What's the pitfalls of factoring

I've not signed up with a factoring company, so I'll take a shot in the dark and say you can sign up with as many as you wish... just like signing up with as many brokers as you wish.
I'll stand corrected if wrong

 

i hope that's the case.. i spend alot of time on the getloaded website looking at possible loads i could pull in my state. but alot of them are from different brokers.. i'm happy i have a whole year to plan all of this out and prepare.

 

You can only use one factoring company at a time. If you decide to quit one and go to another, either all your invoices must be paid or the new company will need to buy them from the old company

 

Well there you go.... I stand corrected

 

Is this true with all of them???? I was quite certain that I have run across some online in my recent searches that did not operate this way. I do know that some require you to sign on exclusively with them for a certain period of time and you are not supposed to use any others but I didnt think this was true in all cases. And besides that, how would any of these companies know what you are doing with your other bills anyway. They are not going to know about every load you run and what you do every minute of the day and dont really have any way of knowing what other companies have paid you. I would like to know a little more on this subject because that sounds a little confusing,like i said before i didnt think this was the case unless you signed some sort of a contract with a certain factoring company. Anyone care to elaborate on this subject?

 

I'm not sure what non-recourse means.

We're through TCI Business. I think they have a branch in Chicago and Minnesota. We send our invoices to Minnesota but I have a Chicago address in my record books... weird.

If the factoring company does not get paid for the load over so many days, they start taking money from our reserve (which is a small amount from each load they take and put aside just in case something like this happens). After so much is built up in the reserve and nothing like this happens, then they forward us the money.

I'm not an expert on everything they do with our company because I've barely had to deal with them, but all this information is from what I have picked up when I had to factor for a few weeks until we got somebody new in the office.

 

non recourse means that if the factoring company didn't receive funds for the invoice they'd just take the hit on it, and would do all of the work of getting the money, but since they take funds from a "reserve" account of yours, we can only assume that they are not a "non recourse" factoring company..

on another topic i think it's garbage that i could only have one factoring company.. now i can only hope that the invoices i receive will all be accepted by the same factoring company..

 

Yeah...doesn't make much sense to me either. Why can't you use more than one factoring company?

 

I think it all comes down to economics!

I dont know how they would know whether or not you are using another factoring company...unless there is some kind of reporting service??? Someone needs to ask, I would but I dont want to make D & S curious!!!

Oh yea, D & S will not usually factor companies that have a "days to pay" rating over 45 days. between 30-45 you have to call and get approval (I have not been denied yet), if it is under 30 days, usuallly their webiste will give it a "green" which means you do not have to call and get approval.

 

what are the chances of a broker dealing mostly in one state?