Non Recourse Factoring Helps Truckers

Non recourse factoring benefits Riviera Finance trucking clients when freight broker Network F.O.B. announces in an email that they are going out of business.  For many other truckers, this is bad news because it leaves then with unpaid freight bills.

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Unfortunately, this burden of unpaid freight bills is not removed from a trucker if they have decided to sell their invoices to a recourse factor. The carrier will still be responsible and probably have to buy back the invoices in 90 days. This can be of great concern to the small trucker, because it might not be affordable to them.

There are options to try and collect on unpaid freight bills. A trucker can file on the $75,000.00 surety bond, but this will be quickly depleted. Another option is for the trucker to make a claim to the shipper for payment as the carrier of record, but this is a challenging process. An attorney? Costly. A collection agency? Expensive. A write-off? Likely.

There is another choice to eliminating your credit risk for unpaid freight bills and that is by choosing a non recourse factor. By selecting a non recourse factor they assume the credit risk upon purchase of the invoice. The carrier then obtains immediate cash flow on the invoice and also eliminates credit risk.

Trucking companies choose not to go to a non recourse factoring because it is considered more expensive. This become a calculated decision for them, depending upon their tolerance of risk and their resources to collect invoices.

Riviera Finance has 34 carriers with varying outstanding balances with Network F.O.B. and they will benefit from Riviera Finance’s non recourse factoring program. Now, our skilled staff will roll up their sleeves and by various means begin collecting on these unpaid freight bills.

Riviera Finance has been in business since 1969 and provides full service factoring on a non-recourse basis. We always have a vested interest in the credit decision and collection of an invoice.

Invoice Factoring as a Backup Source of Cash

broker_slide_man_aConsider invoice factoring with Riviera Finance as a backup source of cash flow.

“Waiting to get paid” is the not-so-new normal in the world of business.  In the U.S., companies take an average of 38 days to pay their bills.  In some industries, the wait is much longer.

But to the business owner, the waiting isn’t the hardest part.  Guessing when the customer will actually pay is the real challenge.

Among the many reasons businesses don’t get paid on time, here are a few:

  • customer cash flow issues (yes, customers have them too)
  • customer cash flow management (float on your money)
  • seasonal workload issues
  • customer staff changes
  • invoicing errors
  • lost or misplaced invoices
  • insufficient or inaccurate backup documentation
  • vendor preferences
  • disputes

Most likely, none of the above show up in the business plan!  Uncertainty of getting paid is one of the most common variables in small business, and a major cause of critical cash flow shortages.  But the only real way to avoid the impact of payment delays is to have a backup source of cash available.

Many businesses use non-recourse invoice factoring as a backup cash flow source.  It’s easy to get set up, and extremely flexible to the needs of the business.  When cash flow is needed, customer invoices can be submitted for payment and funded within 24 hours.  No debt is created, and there are no minimum funding obligations.  As a backup source, the invoice factoring line puts control back into the hands of the business owner without taking any payment flexibility away from the customer.

Take the stress out of guessing.  Set up an invoice factoring account with Riviera Finance today.

Invoice Factoring Gains Popularity as a Short-term Working Capital Source

Up until the 1970s, invoice factoring was a little-known source of small business financing in the U.S. Since then, however, accounts receivable factoring has grown steadily as a source of daily cash flow, accounting for over $150 billion in business in 2015. As a pioneering factoring company with a history that spans five decades, Riviera Finance has been at the forefront of ushering factoring into the mainstream as an alternative to traditional small business loans and an effective way for businesses to increase and predict working capital.

Because barriers to entry are low and industry information is readily available, hundreds of small factoring companies and alternative lenders have been formed in recent years and factoring no longer has the mystique it once had. Articles, websites, associations, and other sources of information are prevalent, and the industry has a heavy advertising presence. And while factoring is a risky business, it can still be profitable for experienced factoring companies.

More importantly, invoice factoring is a cost-effective way for small businesses to manage their daily cash flow needs.

There are a number of factors that make factoring cost-effective rather than costly. For one, non-recourse factors like Riviera Finance will guarantee credit on factored receivables, thereby eliminating bad debt. Full-service factors also offer helpful services within their rates, serving as a back office of sorts by pulling and approving credit, making collection calls, processing invoices, and more. Such services allow for a significant reduction in administrative expenses.

Riviera Finance invites you to learn more about how factoring can help your small business in uncertain economic times by using your accounts receivable to increase and manage cash flow.

Riviera Finance Attends Ohio Valley Oil & Gas Show

Riviera Finance was excited to attend the Ohio Valley Gas Oil Expo on April 28 & 29, in St. Clairsville, Ohio. It was a well attended event. Here Jason Smith is discussing Riviera Finance factoring program with a couple of attendees. Jason offers “What was realized from Riviera Finance attending the trade show is that there is a growing demand for contractor services by the energy companies as they increase production. While this is good news for the industry, many contractors are having a tough time with cash flow to run their business when waiting for payment from the energy producers”.image

Riviera Finance believes it can provide a solution to the contractors servicing the energy producers by factoring their accounts on a non recourse basis. Factoring accounts can increase the cash flow to the contractor allowing them to meet the increased demands of the energy producers.

 

Credit Enhancement: Supplier Assurance Letters

When your customer demands credit and your supplier demands cash, you might need more than standard factoring provides.

A supplier assurance letter, written by Riviera Finance on your behalf, can convince your supplier to sell you the materials you need ON CREDIT, long enough to deliver a finished product to your customer.  This transition credit can be a launching pad for your company’s success.

This powerful credit enhancement tool is simple.  It works like this:

A.  Your company receives a purchase order for goods from a reputable customer, Able Department Stores.

B.  Riviera Finance approves Able for factoring.

C.  Riviera Finance writes a letter of assurance to your supplier, Apex Materials, as follows:

a. Acknowledging the Able purchase order for finished goods (primarily using Apex materials)

b. Affirming Riviera’s role as factoring company in the transaction

c. Stating the amount owed to Apex (as per your direction)

d. Assuring Apex that, after the Abel transaction has been completed and factored, Riviera will directly transfer to Apex the amount owed

Although the Supplier Assurance isn’t a formal letter of credit on your behalf, it provides transaction security to the supplier, often enough to be a credit substitute and bridge the credit gap for future transactions.  Ask your Riviera Finance representative for more information on how a supplier assurance letter can benefit your company.

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