Factoring Companies-worth it?

Discussion in 'Ask An Owner Operator' started by chrissan, Jun 24, 2021.

  1. chrissan

    chrissan Bobtail Member

    Jun 24, 2021
    New here, just wanted to pick some brains about factoring companies. What do you all use and what are the best options out there for a 1 truck business. Any input appreciated, thanks!
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  3. dztruck

    dztruck Light Load Member

    Feb 22, 2017
    If ur starting out and absolutely need the money, i can understand factoring.

    Once u feel comfortable, i wouldn’t use them, its just giving up money

    i use to use RTS when i started on my own, they do some shady things like holding your money if u don’t have enough loads.
  4. xsetra

    xsetra Road Train Member

    Aug 21, 2011
    Line of credit or savings is your best bet.
    Instead of factoring use brokers or shippers that offer quick pay.
    No long term contracts.

    I did use a factor for 3 years. I was satisfied but the amount of money I paid in fees added up quick.

    Try not to use a factor.
    Good luck.
  5. Midwest Trucker

    Midwest Trucker Road Train Member

    Aug 31, 2018
    Run on your own money. Think of factors as making a deal with the mob. It’s easy to get started but about impossible to get out.
  6. RunningAces

    RunningAces Medium Load Member

    Jul 2, 2017
    Not unless you're absolutely cash poor and can't get even a little extra capital at the beginning of your ill advised business venture. Also, don't listen to the ####ers on youtube shilling for factoring companies, they get a big kickback for every sucker they send to them.
  7. 77fib77

    77fib77 Road Train Member

    Jul 7, 2010
    St Louis


    Honestly are there enough pay quickly brokers that you can get around it for a couple of months until the cash reserves are built?
  8. TallJoe

    TallJoe Road Train Member

    Apr 12, 2016
    On one hand, if this is one truck business and factoring is needed then it could be an indication of a false start.
    On the other hand, the equipment acquisition may consume a lot of cash and you still need some stashed aside in case of repairs. If the business is new, lines of credits as alternative may not be available either.
    If I had to, I'd d go with a well recognized factoring. Triumph - the one associated with DAT load board or Truckstop.com factoring - that one seems to be straightforward in the contract....may or may not be used. I signed up with them 1.5 years ago, put them on the back burner but never factored a single invoice. They never cost me a dime. The canceled/suspended my account by now. The idea was to factor only those brokers who are of a higher risk but still factorable by Truckstop.com but I somehow did not use neither less recognized/higher risk brokers nor the factoring
    It is important to read the contract and understand it. Especially, the aspect of getting out must not be vague.
    Artax Thanks this.
  9. MLC Adventures

    MLC Adventures Light Load Member

    May 2, 2021
    Less headache, no billing, no collections. Take a pic and done. Worth it IMO, and I can afford to wait 45-60 days. I got into trucking for more free time and less paperwork though
    GYPSY65, Bean Jr., mwhjr1988 and 2 others Thank this.
  10. theSoz

    theSoz Light Load Member

    Jan 24, 2020
    In this business everyone has a negative story about a company, a lease, a brand of truck and yes factoring. No one really comes online to tell you how great some business is, they only come online to tell you about when things go wrong and ruined their day. Having said all that…factoring is a shady business, imho, I’ve heard too many horror stories about keeping people money for not doing enough business, not paying someone because they don’t have enough in house credit or points and the rates are never the same for everyone.

    Now days, these brokers and companies have their own payment options. Keep in mind, the faster services the more you pay. Same day payment or 1-2 day payments usually around 1.5 -3% Sign up for direct deposit it’s cheaper, sometimes free. Most of these guy pay within 2 weeks and the slowest take 30 days. You’ll get paid faster if you do direct deposit to a bank or card (comdata included) but you can alway opt for the old school paper check, just know you’re going to wait. The longer you wait, it’s free. I’d rather bay someone 2 or 3% to the company that actually owes me money than pay that or more to a middle man. JB Hunt, Amazon, Coyote, UberFreight, all have quick pay options. Do yourself a favor and stay clear of the factoring! There’s better, safer options.
  11. TallJoe

    TallJoe Road Train Member

    Apr 12, 2016
    Pissing away 5-10 G per year is no way worth the convenience of not waiting a few weeks. Most invoicing is done electronically. I mean 99.99% and most of the payments can be done by ACH too.
    I can understand factoring as a financial aid kit for solo o/o but not as a permanent practice.
    For a small fleet it makes much more sense to have it as the cas flow is much more demanding but a solo should avoid it.
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