More heartbreak for truckers, especially owner-operators.
Many small businesses turn to factors to handle one of the messiest jobs, invoicing and collecting from customers. Factors collect a percentage for each transaction, and often advance the money to the trucker before it’s collected. It costs the trucker some of her earnings, but the money is available right away, and the factor handles the arguments with the shippers.
But when a factoring firm, such as CoreFund Capital, goes bankrupt, truckers who have not received funds for their invoices are out of luck. They have to stand in line with other creditors, waiting for a court to approve payment.
That means they don’t have cash for immediate expenses such as fuel, even though they have already completed work they have not been paid for. Some cash flow problem, right?
And there isn’t much that can be done. The contracts that included use of CoreFund for payment have to be broken (by a court or receiver) before alternatives can be put in place.
The firm is owned by some brothers, and a family feud may be behind the collapse. Let’s hope the truckers get paid soon.
Clarissa Hawes Thursday, July 28, 2022Carriers unable to pay drivers, buy fuel after CoreFund Capital closes – FreightWaves