Factoring Company

Discussion in 'Ask An Owner Operator' started by albloomfield, Jul 8, 2022.

  1. albloomfield

    albloomfield Bobtail Member

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    Oct 12, 2018
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    Just asking is this normal.

    My insurance company has been a mess, the lady I normally dealt with left the company, the new person they gave me went on vacation as my renewal was supposed to take over. So, I've has to deal with someone that doesn't know what they're doing to get my insurance renewed.

    We'll it got renewed, made my downpayment of $8,000 for a year of insurance on 2 trucks.

    I do paperwork on loads completed, some of them were ran before the last years insurance expired. Anyway, I'm paying a factoring company to get paid next day, I needed the money from those loads in my account to pay for fuel and other things.

    I look in my business account today and the factoring company never paid me, reason, they didn't have my new certificate of insurance.

    I've been with this company before, first 2 years I never gave them a COI, I only gave them a COI when I started using them to also broker freight.

    I'm pretty upset about not getting this money in my account. These fuel Bill's are high and I'm paying for their services to get paid next day. In the past they've denied claims saying paperwork was unreadable, when it was perfectly readable.

    Is it normal for a factoring company to deny payment because they don't have a COI? I didn't broker these loads through them, I brokered them through another company (which of course asked for a COI before getting the load )

    Is this normal? I've been doing business with these people for 4 years, got a fuel card, broker loads, and use them for factoring. They just decide they're not paying, no heads up, don't call. I feel like they're not looking out for me one bit.
     
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  3. xsetra

    xsetra Road Train Member

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    Get used to that feeling. Your best move is to get away from factoring.
    Good luck.
     
  4. RedForeman

    RedForeman Momentum Conservationist

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    Read your contract, it's probably in there, regardless of how they've enforced it in the past. That doesn't matter today. Them continuing to advance your invoices without evidence of insurance leaves them wide open for claims, so freezing your account isn't a surprising outcome. I agree they probably should have notified you, and may have and it got buried in all the other emails you get a month before an insurance policy ends. If you're depending on that next day deposit for any reason, it's on you to stay on top of it and get it resolved.
     
    Siinman Thanks this.
  5. Deadwood

    Deadwood Medium Load Member

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    There is the instinctive way to react to this situation which is “I’ve been screwed by the factoring company” and then there is rational way: “I’ve screwed myself by factoring”

    The first way *feels* good because you can be angry and self righteous but accomplishes nothing.

    The second way *feels* bad because you must take inventory of how *you* screwed your self and take responsibility for it but your long term prospects improve quite a bit.

    Good luck
     
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  6. ProfessionalNoticer

    ProfessionalNoticer Road Train Member

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    One more example of why factoring sucks. Why allow a silent "partner" control of your operation?
     
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  7. RunningAces

    RunningAces Heavy Load Member

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    Yeah I'm not a fan either. The majority of brokers out there have quick pay options at the same rates or less than you can factor for if your desperate for some quick cash on hand. I haven't heard one person say they got out from underneath their factoring contract without a massive headache either.
     
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  8. RedForeman

    RedForeman Momentum Conservationist

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    You have now, yours truly. One in a row.
     
  9. Cheepjeep8

    Cheepjeep8 Bobtail Member

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    You should try a good factoring company. I love EDITED before anybody says all factoring companies are bad, or i can't manage my business, or i'm broke, or i'm lazy or irresponsible, i'll just let you know that i'm none of those things. I factor for convenience, i own 2 trucks and trailers, i haul mostly local, and i stay busy with the actual labor side of my business and don't have time for a crap ton of office work, as i do it all myself, i sure don't have time to chase payments 30 days after i've moved on from a load. For 3% i can send it to them and forget about it, literally, i can factor every load or none, my rep will gladly give me a notice of release if i don't want to factor a particular customer or broker, they are truly non recourse (i also don't do business with deadbeats, so no worry about recourse anyway), and i get paid the next day. Factoring fees are tax deductible, and i get a seriously beneficial service for my money. If i were to hire someone to do the office work that they do on the billing side of things it would cost me way more for a persons salary than 3% of a load. Point is not all factoring companies are predatory, the same way not all brokers are garbage, or all carriers are bad, choose who you do business with wisely, and your money can be well spent. I'm sure some will give me crap for even posting this.
     
    Last edited by a moderator: Jul 22, 2022
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  10. Chuck579

    Chuck579 Light Load Member

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    News a week or so ago told of a factoring company in Texas that closed its doors leaving 150 trucking companies with no money and no one to answer their phone.
    The trucking companies can’t even pay their drivers the report said.
    I’ve NEVER been one to trust someone with that kind of control over my company.
     
  11. Deadwood

    Deadwood Medium Load Member

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    Reason #1,205 not to factor - You’re trusting the finances of your company and your livelihood to someone you’ve never met in a notoriously shady industry. The factoring company owner could be a coke head or a thief or be employing a relative who is.
     
    Catmando and Chuck579 Thank this.
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