There is nothing wrong with factoring when first starting up or when cash flow is needed once in a while during slow times. To do it repeatedly however is a waste of money.

 

Factoring can create cash flow without assuming additional debt. I would not want to go with a factor who required a minimum amount of monthly business or for me to factor ALL of my receivables. I spoke with one factor recently who would not accept any new business unless you factored a minimum of $50,000/month. Some factors, such as Transportation Alliance Bank (Flying J) have a minimum monthly fee. Others have a varying fee based upon how long it takes to collect the money. They may advance from 80-90%. If they don't collect within a certain time frame, then entire amount is charged back to the carrier. Personally, if I am going to factor, I would prefer to have a fixed rate and non-recourse. I think it will be cheaper in the long run. Even if you pay 1%/week, most will take 4 weeks to pay. Some may take longer. So there isn't much difference in the money and you don't have to worry about having something charged back. A friend of mine got into a situation with a factor. Initially, he could fax the bills and he would have money within about 1 hour or less. As time went on it took longer to get his money. He stopped doing business with this factor after he had a couple of large invoices charged back to him. He was paying about 6%. He hasn't factored in some time now. Most of his business is now COD.

 

30 days is sooo common amoung so many brokers....thats your main beef? Seems more a prob only if he didnt pay after the 30 days.

Didnt read all the responses and sorry if i missed something.........yeah brokers are bond scum, but actually had some treat me honerably....kinda want to start a thread...rate the brokers

categories:
1.Honerable
2.so/so
3. Questionable ethics
4. Pond Scum

Have a couple in the 4th already, but lucky no ones not out-right not paid yet, which seems your main concern

 

Revenue/mile - Cost/mile should equal a __________ ! (you fill in the blank).

 

Positive # or profit however you want to say it.

OK, What's the prize?

 

Merrick4,

First of all it's not a stupid question. The guy dispatched his own loads and the leased on O/Os loads. They ran reefer and usually together. He would always ask the shipper or broker how many loads do you have for the run he was taking. Once I found out his level of computer knowledge and instructing him on getting his laptop, printer, etc. load board access - he just ran with it. He is a really smart guy, good with computers, good communicator and good with his time management. I've spoken with many truck driver in the past 2 years and I must say he's exceptional and not the norm. No offense to anyone else but he's a planner and most guys that I talk you are not. Planning is the key to not failing.

Sometimes it's best to learn by example then jump in and that's what these guys wanted to do, learn first, work out the kinks to see if they truly wanted to be independent.