Freight 360

How Factoring Works for Freight Brokers (with Steve Spoerl of Haulpay) | Episode 264

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Get ready for a deep dive into freight finances with Steve Spoerl, Director of Customer Success at Haulpay! In this episode, we unpack how factoring can be a game-changer for brokers and carriers, while also covering key insights on NOAs, non-recourse factoring, and even the Buffalo Bills' latest heartbreak. We also tackle the East Coast port strike and what it means for supply chains. Whether you’re a new broker or a seasoned pro, tune in for expert tips on picking the right factoring company and staying financially strong.

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Speaker 1:

All right, welcome back, ben. It's our 263rd episode of the Freight360 podcast. Man, we're getting old. We got a good one today. We're going to introduce a guest here in just a second. We're going to talk about factoring for all you folks that always have questions about factoring and your credit and all that good stuff.

Speaker 1:

But first make sure to check out all of the other content. We've got hundreds, literally hundreds, of other full-length episodes, shorter educational videos. We've got the shorts. We've got hundreds, literally hundreds, of other full length episodes, shorter educational videos. You've got the shorts. We've got blogs, you name it. We've got a whole bunch of stuff. But, yeah, share it with your friends. Leave a comment, leave a review question, whatever you want to do, that's how we answer your listener questions.

Speaker 1:

On the Tuesday final mile segment, which will come out Tuesday, as I mentioned. And make sure, when you're on our website, you can check out the Freight Broker Basics course, if you'd like, the educational option that we did in conjunction with DAT Full length, over 40 lessons, everything from how to start a brokerage, build a carrier network, get customers and even hire people. Well, without further ado, I want to introduce our guest here, steve Spurl of Hall Pay. Steve, really quick for those who don't know you or don't know Hall Pay, you can give a quick introduction of yourself and we'll definitely get more into your story and situation a little bit later on, but I just want to give you a quick intro here.

Speaker 2:

I appreciate it. It's a pleasure to be here. Gentlemen, my name is Steve Spurl. I'm the Director of Customer Success at Hall Pay, formerly Comfreight or the Comfreight Load Board. We are one of the newest, most up-and-coming factoring and financial payment platforms in the industry today, serving carrier companies and brokerages alike.

Speaker 1:

Perfect.

Speaker 2:

Really excited to be here with you, gents.

Speaker 1:

Yeah, that's why we love to have subject matter experts on, and you've known Ben for a little while, so, ben, thanks for putting that relationship together and giving us an expert. I don't think we've had a factoring episode really, have we? I mean, we might have touched on it a little bit.

Speaker 2:

The F word.

Speaker 1:

Yeah.

Speaker 2:

Subject so oh yeah, oh, and I am a previous broker too, if that means anything to your audience as well.

Speaker 1:

Yeah, it gives you some cred, some street cred, so, ben, what's the one?

Speaker 1:

I like, you man, I like the new hoodie you got on, oh, yeah, yeah, yeah, I made this Merch. So I'm a big, don't judge me. I love Old Navy, like I just love their clothes, but like they typically don't have any logos on them. So I bought some old Navy hoodies because they're super comfortable and I'm in Buffalo and it's October, so it's hoodie season now and my wife has a cricket, like one of those things that you can make. Well, clearly, you can do iron on for clothes, you can make like window decals and all kinds of stuff like that. She doesn't use it. I have learned since in the last five years, learned how to use this thing and I have made some freight 360 hoodies now, some t-shirts um, yeah, good stuff, but yeah, that's the. If you're not, if you're not watching on youtube, you have no idea what we're talking about. But, ben, did you survive the uh, the uh hurricane you guys probably didn't get? You probably just got some rain on your side.

Speaker 3:

We just got mostly wind, I mean a lot of wind. I mean it was very, very windy, but we just had the bands. I mean that storm was enormous.

Speaker 3:

I think they said it was like one of the the largest storms, like top five yeah and like the past, I mean, I don't know 100 years or 60 years like a very long period of time is it like 400 miles wide or something like that just yeah, yeah I mean watching it it come up, like it was like it looked like it was probably like, yeah, two or three times the width of Florida, Like watching it come up the side, I mean it looked like it was the size of the state of Georgia when it kind of hit the coast. I mean, from like the radar perspective it was enormous, yeah.

Speaker 1:

So yeah.

Speaker 3:

Thoughts and prayers to everyone up in Asheville and everyone out in North Carolina, everyone up in Asheville and everyone out in North Carolina. I mean they got decimated. I know we had some friends that have family up there that are like for like a week nobody could get to them, couldn't get food, couldn't get water. People were ATVing in and out of areas probably still are. At least I was talking with Tanner yesterday. I saw him down in Miami and he's up in Atlanta and he's like I know a lot of people up in Asheville that like literally can't get in or out. And you know again, hopefully it gets better there sooner than later and at least you know first responders and stuff are starting to get to those areas, hopefully now.

Speaker 1:

Yeah, totally Well, we'll do a quick little sports hit here and then some freight news. I'll start with my Buffalo Bills. Absolutely embarrassing news. Um, I'll start with my buffalo bills. Absolutely embarrassing the. Uh, sunday, sunday night game in baltimore was just atrocious. Uh, I was trying to like find the good because, if you didn't see it, they lost 35 to 10 and um, the good thing about that loss and I'm just trying to hunt the good stuff here is that, by the by the time that you're towards the end of the game, you already knew the game was over. So you weren't like, you weren't like grasping to anything for any last minute. Josh allen, hail marries. It was like no, the game is, the game's over, we just got to get to the end of the fourth quarter and we can move on to the next week. Uh, because there's a lot of games when, like you know, it's fourth quarter, you had two minutes left and you're like if they can get down.

Speaker 1:

You know within scoring range. You know maybe a non-sidekick, but you know we were. You know we had accepted the loss before the game was over. So yeah, but yeah, do better it was. It was a run really stealers, awesome man, like another you know, we're both three, no, going into it. And now we're both three and one first half looked horrible.

Speaker 3:

I mean they kept it to a three-point game, I mean. So I mean there were some positive takeaways, I guess. I mean I think the biggest is the Steelers have started slow all year in the first half, but like you can't do that everywhere, and I think they definitely should have beat Indianapolis and hopefully, who knows I don't know whether it'll be Justin Fields or Russell next week, but it looks like it might be Russell and they haven't made any definitive choices yet, but we will see a couple of days.

Speaker 1:

Steve, you're from Columbia, Tennessee, our South of Nashville. Does that make you a Titans fan? Or does that make you a I don't watch NFL fan, or what's your allegiance?

Speaker 2:

Growing up in a house full of women and a father that traveled didn't gain a whole lot of appreciation for watching sports on TV At least never, got that vote in that house. So, moving down here it's been a lot more about learning the college sports because, you know, I'm originally from up north and spent most of my life in the Illinois Ohio area and now they're I mean, everybody's. You got to have your hometown team, so I guess the. Titans, but it's really college football down here.

Speaker 1:

And I'm slowly but sure I'm getting involved and trying to learn.

Speaker 2:

It's just a whole different culture.

Speaker 1:

Yeah, we don't have that in Buffalo. I mean, we have the Buffalo Bulls, but they're not a, we're an NFL city. You're right. You get to the south and it's like it is college all day, all day long college. All right, fair enough. Other sports I got nothing else, ben, do you? I got nothing else All right.

Speaker 3:

For all the haters Right YouTube comments. I hate our sports banter.

Speaker 1:

Skip to this next part. News Dude. I mean porch strike, I don't know what else to that's. All I want to talk about is the port strike. We're going to answer some detailed questions in the Q&A on Tuesday. But it happened, man, october 1st. So that was Tuesday of this week, just after midnight, 1201. How many Was it like? 15,000 workers on strike, it's more.

Speaker 3:

A lot. I mean it goes all the way to the Houston ports. So I mean it certainly isn't just what we would consider the East Coast.

Speaker 1:

Yeah, east Coast and Gulf ports, yeah, but the ILA right. Yeah, the International.

Speaker 2:

Harold Daggett.

Speaker 3:

That's what I wanted to say, like the two things Dooner from Freyways posted this in the past couple of days. That's what I wanted to say, like the two things Dooner from Freyways posted this in the past couple of days. I don't know if you saw this, but like the ILA the leader, I guess, who's leading the negotiations apparently had like this giant gold medallion on like looking like Mr T oh for his interview yesterday.

Speaker 1:

Yeah.

Speaker 3:

And then there was a post from Elon Musk that said Harold Bagger I'm just trying to find it it said he was driving a Bentley and recently sold his like 75 foot yacht. And Elon said this guy's got more yachts than I do. And again, like I can't verify any of it, but it was a pretty funny meme. Meme that like they were kind of pointing out that this guy made like over like $1.5 million or something last year as like a local union rep and heading the ILA. So I mean, again, not a great look when you're trying to negotiate on behalf of blue collar folks that are working the boards.

Speaker 1:

So the biggest thing and I'm going to give my take on it and I don't really care if people disagree with me, you're welcome to the talking points or the arguments is that the union workers want a new contract that will give them a substantial raise throughout the length of the contract and it will limit the amount of automation that's allowed to come into the ports. Hey, I'm all about make more money. I'm not a big union guy personally. I mean literally one of the things that we lobbied against in DC is the voting no on the PRO Act. But automation I mean like automation makes your job more efficient, it makes it safer in many cases and it redirects the usage of the human being from from operator to more of a supervisor of the automation. And you know these guys are afraid that it's going to get rid of their jobs. I think the West Coast ports there's like three of them in California that have gone with automation and it only reduced the workforce by like four or five hundred across all of those automation.

Speaker 3:

Here's the other thing.

Speaker 1:

I'm like this is where the future is going. Don't I mean embrace it, don't say, well, you can't bring new tools in here, I don't. I don't need a, I don't need a bigger hammer, I already have a hammer and it requires me to swing it.

Speaker 3:

So I don't know, I'm not a fan of it.

Speaker 1:

I think they're, again, not a big fan of unions in general, unless certain circumstances. But that's my take. What do you got?

Speaker 3:

Ben, the two things. One like and this was like really recent, because leading up to the strike, a lot of the cargo was diverted to the West Coast again, so they saw significant increases and I can't remember the percentage, but it was a lot. It wasn't exactly apples to apples for when the pandemic happened, but it was close enough that it was a comparable. And the interesting thing is, nothing that happened during the pandemic happened last month. I mean, you didn't see the backup of ships, you didn't see containers getting stuck, you didn't see lives being risked because there were containers stacked so high which was like a huge hazard to the workers to this very point and, more importantly, to the United States economy and the other economies. Other countries, like it, didn't almost stop trade because of the increase in volume.

Speaker 3:

And to me, like one of the most important things in supply chain is flexibility. If you can't handle the ebbs and flows and the increases when things happen, then like things shut down. And again, not about politics, but that absolutely was a huge contributor to the inflation that everybody experienced. And again, it wasn't just us, the entire globe experienced it, because when you shut it down and turn it back on, it disrupts everything and then people fight and spend more money to get enough product to keep stuff on the shelves so that they can make money. Right Like, and again the fact to your point, like they automated some of it, they didn't, you know, eliminate the workforce and now they're able to handle increase and decreases in volumes, like fairly effectively and efficiently.

Speaker 3:

Right Like, I'm sure there were issues, but nowhere near what we saw of 120 ships backed up all the way to Hawaii trying to get their cargo off the ship and then you got the other side of the country going. We're just against this altogether. And again, I am absolutely for, you know, labor negotiations and for them to have some leverage to negotiate with large companies, like ports and things. However, like it's so much self-interest that it seems as if, like they're not even taking into account, like, the entire economy. This is affecting the entire economy. If this lasts a month, we're going to see inflation for sure to some degree. All because of a small number of people are scared about what the future holds for them, and to me that's a misalignment of incentives, interest, and it's not really benefiting anybody other than a small group of people. And clearly this guy and I found the post.

Speaker 3:

I see it, yeah, harold Dagger earned $728,000 last year from the ILA, plus $173,000 as president of a local union branch. He drives a Bentley and recently sold his 76-foot yacht Obsession and Elon Musk quoted dude has more yachts than me. I thought it was pretty comical.

Speaker 1:

He doesn't have. He doesn't have more spaceships, though. So, um, Steve, you got any take on this or do you want to, uh, withhold yourself? You're welcome to do either.

Speaker 2:

I'm. It's interesting, it's, you know, what's the role of the union playing, especially with the ports being? I mean? Correct me if I'm wrong, gents, but I'm pretty sure most of that's government controlled to begin with. So you have unions involved with government as the main company. You know, it's just going to be interesting.

Speaker 2:

We're wondering to see when we're going to start running out of toilet paper on the shelves. So I already poked the wife. You know, maybe it's time to get over costco and double up the order this month, just in case it was funny.

Speaker 1:

We we had, uh, kathy hokal, the governor of new york state, was on tv and was like this is not going to be. Like covid, don't rush to the stores and buy up all the toilet paper. And I was like, oh gosh, we're not here comes.

Speaker 2:

No, it's just yeah, all right, I wasn't thinking about it. Now is so yeah all right, yeah, all right.

Speaker 1:

Enough port talking news.

Speaker 3:

Just single-handedly created a rush on toilet paper. What's that so? We just single-handedly created a rush on toilet paper for everyone listening.

Speaker 1:

Yes, oh man, all right, well, we'll move on. We'll follow this story closer, though, all right. Well, we've got a conversation we're going to have today about factoring. So, steve, we gave you a brief intro there earlier. You were the director of customer customer success. Yes, sir, I love that title. It's basically like we're going to. Yeah, does that mean sales, right? Is it like you're?

Speaker 2:

Oh, I wear a lot of hats over here. So, it's an all encompassing type thing, but my my primary focus is supporting our internal teams and our clients to make sure that we're all successful and are growing together, and doing everything that we can to take away the sting of the F word that is factoring, and bring it into more of a clear, transparent environment. Uh type of program definitely so.

Speaker 1:

We.

Speaker 1:

We get a ton of questions from people, and this is both the the carrier side and the brokerage side of factoring.

Speaker 1:

So I wanted to take today's episode as an opportunity for us to have really like a basic for like a you know. For those that don't know, like here's what the one-on-ones of factoring you know as it pertains to hey, you're a brokerage that can't sell funds, so you need to use factoring. Or you're a brokerage that, whether or not you factor your, your invoices, you've going to deal with a carrier that's going to have a factoring company that's got an NOA, which we'll talk about that and how you deal with you know, with those things. And there's been like literally for for carrier vetting and we're not talking about carrier vetting today, but one of the one of the rules that my brokerage uses in highway is, if the, if the carrier uses a factoring company that is known to associate with double brokers, we flag them. So we can talk about the good, the bad, the fraudsters those that collude you know how to select a factoring company, all that stuff.

Speaker 3:

But that's a good point too, and I want to make sure we touch on this too is like the protection a factoring company provides to a freight broker to make sure they're paying the correct carrier Right, and like how all of that functions and what the benefits are.

Speaker 2:

Totally All right. Some of the misconceptions thereof.

Speaker 3:

Fair enough, yeah, it's true.

Speaker 1:

Because it is correct in a lot of ways. Go ahead. I'm sorry, we're going to get into all of it. This is going to be juicy. We'll start at the beginning. So if you're dealing with the, basically we want to talk to what is factoring? Sure, so if you got someone that's brand new to brokerage and they're like wait, and they finally understand, like OK, there's going to be a gap between when I'm receiving the majority of my payments and when I'm expected to pay my carriers and they find, ok, well, I've heard of this thing called factoring. They could help me out. Let's talk through that. What is factoring in its most basic sense?

Speaker 2:

The most basic sense. There's two basic forms of factoring out there. There's recourse and non-recourse factoring. Now, it's kind of like one of these terms that is not necessarily defined black and white and there is some gray scale to it, but the idea is recourse factoring is what most factoring started as and the vast majority of factors still operate as. It's a loan structure. So you, mr Broker, running the load for ABC Shipper, abc Shipper pays in 30 days. Your carrier wants paid in 10 days. You need to cover that gap. The factoring company will lend you the money to pay your carrier, maybe even provide you an advance, and then try to collect those funds from your customer. If your customer doesn't pay an X number of days, they will charge you back, plus interest and penalties.

Speaker 1:

Hence the name recourse.

Speaker 2:

Exactly Okay. Now non-recourse is supposed to be, and there are different flavors of non-recourse because everybody seems to want to be claiming that they're a non-recourse factor these days. But I've seen language in contracts that say we're non-recourse for up to 90 days, so that just means you're recourse.

Speaker 2:

So you need to be careful with non-recourse and understanding what they are actually selling you as non-recourse. But true non-recourse is operated as not a loan structure but an invoice purchase. So for what's really unique with Hall Pay and one of the things that's nice with our platform is that we're basing our credit decisions on the customers, on our customers' customer.

Speaker 2:

So if you're a broker and you're brand spanking new and you have no business credit, you're not going to get a line of credit from your traditional factoring company unless you have a personal guarantee or some property to put up or some sort of collateral With us. We don't need that personal guarantee from you because we're basing our credit score on your customers. So if your first customer is Coca-Cola, we could get you a $10 million credit line right off the gate because that credit is based on Coca-Cola's credit score, not on yours. So there's an advantage in that perspective, not on yours. So there's an advantage in that perspective. Non-recourse for us at Hall Pay also means that we are not charging you back if your customer goes out of business or if they just don't pay due to a credit-related decision. The only time we have recourse to charge someone back is in the case of a claim, deception or fraud.

Speaker 1:

Gotcha, so this is actually, I'm glad that you brought up the credit part of it because, ben, you and I have talked about credit vetting and, for those that don't know, we're instructors for the TIA's New Broker. They've changed the name of it recently the New Broker Success. It used to be the Success Program but now it's new broker training or whatever.

Speaker 1:

Anyway, one of our lessons we teach is on best practices with customers and credit vetting and things of that nature, and we've mentioned that oftentimes a good factoring company will do this job for you because they don't want to put their funds at risk for a customer that is not worthy of it, so they will help you in that regard. So we always recommend factoring is great for new brokers because it solves more than one problem that you have, which is the financial problem of cash flow and protecting yourself from the risks of customers that may not pay their bills Absolutely.

Speaker 2:

And I'll even throw it in there. It's not just for new brokers. One of my very first customers that I brought on board here at Hall Pay three and a half years ago was a gentleman that had been a broker since 1985. He had been doing multiple loads every week with this customer for 30 years. Covid hit and they went out of business on him with, sticking him with $100,000 in unpaid invoices unexpectedly after a 30-year relationship Pretty much killed his business until he was able to find us and we were able to help him build his credit score back up. But that's another way of looking at factoring, is it's almost you're paying a small percentage as an insurance policy to make sure that your bills are getting paid.

Speaker 1:

Because we don't call back.

Speaker 2:

We're paying your carrier, regardless of whether you get paid or not.

Speaker 1:

So I want to hit on the concept of how you know. So we've explained, not recourse and non-recourse. So basically, hey, buying invoices versus being a temporary loan. Obviously the factoring company needs to make money here and there's going to be a cost to the broker. So can you talk through some of the not necessarily hall pay specifically, just in general, how a factoring company will charge, like how they would charge a brokerage to use their services?

Speaker 2:

Generally it's based off of what we'd call the shipper invoice amount. So if you're invoicing your shipper $1,000, you're paying your carrier $800. They're going to charge you a flat rate on the shipper invoice amount. So if your rate's 3%, you're going to pay $30 on $1,000 invoice for them to purchase that. Now sometimes there's reserves that are held back until the invoice is paid.

Speaker 2:

If the carrier wants quick pay, the fee might be a little higher or lower depending on who's absorbing the fees. Everybody's structure is a little different. Just for my shameless little Hall Pay plug, one of the cool things about our platform it's kind of a double-edged sword. It makes it a little bit more confusing on price point, but it also makes us the most affordable platform out there is that we have two discount rates that we apply to every broker transaction One that the broker pays if they take an advance, if they want to take an advance, and one on the carrier's payment. And if the carrier's taking any of the quick pay options, the broker has the option to pass that quick pay fee along to the carrier entirely. So in essence, a broker could operate on HallPayace platform for next to nothing. Our average broker on our platform. If you compare us apples to apples to a flat rate program is paying somewhere in the 1.1, 1.2 to 1.6 range.

Speaker 3:

Okay, and I want to explain. I want to reiterate that too, because I use this right, and we've spent a lot of time going through the different options and I've used, I would say, some non-traditional ways of doing this with different situations. Right, and the first is you also have two. Well, the first thing I wanted to reiterate too for everyone is that, like the one of the reasons I really liked working with you guys is that you don't have minimums and you're willing to work with newer brokers. Most of the larger factoring companies now have like a $50,000 a month minimum and it's very difficult for brokers in their first year to even get a factoring company to work with them is the first thing I want to point out. The second is you also have the ability to self-fund your own basically factoring in a way, right? So, like one of the brokerages that I'm working on this year, like we're backed by PE and cash wasn't the issue. The issue was credit reporting and the facilitation of payments and making sure they go to the right places, and then it's easier than us literally ACHing and coming checks to every carrier doing that all in one place, right, and the platform one will allow us to choose, so I can look at one customer and go that one we're factoring, this one we're now going to cashflow with our own money and I can choose that per customer. So for newer customers, I like to set them up under the factoring for that reason because again, I can look at their credit, just like Nate, and I can like on Ansonia. However, like that only really gives me a window in how they have been paying. I want to see how they're going to act and pay me as a company, right? Are they going to slow pay us versus other vendors, versus other vendors that aren't even transportation? So we work off like two, three months letting them factor, see how they're paying, and then we can roll them over, right, and to fund them ourselves at a lower percentage, right?

Speaker 3:

The other thing that I wanted to make sure everyone understands is that transaction right. So say it's a thousand dollar bill to your shipper, and let's so say it's a thousand dollar bill to your shipper, and let's just say it's a 15% margin. There's $150 to the brokerage and $850 to that carrier. What you're able to choose is do I want that 150 to come to me right now and then I pay a fee? That's the advance. It's the margin advance and you can choose on every load. Do I want this one advanced or do I want to pay no fee and get it when the customer pays the bill? And then on the second piece, which is the eight hundred and fifty to the carrier, I can choose any of the options for quick pay which are, and you have one day seven.

Speaker 2:

Day 14 day, 21 day and 30. 14 day, 21 day and 30.

Speaker 3:

Right, and then underneath there I can determine who and how much of that fee is being paid. Am I going to charge the carrier all of it? Or maybe it was a carrier that just started working with us because we were a new brokerage and I said, listen, I'll quick pay you guys and we'll eat the fee, and I can literally move that slider on every single load. I do not, I set it so it'll go automatically if I don't want to. But if there's an instance where a carrier calls me it's like, hey look, can you really get us this cash sooner? I'd really appreciate it. I can move that needle right back and I can eat that fee. And that helps me as a new broker because, like, I'm able to incentivize carriers to work with us as we're building our credit and eat that cost temporarily and then over time, if they want to keep doing it, okay. Well, now at a certain point, like that cost is going to go to you guys.

Speaker 1:

Let me let me ask a question here, because I I, the two brokerages that I've spent a lot of time with, neither one factored we. They were self-funded, so my my involvement with factoring has only been through third party. Someone that I'm helping has a factoring company or talking with someone like Ben right. So let me ask this you explained how you can have the invoice funded for yourself and also payment made to the carrier directly, with your variety of payment terms and costs associated. Are you able to just receive the money as a broker and then, hey, I'll pay the carrier whenever and however I want, because I feel like I've ran into people that have mismanaged that and gotten behind. So can you talk through the process of those different options?

Speaker 2:

Yeah, I'd be happy to Thank you for bringing it up, Ben. I mean, that's really what Ben's talking about is our newest product that we launched just a little over a year ago, which is called our Self-Finance Platform. Now, what makes us I'm just so, it's a fun place to work because we're constantly bringing out this new stuff and it's really cutting edge. It's very similar to what Triumph is offering to some of the largest brokers out there the ability to self-fund.

Speaker 2:

They don't need to know we don't need to know who your shipper is. You can handle your own customer relationships, your own billing, but we want you to be able to use our platform and our payment rails to pay your carriers, used as a solo product or in combination with factoring, as Ben was describing. You have a virtual wallet that we set up for you on the platform that you can deposit funds into and as long as there's funds in there, you can schedule an invoice payment or you can schedule a payment to an invited carrier at any time and we're charging you a flat fee. It's, I think, currently right now we're at $5 for non-factored with no invoice and $10 with invoicing, and if you're charging your carrier, let's just say you're paying a carrier $1,000 for Easy Math and they're paying a 3% quick pay fee, that's $30 bucks to you $30 bucks, $90 bucks, $90 bucks.

Speaker 2:

I'm charging you five. You're keeping $85 net revenue for using our platform. We're paying you to use our platform if your carriers are taking quick pay.

Speaker 3:

Right? And the other thing, too, that I want to share with everybody is like what is really the benefit right? And when you say your payment rails, I want you to tell everybody what that means, because to me that is a huge time saver. The biggest thing that I've spent time on this year running a brokerage is doing invoicing, reconciling things and paying and making sure carriers have set up the way to get the money right and they're factoring companies. So I want you to talk through how convoluted this can be to do manually, and then what it's like to do it through the platform, because this is where I think people totally underestimate the amount of time they're going to spend on this task after they are moving some freight.

Speaker 2:

It's definitely one of our areas that we have. You know, we're working on the hardest to try to automate as much as we can, because it is labor intensive, and that's the onboarding of invited carriers. So when a broker wants to invite a carrier onto the platform, we need to. As far as I'm aware, currently in the United States we're the only company out there that does this. But we not only verify the carrier, we check them against carrier 411, double brokering reports, things of that nature but we're also verifying that the account information they provide to us can be linked physically to the actual business and not a disgruntled owner, operator, pissed off employee or a fraudulent party pretending to be that carrier. So every direct payment information on every carrier of the tens of thousands that are set up and approved on our platform, we verified that payment information. So when you're using our payment rails, what we are doing is we're guaranteeing you that the carrier you're paying is actually the carrier themselves and not one of those fraudulent parties.

Speaker 3:

And that's what I want to say. Right, so say you're setting up a carrier and a dispatcher sends you over hey, here's our payment information, and you set that up and you ACH them the money. Then you find out later that they just sent you their wiring information and you just paid a person that might have left that company the next day. Right, well, you still owe that company money, first of all, and maybe you dispute it in court. The second is like there's so much fraud and being able to hack emails and being able to send fraudulent invoices to companies that it's really hard to tell if that is the bank account associated with that company. And if you call the bank, they won't give you any of that information. There is no way for us, as a broker, to verify that bank account is associated with that company other than using a service like this. And the other thing I wanted to mention is like what this looks like from a user.

Speaker 3:

So the carriers use my packets, like whether it's my carrier packets or RMIS, they get dumped into my TMS and then I take their MC and it's integrated with Hall Pay, so it imports it there with my loads and then the carrier show up.

Speaker 3:

Now they get sent a link right from Hall Pay. I don't have to send that and they don't even need to give me their bank account. They literally use that link and I think it's Plaid is the service you guys use and basically just like, however you connect a bank account to, like Venmo or any other system that you normally use, and connect your bank to, that's what happens. So the carrier gets that they've got to log into their bank, it attaches it to the correct bank account and then I don't have to do any of that stuff. And then, in addition to that, right Like, if they don't do it and I'm trying to pay them, their team reaches out to that carrier. They don't even call me, they just send me an email and go hey, we've reached out to them six times. I send a couple emails and go, hey, I need you guys to fill this out. Then they do, and I don't do any of that legwork whatsoever, none of it, and it's all done and verified behind me.

Speaker 2:

We're also following up with their factoring companies getting NOAs If they need to switch NOAs if you're a brand new broker and you're not approved for credit but you already placed their NOA, we'll help coordinate.

Speaker 3:

What is an NOA? Explain that for everybody. An NOA, yeah, that's absolutely Notice of Assignment.

Speaker 2:

It's a simple one-page legal document that basically is in place, saying that, hey, this carrier company, all payables owed to them should be paid to factoring company ABC. And once that's in place and the team would go for brokerage right.

Speaker 1:

So if I'm using Hall Pay, you're going to have a notice of assignment that. So when you go to invoice my customer, you've got the legal ability to do so.

Speaker 2:

If I am providing you funds, if you're using us for self-finance only, noa is not in place because you're just using us to pay carriers. You're handling all your own invoicing Basically. Essentially, it allows us that if I'm advancing you the funds, nate, to pay yourself or pay your carrier, that I have the legal right to that money from your customer. That's what the NOA is. So the customer can't turn around and pay you and you get to keep double the money and I don't get anything. So that's the idea of the NOA. The LOR is a letter of release. There are two different kinds. There's a general letter of release saying hey, you're no longer a customer of this factoring company, all funds can be paid to you directly. And then there's what they call a debtor-specific LOR, which is more common, which is saying hey, you know, abc shipper Hall Pay no longer has interest in Nate Cross's brokerage.

Speaker 3:

You can pay them direct, and here's why that matters too. And I want to add this, because it's the same thing from a carrier point of view, right? So again, if a carrier is into an invoice and you pay that carrier and then you get a notice of assignment from RTS and they're like no, you owe us that money, like it just creates so many things you've got to work through, right? Okay, do I got to get the money back from them to send it to RTS? Why did we pay them? And again, these are minutes and hours of your day.

Speaker 3:

You're not moving freight, not talking to customers, not doing your core business, because you're dealing with paperwork on making sure the payment goes to either the carrier's factoring company or directly to the carrier and making sure that happens over and over again. So their database, right, houses all this. So if they've got NOAs on file for whatever carriers as soon as they're onboarded, I don't have to do any of that. So when I see the emails come from RTS or wherever and go, hey, here's our NOA, I just look back over at Hall Pay and I'm like, oh yeah, they're there.

Speaker 3:

That was already on file, it's good, I don't need to worry about it, move on.

Speaker 2:

I would like to just touch if there's any new brokers out there listening that if that scenario happens which it will happen, where you pay a carrier direct and then you get an invoice from a factoring company, don't ignore that invoice. Call the factoring company type in the load number If you're using Hall Pay and just find that load the proof of payment that you already paid the carrier direct and send it off to their factoring company and say hey, your carrier didn't tell me they were working with you. This is the first I'm hearing of it. I already paid them direct. I acknowledge your NOA. All future loads will be paid to them Correct, directly. Here's proof that I've already paid them for this load loan. Yes, if you ignore that email, you ignore that invoice, they're reporting you to the credit agencies. It only takes 60 days to knock your credit score down 20, 30 points or more.

Speaker 1:

So I wanted to talk about credit here as well. I think that's a great segue. So we'll find oftentimes brokers, when they're new, have a hard time getting carriers to work with them because the carrier's factor in company says no, says no. Yes, all right. So let's talk through that. Why is that and what can a new broker do to address that hurdle, that issue or that struggle when they're new?

Speaker 2:

It's one we see all the time. Regardless of how much experience I've seen guys that have 20, 30 years in the business and finally starting their own, their brand new career changes during COVID the struggle is real and it's equal for all sides, I believe, when it comes to getting carriers to work with you. The thing that's really important, I think, for brokers to remember is that the vast majority of factoring companies out there have what they call an exclusivity clause in their contract. The vast majority of factoring companies out there have what they call an exclusivity clause in their contract. This exclusivity clause requires the carrier or the broker to present every invoice that they process to the factoring company to purchase. It does not obligate the factor to purchase it, but they must present every invoice. They can't pick and choose which customers they want to work with, like Ben was describing here a little bit ago, because Hall Pay is not exclusive, but most factoring companies are.

Speaker 2:

Now, when the factoring company is exclusive, they're scaring the crud out of their carrier clients saying hey, if you take payment direct, you don't present it to us. We can fine you, we can do this X, y and Z and make your life very difficult, so you need to present everything to us and if we tell you, no, you better not work with them because they're not, I don't know exactly what they say, what I advise my carrier clients. If they call and we're declining credit, it's like, guys, we declined them for a reason. You're welcome to work with them, but there's a reason we declined them. We don't recommend it. We don't want to see with them direct. We'll give you an LOR and you can go work with them direct.

Speaker 1:

I mean this is kind of the same reason that we go back to our conversation about broker shipper vetting right Credit worthiness of the shipper. The same goes for hey, mr Mrs Carrier, fyi, we don't think you should haul for this broker because we don't feel that he or she is going to pay you Right.

Speaker 2:

I'm not going to put my money on it. But if you want to put yours on it, I don't want to lose you as a customer, but you have every right to do so. But not every factoring company will have that conversation with the carrier. They're just going to say, hey, we declined for credit, you shouldn't work with them. And when that happens, that's when you, as a broker, getting that call back from the carrier that just accepted your load 30 minutes ago and saying, hey, I'm sorry, I just talked to my factoring company. They said I can't work with you.

Speaker 3:

And then they say and then I always ask are you guys exclusive or non-exclusive? And they're like, yeah, we're exclusive, so we definitely can't and we can't jeopardize our entire company just to move one load. We're sorry.

Speaker 2:

Yeah, but what they don't realize, that they haven't read and I've read the vast majority of my competitions contracts out there is in that exclusivity clause if the factor declines, the carrier for credit. I'm sorry if the factory company declines the broker or the carrier's client for credit, they are legally obligated to provide that letter of release to the carrier so that the carrier can work with them direct. God, that, no, actually opens the door.

Speaker 1:

I mean, mean hypothetically, as a broker or a shipper, it doesn't matter it doesn't matter now.

Speaker 2:

But here's where it gets a little tricky and a lot of brokers will get caught up is if a carrier company owes their factor money. Maybe they got double paid, Maybe they took a fuel advance and didn't tell the factoring company and they have now what we call a negative reserve, meaning my carrier client owes me money.

Speaker 1:

no-transcript for any number of reasons.

Speaker 2:

Yeah, but the factoring company or, I'm sorry, the carrier company isn't going to usually tell the broker hey, I'm in rough sorts with my factoring company, I don't want you to pay them, I need you to pay me. They're just going to say no, I can't work with you. Factoring company says no Because they already know they're not getting the LOR, so they're not going to be upfront about it.

Speaker 1:

Okay. So let's say I'm a brand new broker and let's say I'm using Hall Pay as my factoring company. How do I get over this hurdle of I'm new? I don't have a credit history. What can I do to make a factoring company feel more comfortable that I'm going to pay my bills?

Speaker 2:

Well, there's a lot of different ways to go about it, um, and it's more of an art form than a science, but it is a definitely a lot of work. But, my, the first thing you really want to do is focus, in my opinion, on getting the carriers to work with you direct, because some factoring companies just aren't going to. I mean, there's some that you could spend hours on the phone. Keep calling them. Can you give me enough credit for one load, just one? Let me get started with you, let me start building stuff up, and some factoring companies will do that for you, others won't. It just depends on how much recourse versus non-recourse and what their risk tolerance is, and all that. But the oh, I had a point.

Speaker 1:

I'll add some colors you're thinking you want directly with carriers, right?

Speaker 2:

say that's exactly it. Be the sales, be a salesperson, be okay, mr Carrier, you have your factoring company says no, how much is your factoring company charge you? Oh, three percent. Would you run this load for me if I did it for free? Quick pay, just as one time, just to show you I'm a good guy and I know what I'm doing. I've been in the industry for 20 years, boss. I really understand where you're at. I understand why you're hesitant to work with me. I'm backed up by a factoring company, xyz. They're going to make sure that you get paid even before I do, if that happens. But you're going to get paid and I'll even quick pay you for free on your first load. You run with me if you'll give me a shot.

Speaker 1:

Yeah, and is like we've got the question a million times, like there's like I love how, steve, I love how you said it's more of an art form than a science. Because, ben, we, we've answered all the time like there's no magic pill you take to get your credit to work. You have to sell yourself to, sometimes a factoring company, as steve alluded, but more so a carrier right. And if you're, let's say, you have worked in the industry for I don't know five years inside of your own shop, well, you definitely know some carriers right and they're going to give you some credibility and very likely work with you because they have a rapport with you, they've known you for years, et cetera. And that's, I think, where your starting point is. And the reality is it is going to be a struggle as you start off and you're going to oftentimes have to offer that free quick pay.

Speaker 1:

I've heard this story from probably half a dozen to a dozen folks that have started a brokerage in the last five years and have gone through this. Their answer was I had to get on the phone and talk to people. I had to give quick pays for free on every single load for a few months. I had to do it the old school way. There is no magic bullet. It doesn't matter how much money you have in the bank or any of that. You've got to do something to prove your worthiness, because the actions speak louder than words. Ultimately, and until you can show someone I'm paying my bills on time, it doesn't, you know. It doesn't mean anything to a factoring company or some of them on the phone.

Speaker 3:

So here's some of the things I found that are helpful working through that right One is if you're upfront about it, you tend to not set off as many red flags and the carrier tends to work with you a little more. And here's what I mean by that. Like I was literally doing these phone calls Right and I'm like okay, like when I try to sell the load the way you normally would, go through the details, negotiate the rate, right, and you get to the point where they're good on it and then they go check and they come back to you and go you're not approved. Like they're already frustrated and they I think they also kind of feel misled. So now they're not nearly as helpful because now they wasted. This time they call their factoring company. They probably knew that. You knew this because you've only been in business a couple of months. They're frustrated, they just want to go take another load. They wasted 15 minutes.

Speaker 3:

So what I started to do was like if the driver and the details worked with the equipment right first, to just make sure it was worth having the conversation and we get that far. I'm immediately bringing this up. Hey, do me a favor, can you tell me, do you guys factor. Who do you use? I'm letting you know that, like hey, we've been in business you know this many months. We're well-funded, we work with these customers for a while, but I know we're working to establish our credit. Can you just check real quick to see if we're on your approved list? Now they come back and they go oh, hey, yeah, you aren't.

Speaker 3:

My next question is always like hey, are you exclusive or non-exclusive, meaning like, do you guys get paid directly from some of your brokers or does everything get factored? And then from that question, like if they're exclusive, I usually ask like, hey, would you mind sending me over your point of contact at your factoring company? Right, I'd love to be able to reach out to them. Now, if you've got a load picking up in an hour or two, you're never getting this done in that amount of time. So the other thing to keep in mind is you want to start talking to carriers about loads you might have as far in advance as possible, because if you get a load next week, this is feasible. If you get a load in three hours, it is not feasible. So the next thing I would do is like, okay, if I'm running this load or lane every week and even if I can't get them on the load today, I'm going to have my team work to get it covered and then I'm going to go spend that afternoon and I'm going to call the factoring company and have the conversation we're talking about hey, this is our situation.

Speaker 3:

What options are available? Would really like to be able to work with your client and the rest of your carriers. What can we do? Some have told me like, hey, we'll approve you for one load, we'll see how it goes and then we can go from there. Some have said, hey, we're backed by RTS and you got to be in business 10 months to a year before you're ever going to get approval, and those scenarios it's sometimes has worked and we're like okay, can we prepay you? Like, this is a $4,000 load. If we deposit five grand in your account today, why are you that money? Can we work with that carrier next week? Some have said they would. The larger ones almost do not take deposits at all anymore OTR, triumph, rts. I've been trying to work through those for months.

Speaker 2:

Yeah, they have a very defined client.

Speaker 1:

It's a bank, a very ideal defined client base, and it's not new brokers.

Speaker 3:

Again, and a lot of the smaller factoring companies. You might not recognize the name, but they're backed by the larger ones. Right so like. Even though you're looking at silver Fox factoring, when you see their approval list and you, they send you over their documentation.

Speaker 1:

It says RTS on it and you're like oh, are they almost like an agency or like a sub branch of those, like a spinoff? It's a question I want to ask each other.

Speaker 2:

Oh, it's a question I want to ask Steve. Yeah, I mean, I don't know I see it all the time, because we manage a whole bunch of factoring company profiles and as they just buy each other up a lot of times, they'll keep their business books in those old offices. But they'll change the name, but they'll still manage the books in the different offices differently.

Speaker 1:

Interesting. I didn't know that.

Speaker 2:

Yeah, it's just like every other part of their industry. It's just you know it's starting to consolidate.

Speaker 3:

I have a question too.

Speaker 2:

There's still a lot of little guys out there too. Go ahead.

Speaker 3:

Here's the thing that I still don't really understand. So if I'm a client of yours and we're non-recourse and what that means again for the audience is, no matter whether my customer pays me, no matter what I do, if Nate's my carrier, you're paying him because you verified his account number, his BOL or POD proof of delivery. He's getting paid. Why in the world are other factoring companies not willing to work with a brokerage that has a relationship with you? Because they're insulated from the credit risk? Nothing I do is going to change the fact that you're going to pay Nate's trucking company for the work he performed. Why won't RTS work with a new broker? If they are running everything through you, why aren't? Isn't there just a one page agreement that, like, hey, every load you run with our carriers has to go through Hall Pay, because we know, regardless of whether the customer pays the bill, what the broker does, that truck gets paid. What's?

Speaker 2:

the risk. Unfortunately, the risk is the fact that we don't base our credit scores or our credit decisions on our customers, but on their clients. Going back to the beginning of our conversation, the risk has been you, as a broker on my platform, can sell a load to a carrier that's working with RTS, with an approved debtor or a declined debtor.

Speaker 2:

That's true so if you're working with a declined debtor and you're going to do it as a non-factored funding request, where we just do the invoicing but the carrier doesn't get paid until the broker your customer pays the invoice.

Speaker 2:

I can't guarantee that you're going to pay that load. I also can't force you to approve the load then so you could have all the paperwork in there and then just walk away for two weeks and not do any paperwork and leave that load unapproved in the platform. I don't have the authority to go in there and approve the load for you. I can't force you to do that. I can give you all the tools, but I can't force you to approve anything.

Speaker 3:

So here's a question, though If this is such a huge need in the industry right and it's mostly, I think, why it's gotten even worse is because of fraud in these things, right why is there not a mechanism that, as a new broker, I give up the ability to prove it after a certain amount of days. If the paperwork's there, I give up my ability to non-factor it for that period of time and I waive my rights to not approve or not unfactor it. So it only goes through that direct pipeline where I can't control. Once that carrier has done what they're supposed to, that goes in there. That document is verified by you guys. Why can't that, something like that, be facilitated?

Speaker 2:

I don't know, that's a neat idea. I mean you and I have talked about a little bit in the past and other conversations. I think there's definitely room for that and that's something that our technology could maybe address. At some point down the road. Maybe we have a verified transaction stamp on certain transactions of our broker clients. That could you know. Hey, mr Carrier, if you see this, or Mr Factoring Company, if you see this, you can guarantee that this load's going to be approved because they're working with an approved shipper.

Speaker 3:

Yep.

Speaker 2:

Right, but at the same time there's risk and reward with that as well, because then if you're a broker that's working with mainly declined debtors, you don't want to necessarily be advertising that. So you know there's. Our big thing has always been since the very beginning of the days when Steve Cochin founded the company was, you know, democratizing the industry and kind of basically leveling the playing field so that every broker, regardless of your size or resources, has access to the same number of tools and resources of the big brokers. And I think that's really where we're focusing on how you utilize those to make yourself successful. That's kind of the art form that each individual client gets to pick and choose from.

Speaker 1:

So let me ask this kind of as a um to, to kind of get to the end of the conversation here. I know we're kind of getting up against the clock, is um? So obviously we've talked about hall pay. We'll, we'll, we'll throw a link in the uh description box or show notes to reach out to you guys. Um, some of the red flags, things to look out for. We've already talked recourse, non-recourse, contract language, but there's these. Clearly there's bad actor factory companies that are associated with fraudulent brokerage rings. That's an extreme. But what are the things to be looking out for? What differentiates different factoring companies if I'm looking to select one over the other?

Speaker 2:

As your factoring company.

Speaker 1:

No, if I'm a new broker and I'm considering going the factoring route instead of maybe a line of credit or cash flow.

Speaker 2:

Yeah, the things that I'd be looking at are a few things. The big one is the termination fees or associations or the contract length. I've seen termination fees in excess of $3,000 to $5,000. I've seen contract terms over 24 months with no ability to get out of them. Those are things that you want to be careful with Looking to see what the penalties are. Is it truly a debt-free type of financing that Hall Pay offers, or are there strings attached? If they're saying they're non-recourse, how long is it truly non-recourse and what are those fees? If you see little things in asterisks that say fees, this is a model and actual fees could be substantially higher. That's a red flag to look for in a contract. I've seen that on a number of these A few of our competitors in recent history. I don't know if this is going to stop now that rates are starting to come down a little bit, but I've seen their discount rates being tied to the prime rate. So if prime goes up, your rate goes up. Prime goes down, your rate stays.

Speaker 2:

So, it's an adjustable rate on a factoring contract with a two year contract term that you can't get out of.

Speaker 2:

I mean there's some crazy stuff out there, so you know there's some. And there's like termination clauses like how soon do you have to give notice? I've seen contracts where it's a two year contract. You have to give notice no sooner than 90 days before the contract term ends, but no earlier than 180 days before the contract term ends. They give you a 30-day window in there, or a 60-day window to give notice three months before your contract's up, and if you miss that window you're auto-renewed for another period. So the things to. Really it surprises me all the time how few people actually read their contracts when they're signing up for these things. But when you're signing up for a factoring agreement, regardless of who you're going with, just you're entering into a financial obligation with another financial institution. Make sure you're reading your contract and asking questions.

Speaker 1:

It's the same thing. We talk about this with customer contracts. People just sign stuff away. They're being, they're brokering. This is not really into factoring, but it goes to speak to the attention to detail. People will, as a freight broker, sign a customer contract that blatantly calls them a motor carrier.

Speaker 3:

I have one on my desk. It requires them to have certain insurance that they cannot have as a non-asset-based brokerage. I have a call this afternoon, whether it's for a customer or a factoring company that you're looking to do business with, or whatever.

Speaker 2:

Yeah. So, yeah, I'd say those are important things. On the credit point thing, nate, one thing I don't think we touched on much, but just keep in mind, folks, that there's more to your credit than just your score. It's the number of companies reporting on you, it's your average days to pay and your monthly balance.

Speaker 3:

Talk through that real quick, because the 21 day thing we get asked that a lot. Can you explain the thing? I want to preface this with right so for DAT, in order for your credit to show which is really important for carriers to be able to see it, because otherwise they don't call you and they won't work with you so in order for you to do that, you need to have a credit score established by Ansonia and per their website and per DATs it says I think you need two debtors each month for three consecutive months. But then it has weird language that says like don't include the current month, so like it could be four months, but you could define it as five is kind of the way it reads, it's going to probably change next month, right?

Speaker 3:

What needs to happen to actually hit that benchmark, because that's a really important one for brokers, because that's what opens up the market. So, like, what do they need to do to establish this credit?

Speaker 2:

Get as many companies reporting on your credit as possible and as many of your transactions reported as possible. Think about it your credit as possible and as many of your transactions reported as possible. Think about it If you're a small broker or a small, medium-sized business, are you taking time every time a vendor pays you on time to report their on-time payments? The answer is no for the vast majority of us, right? So, working with a financial institution like Hall Pay or another factoring company, we're going to report every time you pay a carrier. We're reporting that to the major credit bureaus on your behalf automatically.

Speaker 2:

We're also reporting on your customers that pay us. We're monitoring your customer's credit every month to look for signs of financial distress so that if they are going to go out of business, right, like what was the big one this year, the big digital guy that went down Convoy, right, we saw that come in three. We lost a little bit, but we didn't lose much because our algorithm caught it three months before it happened. So we started winding it down a little bit. So we are monitoring for that for you. So that's another additional protection that you get working with a good factoring company that's monitoring your customer's credit.

Speaker 3:

The days, the days. How many days is a sweet spot? Yeah?

Speaker 2:

So you want to be paying under 30 days. You want to have as many companies reporting as possible. The thing that throws a lot of people off is they're like, hey well, this broker on date dad has a 95 credit score. Why are you declining them? But what they don't see behind the scenes is there's only one company reporting, or two companies reporting. They only have $500 a month being reported on them. If our algorithm says 10% of your average monthly volume being reported is your credit line, I don't think many of my customers are going to be happy with a $5 credit line, so we're probably going to decline them based off of that. So just having a good credit score does not mean that you have good business credit.

Speaker 3:

And then quick pay right, the sweet spot, because I think we talked that like if you pay a carrier in like one day, three days or five days or even seven, like it doesn't necessarily get reported.

Speaker 2:

Not always, cause we can report as much data as we want to the credit agencies on your behalf, but we can't control how they ingest that data.

Speaker 3:

And if they don't show a?

Speaker 2:

balance open, then it doesn't show.

Speaker 1:

So I'm a if I'm a broker and I'm using a hall pay as my factoring company and Hall Pay is paying my carrier for me. That makes my credit score. That improves my credit when you're the one paying 100%. Okay.

Speaker 2:

Remember that guy that I told you earlier in the year that had his $100,000 stuck to him? Yes, when he came on board with me now granted, he'd been in business for since 1983, 84. He had a long history of credit built up. That was relatively positive credit history, but when he came on board he had like a 45 or a 50 credit score. After about 10 transactions and two and a half months he was up to a 95 again.

Speaker 1:

Wow. So, ben, here's the actual verbiage from Ansonia and DAT. After two different data contributors have reported your payments for three consecutive months, current month excluded, on the fourth month, your brokerage will be eligible to receive a credit score. Takes a long time. Yes, that's the minimum, and that's the minimum.

Speaker 3:

And it's consecutive months.

Speaker 2:

So if you have one month in there and nobody reported on you you start over, start back over.

Speaker 3:

And the other thing, too, I think is helpful for anyone trying to think about this. I'm like the way I explained it to clients is I'm like, okay, like, think about a credit card. Like your credit card does not give you a higher line of credit if you use it all month and pay the balance off before the end of the month Because, like you're, they're're not, they're not seeing your ability to actually manage debt. They just see you use it as a transaction and pay it off. So, like, if you pay that off before the balance carries, like your credit limits don't go up because, like they don't know if you can actually manage paying debt, which is the risk, right from a lender. So, like from a company's perspective, right. Like that's why, if you paid all your carriers inside of a week, like it's not really showing your ability as a company to kind of manage debt because, like you're not keeping balances.

Speaker 3:

Again, it's like counterintuitive, like as a consumer, like oh wait, so I got to spend money on my credit card and pay a minimum payment to like get my credit up, and this shitty answer is yes, like you have to pay the interest fees for like six months. Pay it like half the balance or the minimum. Hold that balance in that credit card for months to get higher lines of credit. And the ironic thing is like I'm doing this now Like we just purchased a home and I haven't used debt in like I don't know 10 or 15 years. So like, even with my income and no outstanding debt, like I'm getting credit limits for two grand. I'm like that doesn't even buy me a front door. I need to put windows in the house. So I'm literally doing this exact same thing with myself again because I haven't used credit since I was in my 20s. But it's the same thing for a business Interesting.

Speaker 1:

Anything else on factoring, this is a good long discussion on it and we could definitely go on episode 2.0 and dig deeper into the wheeze. But anything. Steve, anything you want to add in towards the end here, if you've got any interest in learning more about us.

Speaker 2:

Check us out at hallpayio and we'd be more than happy to talk to you and see what we can do to work with you. I will, yeah, I'm going to make a note of that.

Speaker 1:

Hallpayio. Let's see Hallpayio, We'll put in the show notes for all you guys out there. But yeah, thanks for coming on. We appreciate it. We take our guest selection serious. We want subject matter experts who can add value and who have done just that. So thank you, Steve Ben. Any final thoughts here?

Speaker 3:

Whether you believe you can or believe you can't, you're right and until next time, don't get your ass whooped.

Speaker 1:

Buffalo Go Bills.

People on this episode

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Benjamin Kowalski

Co-host
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Nate Cross

Co-host