Considering factoring

[expfact1]

So I've been looking into factoring trying to get a grasp on how exactly it works. I know all of the horror stories that are out there, and I know of how expensive it is. I had a rough patch recently and I realize that although the cost is high, factoring could have alleviated a few major headaches. So I'm looking into it as a possibility to have in my back pocket should I need it.

Anyone else have any thoughts? I think I need to find a factoring company that won't make me sign a commitment to factor all of my invoices, right? I've been doing reading here and here to try and better grasp it all.

One thing I'm wondering, how exactly does the process of adding in a "middle man" affect your customers?

 

[tknight]

They basically purchase the invoice from you at a reduced price usually 3-5% so it might cost you 5.00 per 100.00 I don't know any details as to how it actually works but I get paid right away from the brokers and carriers who use that service


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[crich]

you can get quick pay from alot of 3pl and brokers for about 1.5% sometimes cheaper than factoring.
factoring can give you good cash flow the biggest problem I see if your thinking your just gonna use them when you want to is that with most factoring companies they file a ucc and once you factor a certain broker then ever load you ever do for that broker belongs to them. so its good to factor companies like tri-state who have been known to take 60+ day to pay but companies like panther who pay fairly fast and ch robinson who will pay next day minus 1.5% plus give you 50% as an advance when your loaded you would be shooting yourself in the foot to factor them.landstar is another I would stay away from factoring they have the savings plus program that will give you discounts on fuel tires etc and will pay on com data card in like 2 days.