Factoring, Brokers, Dispatchers and Loadboards

So, I know most say you should have enough capital to not need factoring, well, I don't and I do. Its an answer that will have to do. And before I get someone telling me to look on the forum, I have. But most didn't gain much attention or ended with people constantly telling them they shouldn't need to factor if they had the capital. Also I would just like to know from the hotshotting community.

So, anyway. I am starting up here in the next week or two and still looking into factoring. I don't wish to have to chase companies for payment when their workers get paid in a week or two weeks time. So, factoring becomes something to think about. Who here factors and what has your experience been? Perhaps indulge us on the name of the companies you have worked with, rates, contract terms...

Same for dispatchers, brokers, dispatchers and loadboards. Who have you worked with and what has your experience been like? Fees?

Thanks for your input!

 

None of my business, but asking for contacts directly - well, good luck - most are had fought/worked/won.

Right now with platform work in general, things are lean. Know that every flatbed that looks at you - sees you taking bread off the table to begin with, at least right now. They also look at duct taped cable tied carriers running cheap to make payments the same.

If you have to factor to begin with, and are not prepared to self fund your business - realize you may quickly find yourself in the aforementioned 'less desirable' business positions.

No offense intended - please don't reply to this comment, it's just my 2c. It's a little tough out there right now.

Good luck sir.

 

A lot of brokers will advance your pay for a percentage. This percentage is normally lower than a factoring company. When filling out the paperwork to get set up with the brokers a quick pay option will get your pay into your bank account ASAP This usually takes about 3 to 4 days.

 

Technically, I can self fund but its more of a rainy day fund. I would rather not mess with the nest egg until I can replenish it easily. If that makes sense.

And I understand drivers protect their own finances and everyone on the road is competition. I was just curious for experience earned over time with anyone in particular. TAFS factoring seemed ok, bit high on the fee rate but, i don't have to factor everything with them and I can choose to wait for the shippers to pay me and that was a key feature. I hate the yearly contract but was told I could factor 1 or 2 loads through them and not mess with them afterward through out the year but i couldn't factor elsewhere which is expected.

DAT loadboard also seems to be promising for finding loads but i have no experience so who's to say that I am wrong.

 

Hi Miroh
I hope your business is doing well!
We were looking into TAFS as well. Did you end up using them or going with someone else?

When we talked to them a few days ago they said we could factor 1or 2 loads through them but when we talked to them yesterday they said we would have to factor everything through them.

 

Howdy! I had considered TAFS and know someone using them. They dont seem to mind them. But I'm with Apex Capital. I'm pretty happy with them and save a bunch with their fuel card. I dont have a single complaint. Pretty much any factoring company will want you to factor most of your loads through them. I can and have taken COD loads through companies I know personally. They dont seem to mind it here and there. I'm sure there are some out there that dont mind being a part time factoring company, I just didnt want to chase down what was owed to me.

 

We thought about Apex too. We had one factoring company tell us that Apex was to big of a company for out needs. We only have one F350 with a trailer. Are you hotshot or a big rig?

 

Yeah, I'm a single hotshot. I have good weeks and I have bad weeks. They seem pretty relaxed with how my business is running. Right now I run for 3 weeks and go home for a week and they dont reach out wanting to know what is going on. Now I was down for about 3 weeks due to some issues early on but i reached out to them before hand and let them know what was going on and they were ok.

The one thing that might worry you is they typically only ok credit for brokers that are mainly rated at paying within 60 days. That worried me too at first because all the ones trying to get my business ok'd those up to 90 days. I've ran 55 loads so far and of those, 1 load went over 60 days which they weren't known for. Apex contacts brokers several times throughout that window until they pay but as it reached close to 60 days, they called me to let me know that account was about to age beyond the 60 days and let me know what was going on. The broker had paid for one but not the other and said if I reached out as well it might push them along to finish payment. I did, the broker paid and i havent had to call another broker for payment since.

 

So you've been doing this for a few months now, is there anything you wish you had done different?

 

Next to no large companies self fund themselves. Most large companies carry a lot of debt. Paying someone a small percentage to factor your loads keeps your cash flow rolling not to mention it means you don't have to chase brokers for payment or try to figure out if you've been paid for a load you did 2 months ago.

Not to mention it's not smart to burn your cash reserves as a new company. You can finance your load payment via a factoring company for a few %. However you might need a new transmission or a motor rebuild and you aren't gonna finance that in most cases short of using a credit card if you run out of your cash because you are trying to self fund..

No reason not to factor your loads, in fact it's kinda silly not to as a new company. Hell I bet a lot of bigger companies also factor their loads as well..

There is responsible use of credit and irresponsible use of it. Buying all brand new equipment and having no experience in the industry is a dumb way to run a business. Factoring your loads and keeping your cash reserves is a smart way to do business..

Also no one cares what some flatbed driver thinks of me "stealing" his loads or if he doesn't like me taking up a spot at a truck stop.. I pay my own insurance, I paid for my own authority to have numbers on the side of my truck.. Anyone who has issues with me hauling on what I choose to haul on that has no say in my business. Well they can go cry at the Iron skillet counter..