You do need to do your homework when it comes to finding the RIGHT factor. I don't have a problem using a factor, although I have not used one in a while. Ask lots of questions. It is important to pay close attention to the fine print. Make sure you read and completely understand the contract before you sign. It is sometimes better to just walk away from a bad deal. I don't sign contracts that are not in my best interests. Dealing with a factor is no different than any other business relationship.
Factoring companies: which are good? What to look out for?
Discussion in 'Ask An Owner Operator' started by last load, Apr 10, 2013.
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I can tell you not to use foleys carrier services (bird dog) they will totally rip you off
silver dollar Thanks this. -
I factor with Match Factors Inc now, for over 2 1/2 years, and not one single problem yet. And not one charge back. -
Financial carrier services out of noth carolina stay awayyyyyyyyyyyyyyyy the worst factoring ever im telling yall this they are all sharks and motherffff
silver dollar Thanks this. -
If you don't want to use a factor you could only do business with brokers who offer quick pay. In other words, they will pay within 24-48 hours for a discount on the rate. Some offer a discount of 1 1/2-2%. More brokers are offering a quick pay option. One thing that we seem to forget in this industry is that we should be the ones setting the terms for those with whom we do business. If customers (brokers or shippers) don't want to comply with our terms of doing business, then move on. Find customers who will agree to meet your terms. I have never been involved in any other industry where the customers dictate the price that is charged by vendors (trucking companies) and the terms ( COD, prepaid, net 30, etc.,).
Davidlee Thanks this. -
It would be cheaper to finance it on your credit card. 5% charged by a factor for 30 days is 60% APR.
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I know many people like the 5% flat-rate approach. I think it works for customers that take more than 60 days to pay, but if your customers pay quicker, there are cheaper pricing structures out there. -
It is silly to give away 5% of the load profit.
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There are advantages to using the "right" factor. It can help your cash flow without incurring debt. One reason that I used a factor at one time was to track payment history. Not all factors charge 5%. Some charge more and others charge less. If the factor is recourse, rates can be less. Some of the world's largest corporations use factors to improve cash flow. I would prefer to not use a factor for the long term. It is always better to run on your own money when possible. Using brokers who offer quick pay is often a better option than using a factor since the rate is usually much lower than a factor may charge. Another option is to establish a commercial line of credit with your bank. There is usually an annual fee for the line of credit and you are only charged interest on the money used. The rate for a line of credit would be less than either using quick pay or a factor. Most banks want to see financials and at least 2 years of history. Using hard assets to secure the line of credit may also be an option. Hard assets would be something like real estate.
KeyFactor Thanks this. -
silver dollar Thanks this.
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