Factoring/New Authority

Everything is paid for until next year when I have to renew insurance, IRP, etc... the only things I have to pay are my wages, fuel and miscellaneous small stuff like a load board.

 

I know Landstar as cheap, often double brokering brokers, who I avoid always, they are getting on my nerve. The insurance choice should not be considered based on whether Landstar accepts it or not.

 

Out of 141 Invoices I have sent out so far, the longest ever time to wait for a pay check was 35 days (Coyote)- I go by the date on the checks and when my invoices were sent out. So the actual time to have a physical check on hand and deposit it at a bank could be up to a week longer. All paid as agreed, except Landstar, who took 1 dollar for their billing processing fee. Typically, the payments have arrived within 4 weeks. I've been using more recognized brokers, only a handful of more obscure ones (they did pay all right and on time though), never had an issue with a non payment. The DAT loadboard shows the average days to pay, and there is a check mark indicating if the Triumph - factoring company associated with DAT - allows the broker to be factored or not. I use quick pay only with TQL and JB Hunt - decision based on their Average Days to Pay at the time. Uber and Convoy quick pay as default.
My highest accounts receivable balance was at one point 28K but it typically oscillates between 10 and 20K -So I figure, by having 20 - 25 K saved up, someone can manage without using factoring. I am a solo owner with a dry van.

 

Means testing --->> the need to confirm that there is operating expenses when there is no cash flow.

I feel that the FMCSA needs to make sure that there is an accounting of at least 6 months of capital for operating expenses IN THE BANK that can be tapped not only when there is an application for an authority but also in six months of operating and again in a year.

This is the biggest issue for new authorities, they don't have enough capital to actually run the business.

AND this is one of the things that many self-employed truckers have not yet learned, this isn't an instant get paid business, it is a business that has norms, 30-60-90 days are normal. that means 4-8-12 weeks of waiting to get paid is normal, not an exception.

This isn't new, it has been this way to do business for more than 160 years in the world and in this industry for the past 60. No one should expect to be paid instantly unless they want to give up something, like when it is factored out you pay a percentage but there is no excuse to operate load to load and hoping to be paid.

So my suggestion is to learn how to run a business right, and put yourself in a better position before you decide to go off on your own.

 

Everyone’s operating expenses are different, so I’m not sure how anyone could dictate to someone else how much money they need in the bank. Some guys finance their equipment which will give them more money in the bank compared to another guy who paid cash for the whole operation.