Factoring

Factoring

Transition to TruckSmarter Factoring with a Buyout

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TruckSmarter provides buyouts so that carriers can easily transition to TruckSmarter Factoring with minimal disruption to their current factoring contract. This article explains in detail how to complete the buyout process. Read on to learn more!

What is a buyout? 

โœ… 1. Determine when you're eligible

โŒ 2. Submit your cancellation notice

๐Ÿ“… 3. Date of eligibility

๐Ÿ”Ž 4. Invoice review process

โœ๏ธ 5. Signing the buyout agreement 

๐Ÿ’ธ 6. Wiring funds and receiving the release

๐ŸŽ‰ 7. Transition complete!

Need help?

 

What is a buyout? 

A buyout refers to the process in which a new factoring company settles the outstanding balance that a carrier owes to their current factoring company, and the new factoring company will collect payments directly from the brokers. Factoring companies have two requirements to fully release a client:

1. The client's contract has ended and the client has provided proper advance cancellation notice

2. The client's outstanding balance is zero (all factored invoices have been repaid to the factoring company)

Even if you've sent a cancellation notice to your current factoring company and your contract has ended, you will not receive a Letter of Release (LOR) until your balance is paid off.

๐Ÿ†“ TruckSmarter does not charge any fees for performing a buyout. We are happy to provide this service to help eligible carriers switch to our factoring service.

 

โœ… 1. Determine when you're eligible

Confirm the date your existing factoring contract ends and how far in advance you have to give cancellation notice. Once you've confirmed the date you'll be eligible, please inform TruckSmarter Factoring. There are two common types of contracts โ€” you should identify which one applies to you:

Standard Contracts: Most factoring companies have a specific date your factoring contracts ends. Typically, they automatically renew the contract if you do not provide written notice of your intention to cancel. You must confirm the date your contract ends and how far in advance you need to provide notice of cancellation to avoid an auto-renewal. If you provide proper cancellation notice you'll be eligible to switch to TruckSmarter Factoring on the date your contract ends.

Flexible Contracts: Other companies offer flexible agreements. You need to provide cancellation notice (typically 30 days) before they will allow you to switch to a new factoring company, but you can provide this notice at any time. Once you provide notice, you'll be eligible for a buyout at the end of the waiting period. 

If you need help determining when your contract ends and your current factoring company's cancellation policy, please contact us.

 

โŒ 2. Submit your cancellation notice

Once you've determined your current factoring company's cancellation policy, you must email them directly with your intention to cancel and initiate a buyout from a new factoring company. Make sure you get a confirmation from your current factoring company that your notice has been accepted. Please forward their confirmation directly to factoring@trucksmarter.com.

๐Ÿ’ต Please note that YOU CAN keep factoring during the cancellation notice period until the buyout start date!

 

๐Ÿ“… 3. Date of eligibility

On the date you are eligible for the buyout, TruckSmarter Factoring will contact your current factoring company to request a final copy of the outstanding balance owed to them and start the transition process. On this date, we will ask that you complete the TruckSmarter Factoring application so that your account is ready as soon as we complete the transition.

๐Ÿ›‘ You WILL NOT be able to factor invoices until the buyout is complete (~2-4 days). Any loads you have delivered during this time period will be factored immediately upon completion of the buyout.

 

๐Ÿ”Ž 4. Invoice review process

TruckSmarter will reach out to the brokers that owe your current factoring company money. We will verify the invoice payment dates and check for any issues that would prevent payment. If any rate discrepancies or paperwork issues are found, we will contact you to get them resolved.

๐Ÿ•“ Time saving tip: If you can obtain a copy of your aging report in advance, email it to TruckSmarter Factoring a week prior to the buyout eligibility date to speed up the buyout process.

 

โœ๏ธ 5. Signing the buyout agreement 

After the aging review is complete, we will sign your buyout agreement and send you a copy to digitally sign via DocuSign. Once complete, we will send the buyout agreement to your current factoring company and await their countersignature. 

 

๐Ÿ’ธ 6. Wiring funds and receiving the release

Once the buyout agreement is signed by all three parties, TruckSmarter will wire transfer the buyout funds to your current factoring company. They will send TruckSmarter an official Letter of Release (LOR) after they confirm receipt of the wire transfer.

 

๐ŸŽ‰ 7. Transition complete!

Upon receipt of your Letter of Release (LOR), your TruckSmarter Factoring account will become active. You will be able to immediately submit invoices you've been holding during the transition. TruckSmarter will be responsible for sending your new Notice of Assignment (NOA) and the Letter of Release (LOR) to any brokers that were involved in the buyout. 

 

Need help?

TruckSmarter is available Mondayโ€“Friday, 8:30amโ€“5:00pm CT. For requests outside of these hours, please either submit a request through the TruckSmarter app or send a message to one of the following:

Phone/Text Message: +1 (207) 309-3397

Email: factoring@trucksmarter.com