transporter
Expert Expediter
Does anybody factor if so do you recommend them.
factoring
- Thread starter transporter
- Start date
as in MAX Factor...= make-up...*LOL*
60MPH
Expert Expediter
THERE ARE A FEW MEMBERS ON THIS SITE THAT MIGHT FACTOR THERE LOADS, I DO NOT. I THINK CHARLES D CAN GIVE YOU A NAME OF ONE THAT HE DEALS WITH THEY SEEM TO PAY HIM QUICKLY VIA COMDATA CARD. HAVING TO FACTOR LOADS IS NOT A GOOD SIGN. THE ONLY REASON I WOULD FACTOR A LOAD IS IF I HAD A SUSPICION THAT THE FF, BROKER OR CARRIER WOULD NOT PAY ON TIME. AND I WOULD CALL A FACTORING COMPANY TO SEE IF THEY WILL EVEN DEAL WITH SAID SHIPMENT PROVIDER. BECAUSE IF THEY DON'T, I DEFINITELY WON'T
Not to correct but to explain a little clearer you actually sell the paper to a factoring company. You have already delivered the load and now just need to collect your pay, so you more or less give it to a collection agent and he pays you what ever the load pays minus his fee and his fee is usually between 15 and 25% of the total run. And that is why I said you might as well be using your credit cards because with credit cards you might get lucky and get paid in time not to have to pay any interest.
If i'm having a bad month with receivables, and just looking to cover my @ss for a week or so......i'll factor. THATS THE ONLY TIME.
Deffinatly nothing ya wanna be doing weekly nor monthly. Rates range from 4-6% for fast pay [1-2 days] to 21/2-4% for slow pay [5-7 days]
Never heard of 15-25% rates. Can't imagine those paying those rates being around long.
Last year my fleet consisted of about 10 trucks and then over a couple of months period i added about 4 more trucks. Business was great and we were covering a lot more loads but the problem was getting paid quick enough to cover payroll. I do a lot of business off of "the load boards" and a lot of business with brokers and freight forwarders around were we live. Some pay as quick as 2-3 weeks, but with most companies from the day you put your invoice in the mail til the day you get a check in your mailbox, it will about 40-50 days, and of course there are a few who can't pay within 60 days for some reason. I had to find a way to recover my money fast enough to make payroll every friday. The only way to do that was with factoring. I use a company called lsq out of orlando, fl. They are very professional, helpful, and they charge 3%. So far, i haven't had any major problems and as long as you check your #'s with there #'s, everything should be ok. I don't use them for all of my customers', just the ones that i know that are going to be over 30 days getting paid. My fleet has grown to about 20 trucks now and think anybody with fleets over 5 trucks couldn't operate without a factoring co., unless they somehow had $50k in the bank from the get go. There are some horror stories out there about some factoring companies, but none so far about lsq.
transporter
Expert Expediter
thank you rodeehos ill check them out. i appreciate the info
Jefferson3000
Expert Expediter
15-25 percent? Oh please. The norm is 3-5%, if you must. I keep an account with one for the sundry LTL loads from brokers I don't know or normally don't deal with. The better factoring companies offer incentives that offset the cost of factoring, ie. funds dumped to fuel cards that offer cash price or even discounted fuel at participating locations. Some offer refunded costs for services they partner with, such as D&S Factors does with ITS Credit Check. I think they only require one load per month factored, and they give you that $35 service for nothing.
Some larger brokerages, such as Landstar and CH Robinson offer in-house 2-day pay options that cost you only 1-1/2%.
An alternate option would be a credit line at your bank that doesn't have a ridiculous rate.