4-5% in manthly fees off the AR. It's all tiered pricing. Thus, if you factor 75k +, you will get a much better rate like 2%ish. Good luck!

 

D and S factors does not have any monthly fees or volume amounts. It is a flat 5% fee whether you factor one load a month or one load a year.

 

Keep telling yourself that if it makes you feel better. They are not lending you 100k for 12-months. They are lending you money for 30 to 45-days. The APR at 30-days is 60% for a 5% factor and 40% for 45-days. If it was 5% APR like you think then you would be paying .42% or $20.83 on a $5,000 invoice.

I understand the need to factor in this business. But it is a business and you need to understand the numbers. And I hope you have had a lawyer look at and explain the contract that you signed.

 

You have to look at it from the point of if you had a line of credit to cover you while you wait on your invoices. You may only need to have a 10k line of credit. In any given month if you have it maxxed out you may be paying $200 in interest if you had an outrageous rate of 24%.
But if you factor 10k in invoices every month at 5% you are paying $500.
The reason that APR is used in almost all loan processes is because it is a way to compare on an equal field. Some loads are short-term (like factoring) while others are longer term with compounding interest. So how do you compare the two? You figure the APR on both.

 

This is not true with all factoring companys. Most factoring company have non recoure or recoure accounts. On the non recoure accounts you are not responsable if they do not get paid they take the risk but the broker or company most meet there credit rating to be non recourse.

 

This is what i got from Freight Capital today
Program Features [FONT=Arial,Arial][FONT=Arial,Arial]• 90% cash advance within 24 hours • 10% reserve released at the beginning of each month • No monthly service fees, minimums or volume requirements • Professionally manage and monitor accounts receivable and collections • Flexible funding options: Wire, ACH, Express Code, fuel card deposit, check by mail [/FONT][/FONT]Program Benefits [FONT=Arial,Arial][FONT=Arial,Arial]• Discounted PrePass transponders • 30-Day Free Trial with 123loadboard.com • Discounted FedEx Billable Stamps Program • Free Credit Checks 24/7 online or by phone 1.800.720.4918 • Hotline 24/7 for RUSH Funding, Package Arrivals, Supplies, call 1.800.720.4918 • Automatic approval for a FC universal fuel card with discounts and rebates nationwide [/FONT][/FONT]No Hidden Fees [FONT=Arial,Arial][FONT=Arial,Arial]• Factoring fee indicated on next page • Postage, envelopes, handling [/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]$1 [/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial](per invoice) • Wires $15, ACH $9, Express Code $10, Check by mail – Free! • One time documentation fee of $[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]295[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial], deducted from first funding Please sign and fax your Factoring Agreement back to: If you have ANY questions, please do not hesitate to give me a call at
[/FONT][/FONT][FONT=Arial Narrow,Arial Narrow][FONT=Arial Narrow,Arial Narrow]Carrier:
MC #:
[/FONT][/FONT][FONT=Arial Narrow,Arial Narrow][FONT=Arial Narrow,Arial Narrow]Factoring Master Agreement
[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]X
[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]Receivable Finance Facility [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]$50,000 [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Advance Amount / Reserve Amount [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]90% / 10% [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Administrative Fee - Service Charge % [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]4.95% [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Selling Term - Service Charge Period [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]60 days [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Relationship Period [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]90 Days [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Late Payment Date [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]60 Days [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]One-Time Documentation Fee [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]$[/FONT][/FONT][FONT=Arial,Arial][FONT=Arial,Arial]295 [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Non-Recourse Credit Guarantee - Fee [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Included [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Predicated Volume [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]None [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Minimum Volume [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]None [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]Minimum Monthly Fee [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]None [/FONT][/FONT]

 

Page 2
This Factoring Master Agreement is made between Capital Partners Funding, LLC. dba Freight Capital, located at 2544 Campbell Place, Suite 200, Carlsbad, CA 92009 (Purchaser), and Seller (as specified in the signature block hereunder), and incorporates by reference the Factoring Agreement Terms and Conditions ref# 005 ("the Terms and Conditions"), published at www.CPFterms.com as if the Terms and Conditions are fully set forth herein. By Seller’s signature below, Seller acknowledges and agrees that Seller has read the Terms and Conditions, and agrees that said Terms and Conditions shall bind Seller as if fully incorporated herein, and supersede any prior agreements or understandings between Purchaser and Seller. Seller and any signatory acknowledges and agree(s) without limitation; (a) to granting Purchaser inter alia a continuing first priority interest in and to the Collateral (including but not limited to Seller’s currently existing and hereafter arising accounts) to secure the Seller’s Obligations to Purchaser, (b) to the Termination provisions therein, which provisions shall be legally binding whether or not any advances are made hereunder, and (c) that Purchaser is authorized to file an initial financing statement consistent with Article 9 of the Uniform Commercial Code.
1) Assignment and Sale. Seller agrees (a) to sell to Purchaser as absolute owner such of Seller’s Accounts as are listed from time to time on Accounts Transmittals in accordance with Section 2.1 of the Terms and Conditions (b) each Accounts Transmittal shall be accompanied by such documentation supporting and evidencing the Account as Purchaser shall from time to time request and (c) Purchaser shall purchase from Seller such accounts as Purchaser determines to be an Eligible Account, subject further to the Terms and Conditions.
2) Guaranty. The undersigned Guarantor(s) unconditionally and irrevocably guarantee(s) to Purchaser the prompt performance in full of all obligations, indebtedness, and liabilities of Seller of every kind and character owed to Purchaser, whether or not such obligations, indebtedness and liabilities are found to be invalid, illegal or unenforceable, and notwithstanding the fact that, at any particular time, no such obligations, indebtedness and liabilities may be outstanding. The obligations of Guarantor hereunder are direct and primary and are independent of the obligations of Seller or any other guarantor(s).
3) Authorization. Seller agrees irrevocably to honor any and all electronic credits and debits from, by and to Purchaser, whether by wire transfer, ACH/Reverse ACH, or any other means, into and out of the below named Bank or Fuel Account ("BOFA"). Seller hereby certifies that the provided BOFA is not a payroll account. Seller holds Purchaser harmless for any occurrence relating to the transfer of funds, including delay or non-delivery. Seller authorizes the Bank or Fuel Account provider to honor credits from Purchaser as well as debits payable to Purchaser, as adjustments to any default, overpayment, or error. The Bank or Fuel Account provider is not obligated to provide Seller special advice or notice in writing or otherwise, is fully protected, and is under no liability, in honoring the debit or credit transactions. Seller hereby grants Purchaser the limited power of attorney to (a) correct and/or execute or initial all typographical or clerical errors discovered in any of the documents executed by Seller in connection herewith, (b) make, amend or correct any filing required by the Federal Motor Carrier Safety Administration or any governmental agency having jurisdiction over Seller, including but not limited to the correction of inconsistent names under which Seller is listed (c) file or advertise fictitious names for the Seller in the name of and at the cost of Seller, including doing so through the use of a third-party vendor and (d) obtain through its agents and affiliates at any time the Seller(s) and/or Guarantor(s) credit reports from any credit reporting agency.
4) Counterparts. This Factoring Master Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all signatures were upon the same instrument. Delivery of an executed counterpart by the facsimile shall be as effective as if manually delivered.
Purchaser is not responsible for content or accuracy in the information contained herein. Seller acknowledges and agrees that Purchaser shall not issue checks to individuals, and that any checks shall only be mailed to the Seller’s primary address on file. Where applicable, terms used herein and not otherwise defined shall have the meanings defined in the Terms and Conditions.

 

Yes i did read the contract and yes they are takeing the risk if the broker /shipper meets the credit requirement. Maybe you work for one of those companys that hide behind fine print but i read mine and know what i signed. You come off as very arrogant but your not as smart as you think.

 

Anyone know anything about Apex factoring? Talked to them today and they seem on the up and up. We will see when I get a copy of the contract.