Factoring Companies That You Recommend For Owner Operators?

I don’t agree with staying away from Factoring Companies. Definitely do your homework and stay away from the STICKY contracts, usually tends to be the big name ones. But there are several great smaller factoring companies that have been around for years and do an amazing job. They help you take on work from direct suppliers with 75 net day terms, plus they have helped keep all my paperwork in order for when tax season comes around in reference to how much I ran. It’s so much easier to handle with one call to my factoring company. They also provide you with a credit check tool that helps you decide if you should run a load from some of these shady brokers or not. Plus - let’s not forget it’s a SERVICE, so it is a tax write off at the end of the year! You need to think like a BUSINESS. Trying to hold onto every penny sometimes isn’t the best choice in business.

 

I would bet you work for a factoring company.

The old "it's a write off" is laughable.

Would you rather spend money on something you don't need just to write it off or pay a little tax and keep the cash?

 

I like write offs, but I’d rather spend it on tools/equipment or Atleast something good….

 

Why send the government $300 when you can give $1000 to a factoring company?

 

Hey man, it's more fun that way, or something. I'm not sure how, but, y'know.

 

Doing a check on a broker can go as quick as a little as five minutes. Taking care of your paperwork is pretty much the point if you want to go in business otherwise you would just wanna be a driver. Giving up a percentage of your income for that little bit of service pretty expensive. Let’s say you’re in business for 10 years and you give the factoring company a certain amount of percentage. Calculate that in 10 years and you could probably buy a truck.

 

Food for thought.

Factoring company taking 2% is essentially loaning you money at an 24% interest rate.

You would be better off going to the bank, borrowing $40k or whatever your 60 day cash flow is at 10% APR.

Better yet, get a line of credit to cover operating expenses until the cash flow comes in.

Any factoring company is going to do chargebacks for customers that do not pay, they are not taking that risk.

The only thing some of them do that is of value and worth potentially paying say 1-1.5% for is they handle billing, invoicing, late pay calls and follow ups etc.

If you are just starting out but are under capitalized, its like putting your fuel and operating expenses on a credit card. Fact you might be better off doing that since at least you can get some rewards points...

 

I use OTR Solutions. They charge me .03% for any load that I factor. They don’t make you factor all loads as some other factor companies do. I personally use them on brokered loads. I direct bill all my direct freight. I get unlimited credit checks and they will send out notices on companies that they will no longer factor. That in itself is worth the .03%! This is a flat rate factor company. Once you factor a load you will never hear anything else about it. If you choose to use a factoring company I would definitely recommend that you consider OTR.

 

You mean 3%?

0.03% is unreal.

 

Say what? If he gave them $100 000 worth of invoices to factor at 2%, then they would charge him $2000, not $24000, ain't that right? I mean why call it an interest rate instead of a fee, an interest rate involves time, whereas factoring fee is just a cut thet take? Just asking, because I am confused, never been good at math either.