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

Not you.

 

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

 

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!

 

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%.

 

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.