Broker going out of business

You won't get the full invoice paid because their piddly nearly worthless 75k bond will have to be spread out evenly to every carrier that files a claim.

Go to Safer. Look up the broker by their MC. Click the Insurance link. Get the policy number and call the insurance company listed. Follow their claims protocol.

Then sit back and wait for whatever they give you.

What's the point in factoring if you have to do all this work?

 

That's my question too - If you're giving up a % for factoring, but they buy your paper with recourse built in to reneg on their deal with you.

Are all factoring companies like this? If so, maybe I better start one - sounds like a clear winner for a business model.

 

Usually non recourse is only if the broker files BK

 

Most likely bond is already exhausted, you gonna have to go after shipper or receiver, whoever was the broker's client

 

Anyone that's been in Transportation knows the truck is only the mule. The easy money is made off it's hairy back.

 

It's amazing how many people using factoring don't know that until it's too late.

 

The point of factoring is cash flow and credit checks. If you have a bigger operation, its very hard to avoid factoring, since not many lenders will give you money just for everyday operating expense.
When you do spot market working with tons of random brokers, factoring can help you out a lot by not getting burned.
For example DAT load board shows credit worthiness of a broker, tons of double brokers show good credit score, yet some old legit brokerages do not, so a lot of people avoid booking with them, yet your factoring can approve it and you can book some great paying loads.

 

Sounds like a business doomed from the start IMO.

 

I remember back in 2021 when I was considering becoming an O/o I was going over the Factoring Process with Brokers when operating an Authority. I even talked to my bank financial adviser about it & he recommend I take a line of credit if I need extra money to run that way. In fact I thought it threw and said, 'What type of business I am running from wait 30 days to 90 (1 to 3 months)?' Basically, depending on credit alone and went the other route of Lease on in order of understanding things better and Glad I did.. Now that I'm reading how much who have their own Authority running load boards are trying to sign onto larger carriers with direct customers invoice directly because of the current market makes sense. I figure it's got to be a super bad time if megas are filing chapter 11 bankruptcy protection! Some Factoring companies are going bankrupt too so it seems like a bad business venture with that method. Minimizing overhead expenses is something I would consider a better business model overall in this current market.