Non Recourse Factoring Helps Truckers

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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.

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Riviera Finance Clients Benefit from Non-Recourse Factoring

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Several transportation clients have benefited from Riviera Finance’s non-recourse factoring programming when the transportation brokers, Great Bear Transport, Quebec, Inc, and Tropical Logistics went out of business. The transfer of credit risk was assumed by Riviera when invoices were purchased from the carriers on a non-recourse basis. Riviera then assumed the credit loss.

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Ohio Oil and Gas Association Meets in Columbus

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Last week’s Ohio Oil and Gas Association Annual Winter Meeting in Columbus, Ohio was well attended. Here, Jason Smith of Riviera Finance is attending the booth and discussing how factoring can play a role for contractors servicing the energy producers. 

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.

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Credit and Credibility

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imageA common misconception is that non-recourse invoice factoring companies don’t really care about their clients’ credit.  The logic goes like this:

  1. The client’s customer is the one paying the bill.
  2. The factoring advance is given only after the product has been delivered.
  3. The client poses no risk, and therefore no credit issue.

The truth of the matter is that the non-recourse factor relies heavily on the client’s credibility.  As with any relationship, as time goes on, trust either builds or erodes.  The factor either gains confidence in the integrity of the client and the business transactions, or becomes increasingly skeptical.  In the context of factoring, clients manifest integrity in a variety of ways, such as:

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