Leaving the factoring company.

Discussion in 'Ask An Owner Operator' started by 6wheeler, Aug 12, 2019.

  1. 6wheeler

    6wheeler Road Train Member

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    I'm going to be leaving my factoring company and I was wondering what other OO have experienced from it.

    I did this once before and had a problem not being able to use a lot of broker's because of re-setting the clock on anything that was delivered.

    Thanks
     
  2. Midwest Trucker

    Midwest Trucker Road Train Member

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    Maybe look at getting a line of credit from your bank and tell the factor to go kiss a duck.
     
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  3. starmac

    starmac Road Train Member

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    I would think that would be ur to the contract you signed with the factoring co.
     
  4. wichris

    wichris Road Train Member

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    Good reason not to factor. Read your contract. They have a UCC filing, some won't release that until they have all their money. Never understood why anyone would borrow the same money over and over again.
     
  5. mp4694330

    mp4694330 Road Train Member

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  6. RedForeman

    RedForeman Momentum Conservationist

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    If you're leaving on good terms, just ask your account manager for help, and may even offer better terms in an attempt to keep you. They'll usually step you through it without any hassle. You being in good standing they won't want to burn a bridge in case you change your mind.

    In my case, I was able to get a separate release on any zero balance accounts. The few that had outstanding invoices, I still had to invoice new loads through the factor like before, but just not get an advance - choosing to wait on the payment instead. The factor would collect the payment, then turn around and ach 100% to me the next day. Eventually the earlier invoices that had been advanced would clear. Once the balance hit zero, they'd release the assignment. Busy accounts might have a month worth of payments still due, so those would continue coming via the factoring company, while future invoices were paid directly once the assignment was released.

    Once all your accounts are at zero, follow the process to end your factoring agreement and ask for a blanket release. Just incase you come across a customer you don't haul for often and they weren't specifically released as you closed things out.

    Also: Read your termination and default clauses in your contract carefully. There will usually be written notice requirements, possibly fees too. Be sure you're clear on everything before you start the ball rolling. If you've been a long term customer and in good standing, any of the more difficult timelines, terms, and fees can probably be waived or at least reduced if you just ask. Of course, do that in writing so everyone is clear. Also, when checks start coming directly to you, double check to make sure it's a released account. Messing up and depositing something that should have gone to the factor can throw your account into default status and make things miserable for you.

    After all that, you'll have to review each and every customer agreement to make sure direct payment and whatever terms you choose are updated. After about 30 days, look yourself up to make sure the factoring company released your UCC filing.

    Edit to add: Just expect this to be at least a month long, more likely 2-3 month process. It just takes time for those outstanding payments to trickle in as you're closing out the balances. Don't get in a hurry and it should go smoothly.
     
  7. 6wheeler

    6wheeler Road Train Member

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    Thanks for the information. Before I had eCapital and that was a total nightmare. They took months before giving me a release. Now I have Financial Carrier Services and I'm afraid that they too will be difficult.

    So you could get a separate release for each broker that doesn't have a balance? That makes sense to me but I'm thinking the factoring company will want to hold hostage the account by not letting go any release letters
     
  8. Midwest Trucker

    Midwest Trucker Road Train Member

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    WOW. I learned a lot there, thanks. I had no idea what a nightmare trying to stop or change factoring would be. I bet there are a ton of companies out there that don’t even need it anymore but feel like they can’t stop.

    These factoring companies really have you by the balls sounds like.
     
  9. RedForeman

    RedForeman Momentum Conservationist

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    LOL. The company I quit was eCapital. Really no issues at all. Took about 2 months to get everything down to zero. I left the agreement in place nearly a year just to use their credit checks before I finally ended it completely. It helped that I was in good standing for years, and kept a positive working relationship with my account manager.

    eCapital, yes. You'll need to read your fine print on the other. I'm not familiar with them. The good companies usually do allow individual account releases. Some won't allow it. Others will charge a fee for each one. Unfortunately it's one of the things you have to ask when signing up so it doesn't come back and bite you when it's time for a divorce.
     
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  10. starmac

    starmac Road Train Member

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    You would not belive some of the contracts I read, back when I THOUGHT I wanted to use a factoring company. I decided to just tough it out a month or so and get the revenue coming in on a rolling basis, and not pay someone else to pay me. lol
     
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