Factoring companies: which are good? What to look out for?

The IFA was not very helpful :/

 

I do not, maybe you can try and contact some of the bond companies?

 

It's actually a very small percentage. It's a lot more likely a customer will chapter 11 or 13 and hang carriers out to dry. Brokers have bonds, customers don't.
I had one very prominent customer, a very famous National company, call me 3 years ago after I had done over $300,000 worth of work for them and tell me they had failed to accrue the money and insist that I just write it off. I sued them and got my money....almost a year later. It happens all the time.

 

Hmm..I don't know any. may I PM you for the names of some?


Also, separately, do you know what the factoring rates for brokers range from?

 

Factoring rates very many, claim low rates but carry holdback a or reserve...it would take quite a lot of explaining to go over it all I'd say average is anywhere from 4-7% flat. Then 2-3 % with holdback ranging from 8-10%.

 

Just like factoring for carriers, do they factor invoice by invoice?

 

Lets say you borrow 100,000 at 4% for 12 months.
Then you factor (loan) that 100,000 at 4%.
You are now getting 24% to 48% on the 100,000 per 12 month period.
Thats where they are making there money.

 

Been there, done that.

Until that customer doesn't come through on the note and you're left with $100,000 in debt at 4% interest.

 

they still sell baseball bats though.

 

Exactly. Factoring is expensive even at 1.5% a month is expensive. It's not reasonable to operate 5 trucks or any amount of trucks pay fuel, payroll, repairs, and any other nonesense that comes up for 45 days until checks roll in. Any single truck operation could operate like this, but other than it's streching it. It is a cost of doing business. Banks won't give out huge lines of credit without collateral, so then where do you go to get cash flow.


QUOTE=ironpony;3622128]So you won't mind it when MasterCard starts charging you 60% APR? That's what 5-cents on the dollar for 30-days works out to on an annual basis.[/QUOTE]