Searching for the right factoring company for your new or established business can be a one-way street to mis-information overload.
· How do you know who is telling the truth?
· Why do so many programs sound the same but offer different rates?
· What do I need to know going into the selection process to make sure the one I choose is right for me?
OTR Capital is here to help cut through the fake news and allow you to make an informed decision.
Trying to Compare Non-Recourse Programs – MYTH
No two factoring companies are alike, so comparing non-recourse rates does not work. When you are looking for a company to handle all your business’s finances, the rate is important. But the terms to get that rate is often much more important to the health and future of your company.
You can’t compare a non-recourse program that still charges invoices back at 60 or 90 days to OTR Capital’s true non-recourse program that has no chargebacks. The risk of putting the factor’s poor paperwork and billing processes on your business instead of theirs is up to you as an owner.
Don’t make the mistake of saving half a percent today but costing thousands later. Click Here for a full breakdown of the different factoring programs and types of Non-Recourse.
When a Factoring Company Tells You There Is “No Contract” – MYTH
Let me ask you a question. If you were a company offering tens, sometimes hundreds, of thousands of dollars to another business in hopes to receive the funds back in 30 days, would you make them sign a contract? There is not a factoring company in existence that offers a factoring program without a contract, nor is there one that will let you terminate and request a release at any time.
Every contract auto renews, and if you are still factoring with them you are still under contract. OTR Capital stands by its easy to read, open, contract that leaves no questions about the terms we are asking you to agree to. If you are told there is not a contract, they probably don’t want you to read it.
“Brokers don’t like carrier’s who factor” – MYTH
Broker’s need an invoice to get paid by their customer. If your factoring company is slow at billing, or consistently bills incomplete or illegible paperwork, the broker is less inclined to call you for the next load they need covered.
OTR Capital bills brokers the same day you factor the invoice and follows up to make sure it is correct and set for payment. Not only does that help your company build a better relationship with your brokers, but it prevents us from calling you in two months asking for a lumper receipt on invoice that is 70 days old.
You Can’t Afford Factoring – MYTH
Times are tough and carriers are looking to cut costs more than ever, and your factoring rate is probably near the top of the list. Although you may be looking for a lower factoring rate, whether for your current company or making a move to find it, it is very important to keep the other costs and risks associated with lower rate factoring programs in mind.
You may be paying less up front, but hidden fees, monthly minimums, poor billing and collecting practices causing chargebacks, poor customer service delaying pay times and keeping you on hold for hours, will end up costing you way more time and money that could have otherwise been saved and reinvested in the company.
Don’t forget, the lower the rate the longer and tighter the contract! Sometimes paying a bit more will result in less over time.
Want other myths busted? What do you look for in a factoring company? Questions? Call us at 470-900-3317 or email at Anthony@OTRCapital.com