Can anyone recomend a good honest factoring company?

What you are talking about is the "assignment." They'll do it one of two ways.

The better deal is that you choose which customers you wish to factor, enabling you to bill direct on customers that offer better terms. Once you factor the first load for that customer, you must factor all of that customer's loads. This due to the factoring company filing paperwork to establish "ownership" of that account (notice of assignment to the customer plus UCC-related filings). A good factoring company will have an easy to follow process not loaded with fees if you decide later to "buy an account back," as-in stop factoring one of them and take the account back for in-house collection. I haven't crossed that bridge with FC, but the terms I remember of the top of my head are: account must be fully collected (no outstanding balance), a nominal paperwork fee to reverse the assignment, and your account with them must be in good standing (no big disputes pending, no outstanding full recourse un-collectibles, etc).

The not so great deal is a requirement to factor all your receivables. That can be bad news if you find out the terms you liked aren't working for you. Bad factoring companies will use a policy like this to get leverage on you and make ending their relationship very expensive and disruptive to your business. Something to avoid. Severing all or part of a factoring arrangement will require immediate payment of outstanding invoices and then some number of days to reverse all assignments. For a small operator without a lot of money in the bank, waiting for accounts to collect (could take several months depending on the quality of your customers) and then for paperwork to complete could put you out of business, since those customers legally could not load you direct without a release from the factoring company. With all your customers locked out, you're basically screwed.

I'm not aware of any factoring companies that will let you split an account, as in both factoring and direct billing certain invoices with a single customer. At the very least, the assignment process would be ugly and confusing in that scenario. Any little hiccup and your check is going to the wrong place and adding days of delay and hours of phone time for you to unscrew the mess. If you want to borrow against receivables on a load by load basis, you're better off doing advances and/or quick pay direct with the customer.

You need to call these companies you're interested in and ask anything you like. Don't be afraid to ask the hard questions or dig deeper when the answer is weak or you don't understand it. Get their contracts and read them carefully, or get legal advice if you're not clear on the terms. Don't rush into anything. If you get pressure (limited time opportunity, or you get _____ (something you want) for signing today), let it go. Never forget that hard sell is something that has the potential to wreck your business if it doesn't work. If they're in a hurry to get you on-board, in my opinion that's a major clue that it's not going to lead to anything good. I think you'll find that most of us that are happy with our factoring arrangements spent weeks exploring options carefully before signing anything, even negotiating special terms to address our concerns in some cases.

 

Red: do you have any thoughts on Apex Capital?

 

I've gotten their postcards in the mail, but have never looked into Apex any further than that. I'm sure someone has probably reported their experience in here somewhere. Looking at their webpage it looks like they offer a decent package. You'd have to contact them and get the details of course. None of them really give up much detail on their webpages.

 

I have been with TBS for ages. Not one problem at all. They even negotiate on rates. I run even non-recourse items with them to collect for me, when the company is new or not-factorable. Wonderful staff. I am happy.

 

Avoid all the mega that do the hard sell. Corp Billing or TFS are solid companies. No games and honest account reps.