Selecting a factoring service is a daunting, but necessary task for freight brokers who need financing options. Not all factoring companies are created equal. Brokers need to know the right questions to ask when evaluating freight factoring services. And they need to understand the implications to ensure a beneficial partnership. Factors such as contract terms, fees, funding options, credit checks, and customer service are necessary to dig into before committing to a service.
Understanding these questions can help freight brokers make informed decisions and avoid any unpleasant surprises or hidden costs down the road. It also helps ensure a healthy, long-term relationship with the factoring company. It's crucial for every freight broker to know the essential questions to ask their factoring company. Failure to do so may result in being left in the dust by other, more informed brokers.
Do you have a webapp/user portal where I can view and manage my payments, or do I have to call in and talk to an account rep every time?
Yes! Your Denim Freight Payment System portal is available on any browser using your laptop, pc, or phone - 24/7, 365.
What are the 3 key benefits I will get from your service?
- Time - Automations built specifically to simplify a freight broker’s day-to-day.
- Transparency - Full visibility to your financial transactions, and clear communication for your customers and carriers when collecting invoices and making payments.
- Ease of Use - An essential piece of a modern freight broker tech stack, designed from the ground up with the freight broker in mind.
Are you a recourse or non-recourse factoring company? What if a shipper fails to pay or files for bankruptcy?
We are a recourse-based company, and will handle your collections for 120 days. If we fail to collect from your customer (shipper) you will get a chargeback on day 90. The biggest way we protect your company while also protecting ourselves is by offering unlimited free credit checks - which must run credit before we approve a new customer of yours on the platform. In the event a customer of yours is denied, we provide a full transparency report on why. You are still more than welcome to run the load at your own risk, we just won't finance it.
What is your factoring rate?
Our factoring rate is as low as 1% for accounts that qualify. To qualify for lower rates, your freight brokerage must meet certain thresholds in volume and or value of monthly factoring with Denim. For new brokers, our rate starts at 2.95%
How long does your 'quick pay' take to issue payment to carriers/truckers?
We offer 24-48 hr QuickPay. If you upload an invoice on our dashboard by 12:00pm EST the payment is guaranteed the following business day.
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Is there a minimum volume requirement?
No, Denim has no minimum monthly requirements. No monthly fees. No setup fees. No QuickPay fees. No ACH deposit fees.
Is there a minimum factoring fee per invoice?
No, there is no minimum factoring fee per invoice. You can upload a $200 invoice, a $2,000 invoice, or a $20,000 invoice all through the same system.
What is the minimum contract duration with your factoring company? Do you have a month-to-month option?
Our standard agreement is on a month-to-month basis.
Is there a termination fee?
We charge an administrative fee of $250 regardless of the amount of invoices you submit, to cover the costs of UCC filings and account setup. If you are submitting $1,000 of invoices a month or $100,000, the fee will remain $250.
What is the termination notice period?
As we are month to month, you are free to terminate at anytime. We recommend planning a 30-day buffer period to ensure there are no outstanding or pending jobs on your dashboard.
What is the ACH transaction fee?
We do not charge any ACH deposit fees. This is a free service for Denim users.
What is the daily cut off time for funding?
Invoices submitted by 12:00pm EST are guaranteed a next business day payment. Denim’s Quick Pay is between 1-2 business days.
What TMS programs is your company integrated with?
We offer direct integrations with AscendTMS, EZloader, Turvo, EKA, Zuum, Logistically, and TAI TMS.
If there is a particular TMS you love working with feel free to let us know and we’ll work with you to build the integration.
Do you complete a credit check process for shippers? If so, is there a credit check fee?
Yes, we offer unlimited free credit checks for your shippers. No fees ever. This is part of our robust customer validation support and services helping to protect our businesses from fraud.
Are there any hidden fees or charges?
No hidden fees and No additional charges for any of the features listed in any of the plans.
Do you provide back-office automation and assistance?
Denim’s broker-first design makes day-to-day operations more efficient. Reduce incoming calls by providing carrier transparency with automated payment notifications.
Our TMS and QuickBooks integrations reduce time spent on tedious back-office activities, freeing up staff to focus more on customer & carrier relationships.
Do we get a dedicated account manager?
Yes, every Denim customer is partnered with a dedicated account manager who will walk you through the dashboard, answer any questions, and even help you upload your first invoice to prevent any payment delays.
Does Denim (or its subsidiaries) own any trucks? What about a freight brokerage license or motor carrier license?
No. We are dedicated to providing customers with new and innovative technology that advances their business operations through automation and smart decision-making.
Do you provide fuel advances for carriers?
No.
Do you provide EFS payment services?
No
What happens with lumper fees?
The lumper fee is reimbursable to the driver by the carrier or broker.
When will I see a copy of your notice of assignment and factoring contract?
These will both be included in a sample contract you will receive from an Account Executive during your registration process.
What happens if a carrier's payment is more than what Denim will advance?
We will always make sure your carrier gets paid in full first. Denim cannot factor a job if the contracted carrier price exceeds the total load value, minus the fee based upon your factoring rate.
For example:
You are a Denim client with a factoring rate of 1.3% (you savvy negotiator you). You have a $10,000 load that needs to go from Dallas to Chattanooga. And you find a carrier that agrees to take the load for $9,500.
Denim will advance your carrier the full payment of $9,500 when you factor the load through our Freight Payment System. This leaves you with $500. At a 1.3% factoring rate, the cost to factor this load is $130. Remember - cost to factor the load is calculated based on the total load value.
After Denim receives the collections from your shipper, we take our fee of $130, and pass along the remaining $370 to you. This is your $370 profit, which is released on the subsequent Friday after the collection was made from the shipper.
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