factoring company recommendations for 1-2 trucks

[Trucker17]

Hey everyone,

I'm looking to set up with a factoring company that offers non-recourse factoring. I've consulted with JD Factors, and they offer non-recourse factoring with rates of 3% for monthly invoices over $10k and 5% for invoices under $10k. Just wondering if anyone has recommendations for other factoring companies for 2 trucks.

Thanks!

 

[LrgCar]

JD or nothing, we used them before and had a great experience.

 

[SCAM CHASER]

JD is one of a VERY few factoring companies that do non-recourse. Possibly Riviera Finance as well.

 

[loaders]

Hey everyone,

I'm looking to set up with a factoring company that offers non-recourse factoring. I've consulted with JD Factors, and they offer non-recourse factoring with rates of 3% for monthly invoices over $10k and 5% for invoices under $10k. Just wondering if anyone has recommendations for other factoring companies for 2 trucks.

Thanks!

I am curious as to why you want to use the services of a factor, as opposed to handling collections yourself? Is it the non recourse option that appeals to you? Or is it the freedom of not having to chase down your receivables? In today’s market with lower rates and higher operating costs, giving up even the smallest percentage of your receivables could be hazardous to the health of your company.

 

[thebluffs1]

I am curious as to why you want to use the services of a factor, as opposed to handling collections yourself? Is it the non recourse option that appeals to you? Or is it the freedom of not having to chase down your receivables? In today’s market with lower rates and higher operating costs, giving up even the smallest percentage of your receivables could be hazardous to the health of your company.

exactly the right questions.....why factor in the first place

 

[Finar]

Factoring may incur a minor percentage cost for your business, but it offers significant advantages in terms of convenience and security, particularly with a non-recourse factoring company. By performing a credit check on the load, you can ensure the factor will purchase the invoice, providing you with peace of mind. Once you complete the load, submit your paperwork to the factor, and receive the funds within 24 hours, you can focus on running your business without the need to hire someone for invoicing or collections.

 

[loaders]

Factoring may incur a minor percentage cost for your business, but it offers significant advantages in terms of convenience and security, particularly with a non-recourse factoring company. By performing a credit check on the load, you can ensure the factor will purchase the invoice, providing you with peace of mind. Once you complete the load, submit your paperwork to the factor, and receive the funds within 24 hours, you can focus on running your business without the need to hire someone for invoicing or collections.

It’s those “minor percentages” that can mean the difference between profit and loss in our business. I get it, for some companies factoring a portion of your receivables might make sense. However let’s not kid ourselves here, the convenience a factor might provide comes at a cost. It is important to have that cost “factored” into your business plan.

 

[Igor Galanter]

@loaders : Agree. And here comes the "BUT".. Topic starter doesn't ask for advice to go with or without..

Let it be..

 

[ESSORTrans]

Factoring can keep you away of bad payers and of course cashflow is refreshed.

 

[ryanflabed]

Most of the good brokers provide quick pays. unless you can go with factoring companies who can provide non-recourse factoring. in my experience companies who stick with factoring will have financial issues, wrong factoring company can disturb your financial management

 

[Finar]

Non-Recourse factoring is especially good in this economic time. They have access to multiple credit companies to review credit and have an extensive database on companies and how they pay in the current economy. They see the slowing of payments sooner then you would on your own and with non-recourse once you have checked the credit to be sure the credit it good to take the load, once you have completed the work you submit the paperwork and get your funds within 24 hours with no need to collect or worry. Non-recourse might not be the cheapest, however you get what you pay for, peace of mind.

 

[GHSLI]

Factor Direct is also good, you can consult with them as well.

My suggestion would be to sign up with a company but avoid using them as much as you can. Use their online portal to weed out the bad players. Try to send the invoices directly to the customer/broker as sometimes the payments are made fairly quickly. Factoring is great for payers that cause trouble or just a pain to deal with such as JB Hunt etc.

 

[Finar]

Most factoring companies report good and poor payments to the credit companies, so it would benefit the customer/broker to pay the factor in a timely manner so they get good reporting against them. I'm not sure how many companies report (good payment) to the credit agencies, but it would be a great poll to see how many do or don't

 

[TBTrucking]

My two cents, for what it’s worth:

Managing your own credit is not beyond any of you. The tools are all online and are the same tools most your factoring companies use. We have almost zero bad debt, no factoring, no outside credit assistance.

Also, the best time to make your payment terms clear is before you haul. We have 1-2% of our receivables past net 60, and 25% of them are paid pre net 30 with no discount.

Don’t be afraid to have these conversations with clients - and don’t haul for the ones that dont respect an agreement, or tell them to pay prior to delivery (make that agreement before you load).

Factoring is a quick fix that will get you hooked and fosters bad habits in a company. Find a way to get your company away from it.

 

[flat deck]

If the owner-operator has a paid-off fully rebuilt pre-emissions truck and trailer (flat deck in the oil boom), then 3 to 5 percent factoring is pure gravy. If he or she is leased with a new truck and trailer payment, then every cent counts.

 

[Igor Galanter]

If the owner-operator has a paid-off fully rebuilt pre-emissions truck and trailer (flat deck in the oil boom), then 3 to 5 percent factoring is pure gravy. If he or she is leased with a new truck and trailer payment, then every cent counts.

" Pure gravy" in my book a good vacation money, so ney, will keep them too, eh

 

[Jim L]

If the owner-operator has a paid-off fully rebuilt pre-emissions truck and trailer (flat deck in the oil boom), then 3 to 5 percent factoring is pure gravy. If he or she is leased with a new truck and trailer payment, then every cent counts.

This is what I don't understand about our industry. The equipment owner with paid off equipment should be looking to make a return on their capital. They should earn the same amount of money as others in industry that have payments to make. The interest expense that they would have paid to someone else should be paid to the shareholder.

The equipment owner with paid off equipment should never consider factoring or need factoring - especially 3 to 5 percent.

 

[Finar]

This is what I don't understand about our industry. The equipment owner with paid off equipment should be looking to make a return on their capital. They should earn the same amount of money as others in industry that have payments to make. The interest expense that they would have paid to someone else should be paid to the shareholder.

The equipment owner with paid off equipment should never consider factoring or need factoring - especially 3 to 5 percent.

Those who choose to factor often do so because banks aren't approving everyone. Banks typically require two years of financials to approve a line of credit. For someone starting a company, it can be difficult without financial backing. Most companies don't profit in their first years of business, and securing any type of finance is a necessary cost of doing business.

When banks lend, you receive money. When a non-recourse factoring company finances you, they become a partner in your growth. They have a vested interest in your success and pay you immediately for the invoices you sell to them. Factoring isn't for everyone, and neither are banks. Running a business is challenging, and the more options a company has to support its growth, the better.

 

[loaders]

I think there are many in our industry, myself included, who look upon factoring as a means of “last resort”. In other words, the banks won’t finance you, you don’t have enough of your own capital, friends and family can’t assist you and you are operating as either a one or two man show, so there is no one that can concentrate on collecting receivables. Factoring has its place in these situations, but every effort should be made to reduce and eventually eliminate your reliance on factoring companies to finance your operation. Rates are terrible right now and may remain so for the foreseeable future, so giving up even the smallest percentage of your hard earned profit can be very problematic.

 

[Finar]

It's important to consider the perspective that factoring is merely a last resort. Factoring should be viewed as an alternative financing option that can offer distinct advantages, regardless of the circumstances. While it's true that factoring can be a valuable solution when traditional financing isn't available, it also provides flexibility and immediate access to working capital, which can be crucial for business growth and stability.

Factoring can help businesses manage cash flow more effectively by converting receivables into immediate cash, allowing for timely payment of suppliers and employees, and investing in opportunities without waiting for customer payments. This can be especially beneficial for small businesses or startups that may not yet qualify for bank loans.
Additionally, factoring companies often handle the collection of receivables, freeing up valuable time and resources that can be redirected toward core business activities. This can be a strategic advantage, allowing businesses to focus on growth and customer satisfaction.

While it’s important to be mindful of the costs associated with factoring, it's also essential to weigh these against the benefits of improved cash flow and operational efficiency. Rather than viewing factoring as a last resort, consider it a strategic tool that, when used wisely, can support and enhance your business operations.