help with choosing factoring company

No
Don’t do it
If you need a factoring company then your not financially strong enough to be in business for yourself. Strengthen your balance sheet and cash flow statement.

 

Well I can tell you read the fine print.

I have never factored I just remember some time ago reading about it and there was something in the fine print for many of them that was not good.

Someone may be able to elaborate further on that I just don't remember what it was.

 

Most want you to be locked in for 1 year. Some offer 3 months but not many.

 

Use Convoy and Uber apps for a while to book your loads and build up a cash reserve. They don't charge for quick pay, and deposit the money directly into your account within 2 business days. Like somebody else said, if you're just getting started and already need factoring, you aren't ready yet. Convoy and Uber are far from perfect, but they don't care if you're new, and depending on where you're located, they can have some great paying loads, particularly Convoy. Uber can be a pain in the butt.

 

I looked into factoring due to a slow paying customer years ago. I was very disappointed with what I found. No such thing as "no recourse" and they want way too much personal as well as private business information.

Apex literally wanted a written letter from said customer that spelled out specifically what the rates were. No way!

If you don't have 10k/month to pay for fuel then you shouldn't even be in this business. You'd be much better off using cash back credit cards instead of factoring.

There are so many threads here about factoring. A simple search will answer your questions ten fold.

 

Lease on with a company that pays weekly settlements for a couple months. You'll get paid every Friday and you can start building money that way.

 

What most have already said....don't do it! If you are strapped for cash and unable to take the time to save some for operating capital, look into invoice financing via your bank. Also most brokers have quickpay available for a ridiculous fee. If you have not researched what the factoring companies use, search UCC filing. They basically own you and everything you own. And it's extremely hard to get them to release you without a bit of a fight, they hold all the cards and have you by the short hairs with no incentive to let go.

 

Here: Factoring bad, cash in the bank, good.

 

I promise you that you will NOT find a factoring company that will tell you or explain in simple English how much it will cost you to switch company's or quit factoring. That's because it cost thousands of dollars to terminate the contract. And you can NOT use ANY brokers that you have factored until that contract is terminated and you have a "release letter" in your hands. The typical wait time to receive a release is 60 days, but it can drag out way longer than that. So don't expect to use any broker's you factored for over 60+ days when you want to quit or it will reset the clock all over.

Also if you want to quit factoring you'll have to wait til the year-end when you signed up to quit or you'll have to pay thousands for early termination. And you'll have to give them notice that your quitting 60 days in advance or it automatically renews. Don't use any broker's in that 60 days either that you factored also called NOA notice of assignments.

The factoring company will put a lien on your business through your state corporations registry office. This means the factoring company owns your accounts receivables and can force you to pay them if broker's fail to pay.

And that part about "oh will take care of collecting from the broker's and even if they fail to pay your covered and you won't be responsible for it" is 1000% a lie! They will take money out of your reserves or other good paying broker's to cover one's that fail leaving you short.

Oh and if something comes up, like freight that is short on the BOL or something that is maybe damaged, factoring company will not pay you until broker collects from your insurance company weather or not it's your fault.

I've been through 2 factoring company's. E Capital and Financial Carrier Services and its a total nightmare to quit or if there is any problems