So I might have truck soon and have options

Discussion in 'Ask An Owner Operator' started by peabody747, Aug 1, 2022.

  1. xsetra

    xsetra Road Train Member

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    I'm curious I know on here most seem to be against factoring companies and I'm wondering why that is?
    OP, because Factoring is expnsive.

    Start with your current company, get your footing and knowledge how to run your new company. Then when you have your nest egg and knowledge, venture out under your own authority.
    Long term the goal is to keep your expenses as low as possible. This includes keeping as much of your load pay as possible.
    Good luck.
     
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  3. exhausted379

    exhausted379 Road Train Member

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    I don't factor, and really don't care if someone does or doesn't. But to answer your question, I don't figure it like that. For example, if someone factors a $100,000 a year, and pays 3% to factor, they have paid $3,000 to factor and put $97,000 in their pocket. At 36% APR they would have paid $36,000 to factor.
     
  4. Trucker K

    Trucker K Light Load Member

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    After I read this Carriers unable to pay drivers, buy fuel after CoreFund Capital closes I definitely reconsidered how I was going to run my company after starting it a few months ago as I wait for my truck. Capital ('Money in the Bank') is the key when starting any business. It's understandable that some might have $10k to $40k after buying their truck however I always believe in having even more residual cash on hand as a super reserve because anything can happen. Even though I was adamant about running my own Authority and not to lease on with another carrier I had to reevaluated things over with my wife. Factoring Companies can be good but only on a minimum. I believe on borrowing from yourself 1st before going down the factoring avenue if you can. If you have to Factor obtain it (read the contract thoroughly) for non-recourse and for a lower percentage such as 3% for monthly agreement or 3 month agreement at most. Having $50k capital for the 1st 3 months in operation is a necessity in these times because things aren't looking good during this storm!
     
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  5. Oxbow

    Oxbow Road Train Member

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    Well that certainly puts it in a different light.

    It tends to look less bad when you put it that way.
     
  6. bad-luck

    bad-luck Road Train Member

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    Smart owner operators are against factoring because you are paying someone a percentage to get paid early. Factoring over the course of a year becomes very expensive, and is taking your hard earned money out your pocket.
    You need to have capital in the bank to cover fuel, maintenance, break downs and of course reserve to pay yourself when you truck is down.
    If you absolutely have to have your money sooner, most companies offer quick pay and take 1.5% to 2%. 3% is too high.
     
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  7. Midwest Trucker

    Midwest Trucker Road Train Member

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    If you gross 300k and at least $9000 going to factoring. How much would say 60 days of balance on a line of credit cost in comparison?Once money comes in you should be fine and pay it off. These factoring companies sink their teeth into your business and it’s hard to get released away from them. People end up shrugging their shoulders and keep paying the man because it’s too much of a pain.

    Thats not counting fees and such as well.
     
  8. Kshaw0960

    Kshaw0960 Heavy Load Member

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    We use factoring because of the time. It’s very easy to upload to the app and it’s done. Otherwise we spend so much time uploading bills, making sure they are paid, etc. and every single broker has their own different way to upload PODs which gets exhausting.
     
  9. Judge

    Judge Road Train Member

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    Siinman Thanks this.
  10. Kenworth6969

    Kenworth6969 Road Train Member

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    We are already there.

    Screenshot_20220731-145040_Chrome.jpg
     
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  11. peabody747

    peabody747 Light Load Member

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    so this biggest issue is losing money, but ok current company will lease me on at 85 percent that with trailer use etc. Factoring companies you get anywhere from 92 to 97 percent. Either one won't be needed for long term because yes we have funds beyond buying the truck available. Regardless cause not sure about the difficulties to finding a trailer I'm gonna put it on here and run for a little bit. I'm not new to this and I know what it takes run a truck. Just factoring stuff is new to me
     
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