For those of you who factor, you have two options when shopping for factors. Recourse and non-recourse factoring are two methods of financing where a business sells its accounts receivable to a third party (the factor) to improve cash flow. Here’s how they differ: Recourse Factoring Responsibility for Bad Debt: In recourse factoring, the business retains some responsibility for unpaid invoices. If a customer doesn’t pay their invoice, the business must buy back the debt from the factor or replace it with another receivable. Cost: Generally, recourse factoring has lower fees compared to non-recourse factoring since the factor takes on less risk. Use Case: It’s often chosen by companies that have confidence in their customers’ ability to pay and are willing to assume some risk. Non-Recourse Factoring No Responsibility for Bad Debt: In non-recourse factoring, the factor assumes the full risk of bad debts. If a customer fails to pay, the factor absorbs the loss, and the business is not required to buy back the debt. Cost: This type tends to have higher fees due to the increased risk for the factor, as they are taking on the possibility of bad debts. Use Case: Non-recourse factoring is ideal for businesses that want to minimize their risk and are dealing with customers who may have uncertain creditworthiness. Summary In essence, the main difference lies in the risk associated with unpaid invoices. Recourse factoring keeps some liability with the business, while non-recourse factoring transfers that risk to the factor. This choice impacts the cost, the level of risk a business is willing to take, and its overall cash flow management strategy. PRO-TIP Find a factor that offers the same non-recourse rate as recourse factor!

Hot take, I know. This post is obviously biased and if you want any non-biased advice on buy out best practices, I am happy to provide additional insight to anyone in this group that is interested. When I reach out and show a Transport company or Brokerage a significantly better rate with a non-recourse option, lower cost of AR/AP labor, API integration, and their interest is peaked...rest assured that HaulPay teams have been laser-focused on how to improve and expedite this process. We complete hundreds of buyouts a year and have a transparent. well-thought-out process to help make this transition as smooth as possible. Step 1: Contract Review We’ll review your existing contract terms with you. Then you will give notice to your factor to terminate. Step 2: Aging Review You provide us with the aging for your current open invoices. We’ll use the aging report to verify what we can buyout. Step 3: Sign the Agreement In the meantime we’ll get your new flexible contract going to review. Easy peasy, lemon squeezy. Step 4: Onboarding Once the other factor accepts the buyout terms we’ll wire the money. You’ll start onboarding and factoring as soon as this is done. Any questions? dan@haulpay.io 562.261.2981

There is a lot going on in the social world. I focus on LinkedIn, but have seen many going to X (aka Twitter) and some references to Reddit. Meanwhile, many drivers are in Facebook groups. What social platform is your favorite to talk about freight?

Whats you 6month plan? 1 year? Etc? With 400 companies a week going under in 2024 and general freight being at a stand still what are some key strategies you are using to stay ahead of the curve, and retain your customers while competing against the super cheap mega corps. Let's mix it up.

One of the Factoring industry's dirty little secrets is the UCC filing process on prospects. ALL the majors and most smaller factoring companies will place a UCC on someone when they are calling around shopping. My advice to anyone shopping. Start off your call telling the salesperson to confirm they WILL NOT place a UCC lien in your or your business's name until you have signed a contract. This terrible practice of prefiling adds unnecessary time (5+ days on avg.) to onboarding with whatever factor you choose. Its bullsheet. That said, HaulPay does not file until after you have been sent through our Underwriting process. Brokers Factoring paying over 1.5%, let's connect. Carriers Factoring paying over 2.49%, let's connect. 562.261.2981