Freight capital not paying...

I just started using FC a few weeks ago. Concerning windsmith's post. You do get to use their website 24/7 to credit check brokers for every load. Some do come back as "non-recourse only", I also had one come back no approval. still waiting to see how that pans out !

I cannot speak as eloquently as RedForeman, but I would say at this point the "non-recourse" has 0 value for me. They only provide "non-recourse" on loads they can nearly guarantee will be paid.

pro's to the service is it is convenient to get my money on one card I can manage online 24/7 and take cash advances from.

con's they don't seem to truly understand the owner-operator concept. I set this up while I was at home working on my truck and trailer, and told I was "all set up" and "ready to go". Once I was on the road and attempting to use the service I had to fill out some additional paperwork with the fuel card department, fill out some additional paperwork with the billing department, fill out some additional paperwork with the recieving department. I had a guy call me last week with "changes" to the fuel card I needed to fill out some more paperwork. Well, I'm glad I'm here to serve you freight capital ! lol. They are nice people, but they really assume someone is in an office at all times ready to fax or email documents. I just make them wait, whatever, they work for me, I don't work for them.

Factoring IMO, basically sucks, but I stuck a bunch of money into my truck and trailer and was running slim on available capital. And there is a big advantage to getting that money right away, not sure it's worth 5% plus all the fees, but worth something. I look forward to firing them sometime in the next year.

 

[FONT=Calibri, Verdana, Helvetica, Arial]Hi Danny- This is John, president of Freight Capital. We are very sorry that you had a bad experience with our company. Our customer's satisfaction is our number 1 priority, and my team strives every day to make sure you're happy with our services. Please call me directly at 760-496-0786 so I can make things right![/FONT]

 

Danny - I think I warned you there would be some startup learning/work. Once you get through the first couple of transactions, it's easy.

On the non-recourse approvals, it's not necessarily a problem. First try to check them independently. I use the credit scores on DAT to see time in business and payment history. There are other sources too. Last but not least, call Freight Capital and ask why. Often it may only be lack of experience with a particular broker. Or there may have been some issue in the past. They may not give you specifics, but they'll give you enough to decide whether you want to do business with the broker or not.

That said, I've run several loads on non-recourse, of course supporting the decision with my own due diligence. There's also been a few where the FC credit check served as a warning to look deeper only to find them too sketchy for my taste and turn the offer down. Of all of those, only two have gone out of business or hit the Baxter Bailey list - and long after I had hauled their one-off load, which at the time, they check out ok using other information.

Here's another example: I had one that approved non-recourse, leading me to call. My other credit check turned up solid looking. FC advised they had numerous frivolous claims, something you would ordinarily find out the hard way.

 

Oh, I'm not disappointed. This is pretty much what I expected it would be like. A little frustrating that "all was setup, ready to go". When apparently, nothing was setup ready to go. But, like I said, it is clear to me they anticipate someone on my end being in the office to fill out forms for them every day.

there are some other pro's to FC. no minimum's is great. So far they have been quite upfront with all the various fees. They work late and Saturdays and their people are friendly and capable.

The only real problem is it's factoring. lol, my profit margin on any given load may be only 20%, give up 1/4 of my profit to factor, then tack on $16 to fedex the paperwork, $15 handling, and $9 or $15 to put it on my card or in my bank. Hey, it is what it is. I can reduce those costs a little by waiting til I have 4 or 5 bills to send, but if I wait a week to send a bill it starts to diminish the factoring value.

Look, if you WANT to factor, or you HAVE to factor. FC is probably as good as any, sorry if I implied otherwise.

 

Are they still in the '90's making you send in all your paperwork or can you scan and send it?

We jumped back into factoring a couple months ago when I hired a business development guy and knew that we could easily broker $100k a week and I don't have that kind of capital to pay carriers in 3-5 days. So we are working with Corporate Billing out of AL. They are not going to work with a single truck operation but if you can do $5k a week with them you will see the difference between how these companies, FC included, really take advantage of the O/O. It really is embarrassing what an independent will put up with because it is the best available.

We have actually started putting stuff we don't have to through Corp Billing because they do collections and even lock box for stuff we didn't factor. I can't hire someone to do what they do at the price they do it.

 

I'll let them speak for themselves, but the answer to this is yes and no. I have more to add below..

Your business needs (and leverage due to size and establishment) are likely outside the market Freight Capital serves. I know you had a bad experience with them and appreciate your lack of axe grinding LOL. Maybe it's a stretch on my part, but I really feel the negative experience you had really stemmed from that mismatch.

Not specific to Freight Capital, it really comes down to how the factoring company mitigates risk. As you know, paper bills are golden. So one way to reduce their risk is requiring paper bills. There are some others that I spoke to that will accept electronic transmittals from day 1, but always there was a catch. Either additional fees, minimums, even less desirable terms and conditions, and so forth.

In my case at Freight Capital, my established, positive track record has been rewarded with a somewhat more favorable arrangement. I won't post specifics on a public forum, however. I think that's representative of any business relationship in any industry. Over time, both parties are going to be more willing to accommodate special requirements once they have a clearer picture of what they get out of those accommodations. Reflecting on this, I look at the brokers I do the most business with. Those are the guys that work with me versus grinding the rate on every single load. Those are the guys that go to bat for me on reasonable detention and accessorial charges, also taking my side when the occasional BS claim comes along. When my business relations meet me halfway, I reward them with my business. That has also been my experience with Freight Capital.

I did have a very candid discussion about this topic with my FC account manager. Here's the thing. After two plus years, I'm no longer just a random guy calling in asking to borrow a bunch of money against my receivables. They now have a history of my business to look at. Proof exists of what sort of revenue stream I'm running through them, they see that I rarely have claims and am very diligent about handling them, and I get actively involved in collections even before they have taken any action. In addition, there have been no faults on my obligation to them, for example factoring an invoice then collecting directly or receiving and depositing a payment sent directly to me in error.

I think anywhere you go, an established business relationship gets you more. In your case, you bring a different opportunity to the factoring marketplace, and Corporate Billing may be a better fit for you. After a while, I am sure they will also offer you more favorable terms or services that make it work even better.

 

has anyone put this on their invoice?

 

Have you or any of your customers ever actually paid on terms that someone wrote that the bottom of an invoice? Just about every carrier agreement I have includes stated payment terms. You either accept them when you sign it, get them to agree to an addendum, or just not do business with them.

Sort of a tail wagging the dog problem. Unless you're a really big dog, wag away.

 

Not in trucking, but yes, I have had signed agreements with customers in the past. And yes, they were starting to push envelopes out to 55-60 days.

I DID put those terms on their invoice and suddenly, I had a check the next day (3-days).

I am curious if anyone has done this in trucking. It's pretty much stating YOUR terms on what you want to pay. If you have to, send it in with your carrier packet. I don't care. It's business. Have you attempted it?

 

FWIW I do have terms at the bottom of my invoice, but now only state due upon receipt and a 2%/mo interest on overdue balances. The only time that would ever have any merit would be in collections or small claims court.

For about the first year I offered a 2% discount on 7 days in that same footer. There were no takers. I eventually decided it wasn't worth bothering with and deleted that.

My experience has been that the majority of my customers do not find that discount worth the effort/cost to circumvent their usual payables cycle. There are a few smaller customers that I have developed closer business relationships with that have offered to cut an express code on the spot if I came in with an exceptional need to get paid fast. However, I have never taken advantage of that offer in favor of keeping my business my business.