![]() ![]() When they told me this, it was the END OF OCTOBER!! So they start lowering my funding AGAIN. I ask how much they owe, and the factors tell me they owe $30,000, and haven’t paid since July. Then, one day, again, they say that one of my other clients is not paying, and they cannot fund me. So….I continue with the factors (because I have to) and I carry on. Fine, I’m resilient, and I overcome this obstacle, by racking up my credit cards, and trying to carry on with my business. ![]() They started to lower my payments by the $10 Grand, that the client owed me. Find out later, he’s left the city and owes a ton of money to everyone. So, I go there, ALMOST FOUR MONTHS LATER, and his office is gone. Isn’t this why I hired THEM? If I wanted to go around myself collecting invoices that are late and past due I wouldn’t have hired the factor in the first place. They then asked ME to go collect the money from the client. Now they start funding me for waaaaay less than my invoices are worth. So do the math…9 weeks, plus another 8 weeks before they told me, and we’re looking at almost FOUR MONTHS LATER, that they tell me he owes. Then, TWO MONTHS AFTER THE FACT, they tell me my one client hasn’t paid for the last 9 weeks for which I was providing my service to him. They were funding and funding and funding, and everything was going fine. Before signing the contract I said “what if you’ve already funded me, and then one of my clients doesn’t pay YOU?” and they said (though I can’t prove it in a court of law) “don’t worry, we always get paid, we have a strong collection team” They should give a percentage portion of your invoices up front, and the rest when the customer pays, minus the factoring fee. That, by definition, is essentially what they are – they fund early, and collect the money owed. However it was a recurring problem – getting payment on time – and so my accountant brought up factoring about three more times before I submitted to his “good idea”…So…I’m thinking, “great! this will really help!” Now I will have more cashflow and someone to help me collect!įactors supposedly help by funding before your customer pays, and aiding in collections. I figured if I wasn’t collecting funds owed to me, I could just cease my service to that company until they paid, which has worked in the past. I said no, and that I didn’t like the idea. I was experiencing a small problem collecting invoices on time, so my accountant (who received a $500 referral payment from the factoring company!) suggested I use a factor. KEEP ON TRUCKIN’ĭon is so right! I am now in the midst of closing down my business after being used by a factoring company! If a company has more than 3 pages of contract, DON’T USE THEM! If you cannot fully and completely understand the contract, DON’T USE THEM! If you talked about something, asked if you’ll get it in writing and then get the contract with none of it in it, DON’T USE THEM! #PLAIN&SIMPLE……. MAKE SURE YOU READ, READ, READ….THEN GO READ AGAIN. Sound like a good idea yet? The best thing I can tell you is, if you have to use a factoring company, don’t sign up when you don’t have time to READ. ![]() Sound like a good idea yet? They also have the right as “Security Interest” to put LIENS on your assets, documents and control your mailings, in effect at ANY U.S. They will provide you with a release letter BUT it is solely and absolutely your responsibility to notify & serve your customers with the release letter or else they can still receive payment from your customers even after your “agreement: is terminated. These factoring companies also send out UCC-1 filings to your customers, stating that payments are to be directed to them and not you, then when you decide to severe ties at the end of the “agreement” they might charge you for them sending out the UCC-1 filings. Make sure it outlines RECOURSE & NON-RECOURSE programs. You also will have to give them written notice prior to termination of the “agreement” or else the “agreement” will automatically renew, then you’re locked in again. Do NOT sign away your company’s life or your own by signing one of these “agreements” without READING & UNDERSTANDING everything! If you do, you WILL regret it. Also, the term “agreement” is never the case, it is a CONTRACT, plain and simple, they know the difference but expect you not to. They also give you their overview orally and when you sign one of their “agreements” it tells you that anything that was written or orally agreed upon prior to you signing will be overridden as soon as you sign because that “agreement” supersedes all else. Most of these factoring companies have hidden fees regardless of what they advertise. As someone who knows a lot of these factoring companies, I can give you a bit of advice. ![]()
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