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

I too use d&s factoring, you don't have to turn all your invoices in to them, but the ones you factor you cant bill them until d&s gives you a letter of release, from. this will happen with all factoring company's and the reason is that it protects both party's. now the good reasons I use them is that they don't require anything from you but the confirmation and they pay for trip pack and if you want it faster you can e-mail it in if the brokers ok with e-mail. I consider it as just another expense. far as recourse go's don't believe them when they say no recourse. just call them and they will explain it all to you. and don't hall cheap fright.

 

Choosing between Transam (I guess they factor bills too) JD Factoring and TBS. Any recommendations? All offering full advance and Transam is only non recourse company, but they have best extra freebies like tire discounts. Any advice fellas?

 

Unless they've changed in the past 3+ yrs, Transam has a blanket POA in their agreement. In other words, if they decide you're in default, they can go to the courthouse and take title to everything you own. When getting down to a short list, I took this topic to a "supervisor" that started screaming at me (for real) and suggested I was a criminal looking for an angle to scam them. Right before I hung up on him.

 

So stay away from them? Sorry for sounding stupid, but what do you mean they decide I am in default?

 

Yes. There will be a section in the terms & conditions describing default. Read that carefully. One wrong move and the warm fuzzy stuff is out the window. POA = Power of Attorney. With that, they can sign on your behalf to transfer title, in the case with Transam I saw, it was a blanket POA. Meaning it covers everything you own. That's a bad thing.

 

Stay away from the ones that advertise heavily and do more non-recourse than recourse.

Told red a would get him the number of a boutique factoring company that I know of. The owner is Mark Baker and I will be having lunch next week with him and get some details. He may not do smaller accounts but I will check. I know he will buy out other accounts.

 

If anyone on this thread has a story of a dispute with a factor that ended up being resolved to a reasonable compromise instead of the factor just exercising on the POA, that might be more meaningful to those looking for a factor. Agreements are drafted by lawyers and they can all look scary; the question is, how do factors really work with their clients. I think the same comment can be applied to any of your business partners...choose carefully!

 

To be fair, I haven't heard of any going nuclear with the POA. Most of the bad ones I've heard are done by tying up seller's (the carrier) accounts by refusing to fund. Usually a default, intentional or not. Also worthy to be aware of: a debtor (broker or direct shipper) dispute. That could impact multiple sellers that might have loads on the road expecting to be funded on delivery, or collections pending and a reserve balance at risk.