Revolution Capital
- Thread starter Mia19
- Start date
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Im hearing several factoring companies are in a cash crunch because theyve paid out invoices and the cash is not coming in
as much as 2-3 day delays in paying out
as much as 2-3 day delays in paying out
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Cash is slow for everyone, particularly after the holidays, not surprised factors are in the same boat. Hearing rumors of a 3 Letter Factor delaying payment as well but again just rumours and no concrete evidence yet.
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You never know with private companies what's really going on behind closed doors, but so far haven't seen any sign of REV being in any financial trouble. They've been on a tear with acquisitions, which are very costly obviously but their CEO also isn't new to the game. The CEO is also a founder, which is always a plus considering they'll typically have more invested in its success.
Loren Shiffton is the CEO but doesn't have any money. He has relied on many investors and lenders. There is often employee lawsuits and they also seem to lend out to companies where they are getting burned. Rev has changed its name many times in the last few years and does not make money. Its much like ponzi scheme where they are trying to build it up and sell it for a lot of money.
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Maybe we'll see some factoring companies factor their invoices to improve cashflow... call it double factoring!
I think thats already happened based on the amount of debt that they carry LOL Sorry error its not Rev Can its REV CAPITAL and the CEO is Loren Shifrin. One of my friends used to work there, Loren used to come back to the office making fun of his factoring competitors, all while smiling with them at the various factoring company events.
Just to add my 2 cents.. This used to happen once in a while, usually just for a new carrier, but lately I've been getting calls & emails from a lot of the factoring companies just to confirm the invoice was received and the charges are correct. And this is for carriers I regularly deal with so it's not like a 1st time set up check call or anything.
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Just like every other business, factoring companies need to stay on top of their receivables. Phoning or emailing to ensure their invoice has been received, that it is correct and there are no foreseeable offsets, is just good business practice on their part They must be experiencing increased numbers of lame excuses for tardy payments.
I think that shows a good operator on behalf of the factor. It is conceivable that a carrier could fraudulently create an invoice to a broker, ask the factor to front them the money, all with the intention that in less than a month they'd be gone. The factor would be out the money and forced to collect back from the carrier on the contract which this site shows it is tough to do.
Personally, I do not deal with factoring companies. If the carrier cannot invoice me directly, I do not want to deal with it. A number of years ago I was burned by a factoring company where the carrier did not do the work and double brokered a couple loads out. I ended up paying twice for the loads. The factor was not willing to budge or go back to the carrier with the findings. It was easier to fight me for the money instead of their customer who was bound by their own contract. Who knows, maybe they did eventually get their money from the carrier, and they got enriched by it. I don't trust the carrier/factor setup anymore.
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The carrier/factor relationship requires an extra level of vigilance on the part of the payee. Like Jim experienced, we too have been burned by an unscrupulous carrier and an uncooperative factor resulting in paying twice for one shipment. While we do not refuse to work with factors, we have had to institute a series of safeguards to insure we do not get burned again. Recording the assignment letters and perhaps more importantly, the letters of release, adds a layer of overhead that we do not have when dealing direct with a carrier.
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I had the same issue a couple of years ago. The end carrier is the party that should be paid. I contacted the police and spoke to a reasonable officer. He told me that the factoring company could be held liable. And that the customer should or have paid the factoring company as they didn't do a thing. He even said it's possible it might be fraudulent. I contacted the factoring company and they ended up paying me and chopping the amount from their customer.
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