Nord-Deck Transport
- Thread starter youngtea
- Start date
jonny-chicken
Site Supporter
20
Yes... They are on my DNU list because they use a factoring company...
Other than them using a factory company you never had any issues with them. I have no issues paying factoring companies.
jonny-chicken
Site Supporter
20
Yes sir... no issues that I'm aware of...
htcollections
Suspended Member
10
Why not deal with them as they use a factoring company?
jonny-chicken
Site Supporter
20
Let's see... where should I start...
Just my opinion and my experiences here but...
- Companies that factor are often in financial trouble and this is their last step before bankruptcy... This is not always the case, but in my experience it is often the case...
- Factoring companies hound for payment status more than carriers who don't factor... even when the brokering party pays according to a schedule...
- Factoring companies report on your credit... and do so inaccurately... In my experience, they get the invoice from the carrier, put their stamp on it, and then mail it to the broker... The broker gets the invoice about 2 or 3 weeks after delivery, by which time the factoring company has already reported that you are late paying them... Sometimes it's worse, I had a really bad experience with Riveria Finance in a matter like this... They lied about reporting to equifax and had to eat crow when I proved it was them, and when I proved their report to be grossly inaccurate...
Generally speaking, they just 'thicken up' the whole process of invoicing and paying...
They are a hassle that I choose not to deal with...
Rant over!.... thank you for listening... haahahaaa...
jonny-chicken
Site Supporter
20
Oh, and I forgot... Also, I feel that there are so many awesome carriers who are doing a great job and don't factor... so I just work with them...
htcollections
Suspended Member
10
Well those are decent reasons. Not all the factoring companies are like that. As for Riviera Factors, i have not had that type of experience with them. Most of the factoring companies we deal with are ok, at least with us!
A lot of these carriers di need the cash right away due to financial constraints.
A lot of these carriers di need the cash right away due to financial constraints.
lowmiler88
Site Supporter
30
JC I thought the same way for years then came to the realization because someone chooses to operate a business in a way that you don't agree with does not mean it is wrong. As far as individual Factoring companies I can see cutting them off, I'm not sure what our credit rating is on Link and don't really care, we've got 2000 carriers that will give us an excellent rating. Yes we may have carriers decide not to deal with us without calling but we have survived as we all know money talks if people pay their bills on time you will not have a problem finding good carriers.
jonny-chicken
Site Supporter
20
I agree, they are not all like that and I'm sure there are some great factoring companies, I just don't want to deal with them in my own business, but 'to each their own'...
Yes, it's the 'carriers that need cash right away due to financial constraints' that scare me the most...
If a company is selling it's receivables I'm guessing they have already exhausted other more conventional methods of funding a business like bank loans, lines of credit, etc... Why else would someone borrow at such high rates? If they need money this bad, is their equipment well maintained?
Forgive me and correct me if my math is crude or even incorrect, but... If someone is paying 5% for factoring invoices and they are getting their money, lets say 2 months earlier than normal, that means they are borrowing for 2.5% per month, which of course is a whopping 15% annual rate of interest...
Again, just my opinion...
I guess if we want to continue this conversation any further we should probably move away from this thread about Nor-Deck... haahahaa...
loaders
Site Supporter
30
JC, the problem of "stale dating" invoices is not confined to just factoring companies. There are still some carriers who will date their invoices with the pick up date, after waiting for the driver to hand in his paperwork, and then throw the invoice into Canada Post. Needless to say, by the time the envelope gets ripped open, the invoice is at least 10-14 days old, or worse. On the bright side however, with most people e-mailing invoices, this problem is becoming less common. Like most people, I can't pay an invoice until I have that invoice, and the clock starts ticking once I have it in my hands.
jonny-chicken
Site Supporter
20
I agree sir... and thankfully, we email 99% of our invoices... the other approximately 1% are mailed because the recipient prefers it that way. For us, that usually occurs within 2 or 3 days of delivery.
To deal with the slow asses, when paying other carrier's invoices we schedule the payment according to when the invoice was received in our office, not whatever crazy date they printed on it.
Thank you for your help.
htcollections
Suspended Member
10
Interest for factoring companies is much higher than !5 percent per annum........But the problem is banks don't usually lend so easily. So some companies need to factor or they can't even get started in business. As long as the factoring company isn't overly aggressive, it can work for everyone, while its true that you are giving up a 5 percent discount or so, on every sale
Well ... the same could be said for carriers asking for quick-pay all of the time. Personally, if I was a small carrier that needed to enhance cash flow I'd partner up with just a few brokers who could give me favorable payment terms -- like a low discount quick pay ... sometimes you can get free quick pay if the service you offer to brokers that you have a collaborative relationship with is valuable enough to them.
htcollections
Suspended Member
10
I would agree. Quick pays are great for carriers when they need money as long as the discount is not too high. 5 Points is a big number in trucking since the margins are so low. I am not sure that all carriers ask for quick pay for the sole reason of needing the money immediately. Man carriers want to reduce their risk with others, so they request quick payments. You have to admit we see a lot of carriers/ brokers come and go.
JC, the rates are clearly higher than those of traditional financing, but should be in line with QuickPay. The key concept you're missing here is GROWTH enabled by factoring. If the costs are reasonable within the context of the enabled growth, why wouldn't it be a good strategy?
As for collection calls, if invoice terms are net 30 days and carrier confirmation doesn't indicate otherwise, we do not think it's reasonable to pay in, say 60 days (not saying you take this long to pay - just using an example). Would you find this reasonable?
There is no excuse for reporting false info to Equifax. I know this belongs on another thread, but I strongly disagree with your comments and can't leave them alone.
jonny-chicken
Site Supporter
20
Hey KeyFactor,
Thought I would hear from you at some point on this thread...
I mean no ill-will towards anyone who factors or is in the business of factoring... If I needed to use such a service or was involved in that business I would most definitely be singing the praises of Factoring and defending it just as you are. I respect that...
My view towards factoring has evolved over years and has been shaped by the individual experiences I've had... It's just not a good fit for our business and I prefer to avoid it wherever possible...
For some others, I'm sure factoring works great... It's just not for me...
Freight Broker
Well-Known Member
30
Factoring does provide a valuable service to carriers who might not otherwise be able to expand. My only beef with some factoring companies (from my perspective as a broker) is that they don't report days to to pay accurately. That's hurt by business to some extent over the years, as 30 days to pay is less attractive than 15 days to pay, and that makes it harder to get trucks when the market tightens up. If only I had more time to followup with everyone who reports inaccurately and the credit reporting agencies who will not take responsibility for the information they put out.