factoring proposal explanation

A proposal, not a contract.

 

It's a proposal, they're not obligated to pay you ####, until it's approved by them, and if they do factor your invoices, they have the right to lien/take legal action to recover funds they have paid you for.
Basically if they pay you on an account receivable and they don't get paid, they can go after whoever to recoup their losses.

 

They are saying that they don't have to pay you until you provide them all requested information, and once they receive that information, it has to be reviewed and approved before they'll pay you. If they don't receive payment for the accounts they've paid you for, they can and will take whatever legal needs necessary to recoup their losses. It's worded so that if they habe to take legal action, they will receive any and all money's awarded from the court proceedings...
Are you prepared to give up 4%+ of your money? On $200,000 that's $8,000. Idk about you, but that 8k could buy a little bit of fuel, replace a set of tires, make your equipment that much closer to being yours, etc...
Just food for thought, hope this helps.

 

But think about it this way, if I have 150 loads this year from 8 brokers and 3 direct customers and the one broker who sent you five really good loads does not pay, how much time would you be willing to pay to collect?

I would rather keep my cash flow up as much as I can and not get involved in collections, my time and legal time is worth more than that $8k.

 

I see your point. I just get sick of everyone wanting their cut. My step stretch has been parked since april, mainly due to the downturn of the oilfield, but the ones that are still have work are paying to get it. Like if you use me to move your ####, I'll buy you a side by side, or a rifle, or I'll kick a fuel tank off at your house and keep it full. I guess you're probably right, keep the flow, let someone else deal with the headache.

 

Just bill the customer and wait on your money. Don't let the factoring hounds get their claws into you. Please, for the love of God don't do it.

Remember, if you grow slow, you grow strong.