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

There are non-notification factors that allow the client to manage his/her own receivables, but these are typically restricted to larger companies with very good financial controls and reporting abilities.

 

Why would a broker want to factor their invoices? Since they don't need to make immediate purchases like carriers do (fuel, wages, repair, etc), do they do it JUST to offer quick pay? Is quickpay that important?

 

They could need the money to pay their carriers with quick pay.

 

Excuse my ignorance with this question, but what why do brokers want to offer quickpay? So carriers will be more likely to haul their loads? Any other reasons?

 

That's because many O/Os are about 50-cents from bankruptcy. It's either quick-pay, or forget about the next tank of fuel.

 

So, you'd say its a requirement?

 

Judge much?

 

What do you think, Thomas? Why are brokers keen on offering quickpay?

 

A carrier can see quick pay as reduced risk. Money in hand now instead of later. Especially for an unknown and/or new broker. Meaningful for a one-time booking, not so much if you do more loads. A claim on an old, settled load can just as easily be swept from a future settlement as posted in a demand invoice.

I've been offered and accepted quick pay or COD terms by brokers that have weak credit reports. Established and otherwise ok companies that had some recent issues.

There are also carriers that just won't book loads on 30+ day terms. Offer a reasonable quick pay option and they will call. I know a guy that is in this group. To me it sounds irrational. But hey, it's his business and he runs it however he wants. He's far from broke, and could easily extend terms. But he chooses not to.

Maybe a broker will stumble across this thread and add more. I don't know enough about that end of the business to guess any further.

Those that think anyone who uses factoring is irresponsible or broke need to get off their high horses. It's pretentious and adds no value.

 

I currently work for a factoring company, and i totally agree with Redforeman..Factoring or taking quick pay to me makes more sense than having to keep up with old money and account aging. If I ran my own truck, to me id would probably factor most of my loads...to me the small percentage of money given up is worth the saved head ache, and keeping track of past loads..I deliver, submit my paperwork, receive my payment, and I focus on driving and my next load...Not hounding brokers about trying to get on time payments ON TOP of juggling my next job or driving. We work with many large companies that are far from broke, but they do it because in a lot of cases factoring bills can be financially smarter...Thats my $.02...and its not just because i work in the business...