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

One thing to take into consideration is that the factors sort of have your accounts by the balls though. I’ve heard nightmare stories if you want to get away from the factoring. They make it as hard as possible. So much so that most people seem to just stay in the relationship even if they no longer need it. Reminds me of a tick or leech.

I’m not in favor of factoring but I did recently meet a gentleman that seems to do very well despite it. He’s growing his company just fine.

 

That is a way to operate a company with no assets or responsibility.
walk away at anytime with no repercussions.

 

People that don’t understand math borrow money .
People that do understand math loan money.
People that understand the most are business people and they become wealthy. I remember when Jerry Moyes took over Central refrigerated. He was able to do that because he loaned them money.

 

I’ll factor anyone at 5% lol.

Let that sink in... save up the money to run on your own folks. Growing too fast, too quick can easily be devastating. It took me 10+ years to get to 10 trucks and a brokerage all on my own money. I had $1000 to my name 12.5 yrs ago.

 

You have ppl out here been factoring for years , could have taken that money and put in a long term investment fund or invested in some real-estate. Make your work for you not the opposite.

 

How much do you think it would cost you to hire an employee to handle 500 invoices a year? Follow up, bookkeeping, data input, salary, credit checks, payroll taxes, paid time off, paid holidays?

More than I pay to factor $1M and there’s a team of bill collectors behind you that have industry pull. You think a one man show has any pull with a broker who doesn’t pay?

A lot more to it than just paying a small fee to sell an invoice. Doesn’t even take into account that if you can’t negotiate an extra $100 on a $5k load to cover that fee, well that’s a whole other issue.

Everyone runs their business different, but man there’s a lot of stupid out there. It doesn’t get any more basic with math than this.

 

That’s such a stupid statement. Negotiate more money so you can give it away? Wtf am I missing here?

 

You’re obviously missing a lot.

 

So your factoring company handles all your bookkeeping, payroll, and taxes? If so, you have a good deal at 2%. The fact is, you still have to do bookkeeping, even with factoring.

Most factoring companies are multi-million dollar companies, all made off the backs of trucking companies, because they can’t wait 30-60 days to get paid. There is big money in factoring.

 

A lot of business factor invoices not just trucking companies.