Factoring math...let's not make it convoluted.

Not you.

 

It is as cheap or as expensive as 2% - 3 % of every factored invoice.
There is no argument to that other than whether it is an understatement or overstatement.

 

Okay, the only thing I was saying is that @TallJoe can now afford 2 ham sandwiches instead of just 1.

 

I gotto tell you... I really like this little thread of mine.
Philosophical and staff.

 

I would say that KR was overstating his case against factoring, especially since it appears he didn't provide an adequate refutation of the practice, at least in your mind. But I get his drift. In the end, whether someone pays a fee to get their money in a couple of days, instead of paying no fee and waiting 30-45 days is none of my business.

Factor on...

 

It's like any other practice in this industry. This forum is FILLED with hundreds of threads where people are arguing for or against hauling freight on the cheap, leasing, old iron vs new, elogs, flat vs box, etc, etc.

In the end, one thing is for certain though, no one, and I mean no one, should ever consider buying or driving a white Volvo!

 

I am from the part of the Old World where people traditionally hate usury...and all its derivatives and have little regard for those who mastered and perpetrated it for their own gains.

I have not factored anything yet.
However, I can't see why I should not have it as a tool in a tool box. As long as it does not weigh too much.

 

That is NOT a true depiction of the reality of factoring though.
What you paid tax on is the number you deduct 2% of the total invoice from. What % is that, then;
That's the number that matters and that is what you arn't seeing.
If your ''profit'' on an invoice after ALL deductions is 100 and your factor cost is 100= net 0 or 100%.

 

Forgive me but I am not sure what you mean.
As far as I know, I don't pay taxes on gross revenue (that is all invoices added up) but what is left after all expenses. Factoring is another expense, just like fuel and tollways, repairs, or interests on loans.

 

Well look at it this way, a quick Google search reveals that the average interest rate charged by banks for short term loans (loans a year or less) is 4-13% apr. Even taking the high end (13%), that is 1.08% per month. So by factoring loads, you are paying at least double what traditional banks charge.