Rev Capital not paying carriers?

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youngtea

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Apr 23, 2015
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Had an invoice for a carrier that we paid to Rev Capital. Recently found out 2 weeks after payment that the order was not factored to JD Factor.

Looked up JD Factors google reviews and it looks like non-payment has become an issue in the last few weeks.
 
The invoice was initially factored by Rev Capital. Payment was made to Rev Capital by us.

JD Factors has contacted us and says the carrier has now factored the invoice with them and they are going to get payment from Rev Capital.
 
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Shakey said:
Sorry, but how does JD Factors fit in with this?

Rev not paying the carrier or JD Factors?
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S

Post in thread 'Revolution Capital'

Rev Cap sold off all their small revenue business (under $10-20k) to JD Factors. So now they only handle accounts with larger purchase amounts and the carriers that previously factored with Rev and did not surpass that threshold were moved over to JD.
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I am very curious about this. It is not an acquisition, so can companies just pass off a portion of their clients to another company without legally informing those clients affected?
 
Mike07 said:
I am very curious about this. It is not an acquisition, so can companies just pass off a portion of their clients to another company without legally informing those clients affected?
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It's common practice for financial companies to assign their contracts, and it's likely included in the fine print when signing up for factory. They probably didn't want to manage smaller accounts anymore, so rather than imposing new minimums on existing clients, they found it more efficient to assign them to JD. Not entirely a bad thing, JD is a very good factoring company.
 
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Mike07 said:
I am very curious about this. It is not an acquisition, so can companies just pass off a portion of their clients to another company without legally informing those clients affected?
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It really is no different than a customer receiving notice that the supplier they contracted with to perform a service is not to be paid directly, but only to a third party. When a broker tenders a load to a carrier, they fully expected to pay that carrier after the load has delivered, a fairly common business practice. Then, out of the blue, in the mail comes a Notice of Assignment that any and all invoices due to that carrier are to be paid to a previously unknown third party.......the factoring company. Now the onus is on the broker to ensure that this carrier hasn't factored previous invoices with another factoring company and if they did, does the freight broker have a release letter from the previous factor? I understand the reasons why some carriers use factoring companies, but in all honesty, we are seriously considering taking a small deduction from all factored invoices strictly for the added administrative work involved in processing them. On top of all that, we offer a quick pay option that is equal to or better than what the factoring companies offer. A Friday afternoon rant.
 
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loaders said:
in all honesty, we are seriously considering taking a small deduction from all factored invoices strictly for the added administrative work involved in processing them. On top of all that, we offer a quick pay option that is equal to or better than what the factoring companies offer. A Friday afternoon rant.
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Some carriers dont have the manpower or cash flow to sustain operations without factoring.
I can speak for myself, we used to use factoring, and since then we have added additional accounting staff and have made our collection efforts more aggressive where we keep the 3% in our pocket. I do understand how factoring can be annoying for good brokers like yourself that pay their bills on time but if everyone was like you there would be no need for invoice factoring. We have also thought about adding admin charges every time our team has to nag a tardy payer for payment, it goes both ways.
 
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LrgCar said:
Some carriers dont have the manpower or cash flow to sustain operations without factoring.
I can speak for myself, we used to use factoring, and since then we have added additional accounting staff and have made our collection efforts more aggressive where we keep the 3% in our pocket. I do understand how factoring can be annoying for good brokers like yourself that pay their bills on time but if everyone was like you there would be no need for invoice factoring. We have also thought about adding admin charges every time our team has to nag a tardy payer for payment, it goes both ways.
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The way I see it, carriers who rely heavily on factoring are suffering from 2 challenges. The first, as you stated, is a lack of manpower to efficiently keep their receivables current. I am sure there could be a number of reasons for this, however having a person to ensure that the money is rolling in is just as important as your driver keeping the truck rolling down the road. The second challenge is having too many slow paying customers on your client list. By using a factoring company and paying them their percentage of your receivables, is effectively subsidizing your slow paying customers.By giving up that percentage, you are paying your customer, broker or direct shipper, for the privilege of jerking you around! We all have a few deadbeat or semi deadbeat accounts, but if all of them are slow to pay, it’s time to get some new ones!
 
Trucking factoring has become far too competitive.
Factoring businesses can't make any money ..let alone all the bad debt they get with certain brokers.
 
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