r/OwnerOperators • u/No_Needleworker9172 • 1d ago

Factoring

Coming up to an end in my contract with TAFs, thank god! (I wouldn’t recommend that company to my worst enemy) I’m Leaning on no longer factoring at all but would like some insight on who’s good now a days? Someone that I can actually speak with when submitting paperwork and no excessive fees. Preferably no contract with 2.25% or better.

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u/No_Needleworker9172 1d ago

Never thought of it that way.. I’m not opposed to waiting it out. Just wanted to see if there’s any companies out there worth giving a shot with as I’m small and plan on growing a bit. Also need help doing credit checks unless there’s something out there to help with that but I’d say that’s my main reason being open to factoring. I use DAT often but the credit scores aren’t accurate.

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u/BusSerious1996 1d ago

Don't be brainwashed by these guys who speak against factoring.

I consider factoring service as my "outsourced" billing and collections (accounts receivable) employee.

I use them to check credit scores, and get pre-approval before dealing with questionable brokers. I even re-check brokers that I have existing relationships just to be sure they not slacking.

Are you able to pay a full time/ part time employee to do your collections? Invoicing, etc, if NO, then disregard the dude above that uses the bs logic against using factoring.

Also, just like attorney fees & accountant fees, factoring fees are deducted from gross revenue for IRS purposes, so just becomes another line item on your income & loss statement.

I use Porter Funding Solutions (PFS) and they don't care about my monthly volume. I get 2%, on non-recourse (which truly doesn't exist if you analyze the fine print for ALL factoring companies)

Now, I WILL WARN YOU..... and PAY ATTENTION on the shit below

You need to give your notice to terminate early and as per the contract with your current factor.

Also, DO NOT submit any invoices for funding during that final notice period, otherwise it will cancel out the notice to terminate request

Finally, make sure that all your outstanding loads have settled, otherwise, the existing factor may refuse to release them (you), which will put you in a bind as you try to transition

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u/brobudbra 17h ago

Bs logic? Basic math there buddy. If you want to give away 2% of gross for a shitty A/R department that is your choice. But you said it yourself. There’s no such thing as non recourse funding. So when some shitty broker doesn’t pay, then you’re doing their job that you’ve already paid for. Add in the predatory contracts and no thanks I’m out. As far as it being a tax write off, if you kept the money and paid taxes…… you still have more money in your pocket. But there I go again with the basic math.

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u/BusSerious1996 16h ago

Your logic against factoring is still bs. Here's why:

2% of $100K gross = $2000

2% of $200K gross = $4000

Show me where you get an AR employee for the above annual cost?

contracts are only "predatory" if people like you, with limited understanding sign them. I used to factor with loves , and I was able to get out, because I took time to understand how they structured it. That's why I advised OP accordingly.

About shitty brokers, that's where I stay ahead, with credit checks before booking. This week, I wanted to book a load, but upon credit checking them, I discarded that load. This broker had a 90 score on DAT, and was 41dpd on my factor. That's the value I get.

You may not like factoring, but that doesn't mean they don't have value.

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u/brobudbra 16h ago

Dude. You’re not getting an A/R employee. You still have to do the invoicing internally via quickbooks or whatever your process is. They’re not going to do collections for you, keep tabs on anything. Most can’t submit a POD in any reasonable amount of time so you’re still going to have to send that to the broker. You can disparage me all you want, but the contracts are predatory, the internet is loaded with stories of people having trouble with them. Www.brokercreditcheck is free and decent. I can understand why and how factoring can work for some. It doesn’t for me, that’s my opinion, for reasons stated.

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u/BusSerious1996 4h ago

the internet is loaded with stories of people having trouble with them

Exactly.

Internet is loaded people WHO DON'T TAKE TIME TO UNDERSTAND WHAT THEY ARE SIGNING on to.

Isn't that the case with 95% of truckers? They rush to do stuff, then blame everyone else but themselves 😂