Whats a good factoring company?

It does exist, but better to equate that "non recourse" term to "broker bankruptcy protection." That's all it will do for you. Unfortunately, the bad factoring operators will let you believe it will protect you for any reason, when it will never protect you against a claim.

Which is a good segway to add to Bill's post. My factoring company tracks shippers and brokers that have higher than normal claim records. Even if they pay their invoices quickly, a broker that is claim happy can be worse than one that just doesn't pay. They drag the days to pay out, while making you look like the bad guy. I've had a few where that's been the only reason for a full recourse only approval or a decline. That's something you won't get via any commercial credit service I'm aware of.

 

TFS, they have minimums and not geared towards the single truck operation but if you have a couple trucks and looking to grow they are a great source. They have a tie to an equipment company and you can lease tractors and trailers and they will make the payment from your rebate. And the equipment is priced right not huge retail mark-up or some predatory, you can't get credit so I'll abuse you, pricing.

 

What is the name of the company you are using? I agree with you, it is better to use a company with more knowledge.

 

I mentioned that in an earlier post. eCapital, formerly known as Freight Capital.

 

I had experience with 2 factoring companies and I called another 10 and it looks like, I will sign up with D&S. They actually own the "internet Truck Stop". No minimums, no long term contract - 30 days, not required to send every invoice to them (so I can use the Quick pay of TQL, CHRob, landstar and etc.)non recourse 5% rate + $1 for ACH to your bank. They will fund on scanned copy and if the broker needs the originals, they provide free TripPak envelopes. Plus 1 month free access to ITS.


BTW, when I called TFS, they said: "For a small fleet 1-2 trucks we recommend D&S"

 

I was with D & S for a number of years. When they decided to change their contract where they could charge back any receivables, I decided to sever our relationship. They still wanted me to pay the same rate for non recourse, but with the change in terms, it would have essentially be recourse factoring. I had a good relationship with D & S for several years. Whether you sign on with D & S or another factor, I would encourage you to read the contract very carefully. If you don't agree with the terms or understand anything in their contract, you should change the contract or walk away and find another factor. Don't sign any contract that has wording or terms that you don't agree. If it is in the contract and you sign on the dotted line, you are obligated to abide by the terms. You should understand that if the factor is given permission to go into your bank account and take out money, it is not non recourse factoring.

 

....D&S have the simplest agreement (only 1 page) the rest 9 I called were with 10 and more pages and not really non-recourse. What factoring are you using now?

 

I have not used a factor since I was with D & S. I didn't factor anything for probably a year or two prior to them sending the addendum to their contract. I kept the relationship in case I did need or want to use a factor. I don't really need a factor at this point. I have a small group of companies with whom I have been doing business for a number of years. They usually pay within a short time, so I really have not needed to factor any of my receivables for several years. If I were to look at factoring again, I would seek one whom I could factor only those receivables that I wanted. Some factors require monthly minimums, minimum fees or that you send them all of your receivables. There can also be cancellation fees if you decide to terminate your relationship. I didn't want to deal with a company that had such strict requirements. D & S was an easy company to do business. Had they not attempted to force me into signing the new agreement, I might have kept the relationship alive as a backup. Many brokers offer some sort of quick pay program for less than the cost of non recourse factoring. You might check with your brokers to see if they offer quick pay and the costs. You might find that you don't need to factor.

 

From all the companies I called, only D&S has no minimums, not require to send all invoices to them and no long term contract.
I am using Quick Pay for Land Star, C.H.Robinson and TQL, Internet Truck stop offers credit check for additional $35, if I don't sign with D&S, I will probably pay for credit check and this will give me idea how good is the broker.

 

The same people who own Internet Truck Stop also own D & S Factors. There is no real need for a factor to have a contract of more than a couple of paragraphs. Factoring is a simple process. When a company has such a long contract, I wonder what they are trying to hide in all that paperwork. Using a factor doesn't use up your personal credit. In fact, your personal or business credit doesn't even come into play. It is the broker or shipper's credit that is important. You might check with your bank to see if you can qualify for a line of credit. The cost will be much less than using a factor. Some banks also offer factoring, but most have minimums. I think the last time I checked with one lender it was $250,000/year. That might be difficult to do with a single truck, especially starting out.