Is it called FATORING? It directly takes only the profitablity out of your runs. You generate $1.50 a mile just use for example. Pay for insurance, fuel, maint. tires, cell, all the electronic gizmoes in your truck, load locks and such equipment. Thus adding up to just for example now, .55 cents. Your true profit thus being .95 cents in your pocket.
YIPPIE congrats you made some serious $ on that 1,313 mile run and all that time put into it.
Now go Factor that invoice, .11 cents a mile now your down to .84 cents not bad but you just gave away over 13% of your nest egg, hard earned $. If you have enough in savings, could I invest into something that would give me a return in three months of an average of 52% intrest (X4) on simple intrest.
Even if it were only 13% for a year, I cannot touch that and be conservativly safe. Aggressive yes but no guarantee.
Factoring does shield you from a customer not paying at all or going out of business.
I personally want nothing to do with billings and or collections, and more important I want nothing to do with Factoring. But thats me and I do respect others if they can be profitable doing it.
The key is Own Authority, charging upwards to $2.00 a mile to cover your losses when they occur. To many losses out of your control should spell diasaster. This is how Visa etc... Operate they know a % will not pay but over charge the ones who do to cover there overhead.
