Factoring - What's normal and is it worth it?

I mentioned non-recourse payment from the factoring company. What's the point of using a factoring company if you still have to track down the slow-pay or no-pay customers?

 

Most non-recourse only applies if the broker files bankruptcy.

 

Today's invoices are scanned that aternoon and deposited soon instead of twiddling your thumbs waiting for payment on terms of 30 day minimum.

Warning it is addicting and detox is a major mess.

I remember my 'money and banking' prof describing how you collect your money asap but pay your suppliers 30 net 10 -or- slower and work on the float.

 

Factoring is the biggest payday loan scam. Getting paid from brokers is not that difficult. Yes, issues will happen. Isn’t that the point of being an O/O to run a business? If you just like to drive, stay a company driver. The percentage may be low but added over 20 years and you can buy a mansion on a lake!if the factoring doesn’t get paid due to an unresolved legal issue they be wanting that money back, they have the legal right. Read the contracts if you do decide to factor. They benefit themselves.

There are good brokers out there that pay a little before the 30 day mark and take new guys. You can hit them more often while you build a nest egg to avoid the payday loan.

y’all are making me think about offering dispatch and factoring service just to make some quick bucks off O/O!

 

That's not what he asked.....

 

Factoring is a viable option anyone crying about "well you should save up money so you don't have to" is just trying to gatekeep..

You could ask, well gee why don't run your own gas station so you don't have to pay the extra money for fuel? Why pay the gas station extra money when you have your own. That's the logic they are using.

The simple fact is a factoring company can serve viable service for solo ower ops. That being, you don't have to screw around will billing, you don't have to waste time trying to collect or keep track of accounts receivable. You pay them 3% and a whole butt load of work is done for you.

Added to this the factoring companies, will have a way to rate the broker's credit which you as a solo owner would have to pay another service to do that. This way it's less likely you do a load or a shady broker because they will already be blacklisted by the factoring company.

With that said, some factoring companies are shady and will screw you over. RTS screwed me over and wouldn't release my company so I could get another factoring company.. Despite all the youtube hero's claiming they are great I wouldn't use them again after what they did with me. The fuel card is ok but it's separate from the factoring side..

I'm kinda curious about Loves factoring because one of my brokers claim they'll factor car loads.

 

Do you also own your own fuel stops? Think of all that extra money you are throwing away to the truck stops by not running your own.... All the money you throw away buying fuel from random truck stops you'd be a millionaire in 20 years..

That's the logic you're using..

Same with do you hire an accountant or do you do it yourself? It's silly to use that excuse for claiming factoring is bad, that paying out a small percentage for a service you might want or need is bad.. The same argument could be made about pretty much anything.. Insurance? Why don't you self insure? I mean really..

From buying trucks to buying tires or fuel or anything. You always hire someone at some point to do something for your business.


Hell not to mention another viable reason to use factoring as a solo O.O. is not being home to wait for the checks in the mail... When you're on the road if you have no one to check your mail, you have no idea if anyone paid you or not until you get home. Then you have to find out who didn't pay then leave again and have no idea if they didn't pay you again..

I gladly pay 3% to have my money today vs having to deal with all the hassles of chasing brokers who don't pay when they say they do and me not knowing they didn't pay until 2 weeks later when I get home.. Not to mention having checks sitting in a mailbox or PO box..

I mean sure if you work with 1 or 2 dependable brokers then no you probably don't need factoring but if you are running spot market and running everything your self it's 100% viable option.

 

Good arguments. I will contact you first when I get into the factoring and dispatch biz.

 

Dude some OO's use different services than others.. I just get tired of the gatekeeping that always happens on this forum over factoring. No one can ever ask about factoring without the same argument being thrown at them by 5 people who apparently do everything themselves without ever hiring anyone for anything..

Personally, I'd never use a dispatch service for various reasons, but I'm not gonna try to gatekeep other people who might want to use one. Just like you might not ever feel it a need to use a factoring company but others might feel it's a viable option..

Claiming the high and mighty "oh you should just be rich enough" that you don't have to use it is silly.. It's just a trash argument..

 

@crocky
I can see your point