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How to Switch Factoring Companies by Getting a Buyout

There is no shortage of reasons a freight carrier might want to move on from a factoring company—high rates and fees, poor customer service, slow or late payments, outdated technology, and more. But while getting out of a factoring contract may seem like a daunting task, it doesn’t have to be complicated. Just follow these simple steps…

Step 1: Assess your situation

Look over your existing factoring contract for relevant info like rates, terms, fees, and your contract end date.

Step 2: Find a better factor 

There are plenty of factoring companies out there, but unfortunately a lot of them don’t post their rates and fees publicly. Keep searching until you find some that do. Then ensure they specialize in freight factoring, offer industry-leading rates and fees, don’t require lengthy contracts, and provide automated invoicing, clear terms, and instant access to funds. These are all features that should be considered standard by any modern factoring company. 

Step 3: Ask questions and apply

Once you find a better factoring company, reach out to them and have them look over the contract with your current factor. Be sure to come with specific questions about how they differ from your current factor. Then after they review the contract, you’ll receive their anticipated pricing and you can choose whether to formally apply. If you do, and you’re approved, then your new factor will reach out to you when you get closer to the Contract Notice Start Date.

Step 4:  Start the buyout

When you’re ready, your new factor will obtain the final aging report from your existing factor, which shows all the unpaid invoices you have with them. Then a buyout agreement will be sent for all parties to sign and your new factor will wire payment to your existing factor for all invoices. Once completed, you’ll soon be able to begin factoring with your new factoring partner.

‍What possible benefits could you get by switching factoring companies?

  • Better rates and lower fees
  • Improved customer service
  • Faster invoice funding and payments
  • Risk protection with non-recourse
  • User-friendly platform that saves time

Considering making a switch? You can talk to an Outgo Buyout Specialist today for more information about how to make it happen.

Call us at +1 (888) 308-8810

Learn more at Outgo.com

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