good Non-recourse factoring

Discussion in 'Ask An Owner Operator' started by HopeOverMope, Dec 27, 2017.

  1. Scooter Jones

    Scooter Jones Road Train Member

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    No gripe. You might want to rethink the 4% fee thing. a 4% charge is a 48% APR ;-)

    Other than that, carry on fine sir :)
     
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  2. Justrucking2

    Justrucking2 Road Train Member

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    How does 4% = 48%? I want to see that math. And I was one of a few that did not have to file bankruptcy when our lines of credit were cut off and other nasty things happened. I had two trucks and three trailers back then when I turned the lights off an headed back to the oil field. I paid my debt, wound up divorced later on, paid my dues. Just interested in the math. ;-)
     
  3. Scooter Jones

    Scooter Jones Road Train Member

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    Okay, son. Here it is. Let's say you factor a $2,000 load at 4%. You are paying $80 in factoring interest. Multiply $80 x 12 mos. That gives you a simple annual interest rate of 48%. Interest.JPG
     
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  4. whoopNride

    whoopNride Road Train Member

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    It's pretty simple. 4% for a 30 day loan is 48% apr over a year. 12 x 4 = 48.

    If you factor 15k for 30 days it cost $600. You borrow the same 15k every month for 12 months it cost you $7200 in a year. 48% apr.

    You can get a 15k dollar line of credit from the bank for 7%. If you keep it maxed out every month it only cost you $1050 per year. 15,000 x 7% = $1050.

    Math lesson over!!
     
  5. Justrucking2

    Justrucking2 Road Train Member

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    Well, your math is fine over the long term, this all came down over a matter of months on my end, and folks back then were not in to big of a rush to pay... And that is about it, I had to factor prior to selling everything off to preempt a larger disaster.

    It is what it is, and it is what I had to do. Rates collapsed, and I saw no other recourse, I sold out and headed to the Oil Patch and really had to work. My buddies, they filed bankruptcy. Two are now dead, and one is a company driver, but he cannot afford to buy another truck. Me, I have a truck, busted my ### in the oil fields of ND and as of now am doing OK. What tomorrow brings is another story.

    There is a property up for lease down the street, and I have a few ideas, well one, and have the coin CASH to maybe accomplish it. ;-)
     
  6. Scooter Jones

    Scooter Jones Road Train Member

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    I used an example on another thread the other day. My insurance was up for renewal on the 22nd. My underwriter offers a 15% discount if I pay the annual premium upfront. It was like a $1400 savings for me. I had several invoices about to pay. Instead of stressing over it, I paid the full $7,458 amount out my personal low interest credit union LOC. A few days later when the cash flow built back up I paid the LOC off in full.

    It cost me $16.52 in short term interest...

    Compare that to factoring at 4%. $7,458 @ 4% is $298.32. I saved $281.80 comparatively speaking.

    Look, I know that cash flow can be a real issue for any business, large or small. Been there done that. However, a lot of money is being collected by these factoring hawks. The goal should be to get to the place where not one nickel is spent on the "generosity" of these companies.
     
  7. Justrucking2

    Justrucking2 Road Train Member

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    Scooter, I know what you are saying, and totally agree. I pay everything off as it comes in to, and I have no LOC, that was wiped out, I am strictly cash. Funny too, I guess I am lying about not having a CC... I went up to Home Depot today, wanted a space heater for the garage, and an old friend was selling $50 discounts if I signed up for a CC... I did it, I signed up, got my credit card, and now have $38 debt! Now I am sweating! LOL! Beats the hell out of the $200,000 line of credit and two 6 figure mortgages I have paid off in the past 15 years... Just saying, not my first rodeo. ;-)
     
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  8. HopeOverMope

    HopeOverMope Medium Load Member

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    So that's leads me to my next question if you don't mind;

    If I decided to bill direct without a factoring company, what are some good ways I can check credit so I can help make smart choices to whom I should extend credit?-

    I'm familiar with Truckstop.com and using their credit rating/ days to pay and etc... the fleet I'm with now uses RTS financial, and I book my own truck most of the time , most of the brokerages I choose, RTS approves...

    So I was going to ask OOIDA if they have some type of provider that we can run credit checks with and read reports on brokerages... that would help me gauge better whom to do business with [brokers & direct customers]
     
    Last edited: Dec 30, 2017
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  9. stayinback

    stayinback Road Train Member

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    First off-Are you leased to someone? If so,None of this matters unless you have future plans in mind.

    If you can't afford RTS credit- (I think like $110 per month includes D&B Market sharing and criminal activity with every aspect of transportation.

    For Free,Just do your homework-Real Easy- Use your senses God Gave you- If you Smell a Rat- Its a Rat, Simple as that

    If you run for brokers exclusively,,,Even Easier, to Check For Free everything about them via Safer or DAT services

    Like I say...If you "Feel" it from the start like its gonna be a puzzle......Leave it be.
     
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  10. xsetra

    xsetra Road Train Member

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    Baxter Bailey is a trucking collection agency. They also have a rating for brokers and shippers.
     
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