The Truth About (Some) Factoring Companies

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Tyler Allison: You're listening to the Bold Plugged podcast. Your number one resource for everything Bold Freight Trucking. Tyler Allison: Hey, guys. Welcome to the bulk loads podcast. Jared is out once again. We got Larry Heard in here. How's it going guys? Larry Hurt : I Larry Hurt : think I'm a little rusty. I don't think I've ever done that. Tyler Allison: Yeah. You haven't done an insurance pod in a while. It's been a minute. It's been busy for you. You've been running around all over the place. Larry Hurt : It's been busy. Yeah. I mean, we're rolling, you rolled out the permitting, got some other projects we're working on. So it's been, you Tyler Allison: know, been heavily involved with, yeah, all the entities, just getting those Larry Hurt : been a whirlwind. Tyler Allison: Up and rolling. Yeah. We thought after the conference, things were going to slow down, but it seems like it was the opposite. Like things are just moving quick, which is always a good thing. Larry Hurt : I can't believe the conference was a month ago already. It's like we've already talked about planning next year's and Tyler Allison: It's about time to start Yeah. Rolling out next year's agenda and trying to line all that out. Larry Hurt : Yeah. We went rolled the permitting out, had the conference. We're We're gonna be rolling out more services down the road and planning for the next conference. It's been crazy. Tyler Allison: Probably need to schedule out another episode with Jared of you, of you guys just diving into kind of the roadmap going forward. Larry Hurt : Oh my gosh. Tyler Allison: Just because, yeah, like you said, we have a lot planned. But I'm excited about today's episode. Before we get into it, we're going to do another truck feature. We have Greg Holtgrave with GH Hauling out of Bridgeton, Missouri. Greg has been a member since 2021, and Joe will throw the picture up there. But, man, I kinda like this picture. It's in the shop. All his rigs all clean. Tyler Allison: It's a blue so sharp. Yeah. Day cab going on with the end dump. I have a feeling that we're gonna feature a lot of end dumps. Larry Hurt : Yeah. I mean, the shiny end dumps are, I mean, they're beautiful. Yeah. Yeah. I like the blue too. It's good contrast. Tyler Allison: Yeah. Well, thanks, Greg, for submitting that photo. As always, guys, send us your rigs. We will, feature them on the podcast moving forward and on social media. Today, we're going to bring on Sarah Hansen with Smart Freight Funding. She is the credit manager up there. She's been with Smart Freight for eight and a half years. Larry, you just got back from Smart Freight. Larry Hurt : Yeah. I was in Omaha last week, and, I can't, yeah, it, it was a great trip. Some of the stuff that the girls up there are rolling out is impressive. We're getting better on every business unit, but smart freight, like, first of all, I sat with Sarah, I've known Sarah now for a couple years. She's a stud. Yeah. I mean, she, she knows her stuff. She's kind of, she's kind of that intermediary between, you know, the, the, the proof shippers and the carriers. Larry Hurt : But she's, she's a wealth of knowledge and it's, it's always refreshing to sit with somebody that knows the ins and outs. Yeah. She's definitely that person. Yeah. Tyler Allison: I think it was a good move. Jared bringing her on just to go over. They're going to talk about the, basically, predator factoring companies and just my gosh. The past couple years I've been here, just hearing the horror stories of just guys getting taken advantage of, carriers especially just getting raked over with these factoring companies getting locked into contracts and just I it's insane. Like, it honestly breaks your heart, really. Larry Hurt : I when I, when I was sitting with Sarah, she was actually showing me emails where carriers had wanted to move away from smart freight, and she said, hey, send me the contract. Just let me review it. If you decide to leave, it is what it is. Yeah. After reviewing the contract and her just saying, hey, here's what you're getting yourself into. I just want you to know it's your call. You make the decision, but here's what they're expecting. And she just goes out and highlights it. Larry Hurt : And you're just like, if you're not an attorney, first of all, that's a hard contract to read. Like I had a hard time keeping up with it and then, and she just listed out and it's just like, oh, woah, I didn't see these hidden fees here. And they'll, I'm sure they'll get into it on the podcast, but I was shocked. I was like, it it is like you said, it's predatory. Tyler Allison: Yeah. It's crazy. Well, yeah, we won't get dive too big into it. Sarah goes over everything in the podcast. We'll let her speak on it. But, yeah, it's just crazy. Man, it's it's really sad, honestly. But she will talk about all the factoring and she'll also go into what separates Smart Freight out from these other factoring companies. Tyler Allison: So without further ado, here is Sarah Hansen with Smart Freight Funding. Jared Flinn: Sarah, thanks for finally agreeing to be on the Bulkloads podcast. A little nerve wracking. I know. Well, hopefully, I can make this comforting for you. Thanks. You. I wanted to have you on, especially for our audience to listen to because I'll say this. You've been extremely valuable for smart freight funding on an organization. Jared Flinn: Yeah. And you Thank you. Yeah. You've taken the you started as a funder, I think, but move your way as our credit manager. Yes. And you've done a phenomenal job over the last how many years now as credit managers? Sarah Hansen: 8a half. Jared Flinn: Yeah. I was gonna say I was like 6 to something. Sarah Hansen: Yeah. Jared Flinn: But, yeah. Like and that you've heard me say this over the years. Mom, I tell our audience, like like, you have one of the most crucial roles managing, you know, our AR and making sure that we are you know, when we're buying receivables and extending credit to people that we're extending your right amount of credit. Yes. But that's not the reason we're gonna have you on here to talk about we're actually gonna talk about over the years, we've seen for lack of better, it's like I don't wanna name names or any names, but bad practices when it comes to factoring. Jared Flinn: Yes. Jared Flinn: And we're not against other factoring companies, but we wanna make sure our clients, more importantly, know what they're signing up for. Because I think sometimes just like other signing up for a credit card or signing up for something, sometimes you don't read the fine print. Sarah Hansen: Yes. And that is extremely important. Some of these contracts, I mean, they're in the smallest 8 point font you could find, and nobody wants to read through 12 pages of stuff, but you have to. Like, most of these other companies will lock you into a term of time, whether it's 6 months, a year, 2 years. And then at your renewal date, if you don't tell them you want out or something like that, it auto renews for an entire another year, and they're locked in for that year. So, some of them have different things where a buyout could be processed and we could, pick up the open AR that the carrier has, But a lot of them have a early termination fee. I've seen them anywhere from $500 to $5,000. There's quite a few that are 25100 range. Sarah Hansen: So there's just things that you really have to be careful with. Smart Freight doesn't have a contract. We do have an application. It does have legal mumbo jumbo, but you're not locked into a term of time. Jared Flinn: Yeah. So that's when when we kind of pioneered smart freight back in 2014, that was one thing when we got together, myself, Rachel, Matt, we talked about, hey. How do we make this better for the carrier? But more important than, like, my my listeners know this. I hate contracts. Like, I know that their their contracts are important for certain things. Sarah Hansen: Right. Jared Flinn: But for, like, I don't like being in that contract where if I'm not satisfied with the service, I'm still I can't leave. I'm stuck, you know, and, like, per examples that you think about, like, a cell phone, you know, if you sign up for a 2 year contract and you get bad Sarah Hansen: for No service anywhere? No Jared Flinn: service. Yeah. And then you're stuck with this contract trying to buy out. But it's the same a lot of factory companies have adopted this model. Number 1, that you have to sign a certain contract to be in there. And then I think the other thing too is a a large penalty for those contracts. So that was one thing that we said that we are not gonna have contracts. We wanna earn people's business. Jared Flinn: We want truckers to be able to factor and enjoy the process. Yes. We know in invoicing or collecting freight, it's not the most glamorous process, but it's essential to businesses. For sure. So we have to provide that. But let's I mean, you kinda briefed on, but I wanna kind of really bullet point these out a little bit closer just so our audience really kind of understands. You know, smart freight, We we do usually anywhere from 3 to 5%. It just depends on and sometimes we can, you know, percentage on that. Jared Flinn: But one thing that makes us unique or different, we don't hold any reserves. Sarah Hansen: That is correct. Jared Flinn: But talk so talk about what that means, what other companies do. Sarah Hansen: So smart freight stan starts most of our carrier I mean, the standard rate for us is 3%. So that means you're getting 97% tomorrow. Another factoring company might come at you and say, we have a 1% rate, but they didn't tell you that they're holding another 4% or another 3% in a reserve until they get paid. So, technically, you would only be getting paid 96% if it was a 4%, 95%. And they hold that until they get paid, which as we all know, could be 30, 60, 90 days later. And by that time, have you even remembered that that money is due to you? I feel like some of some of the guys probably get cheated not knowing not being able to keep track of what's still due to them. Yeah. So, I mean, the reserve is a huge thing for us. Sarah Hansen: Our 3% is 3%, period. Like, we're taking that off the top. You're getting the 97% tomorrow. Jared Flinn: So that's number 1. Make sure you you read the fine print about if there are reserves that get held because sometimes that can be that can add up to a lot. Even if, you know, say they're gonna factor at 1%, but then hold a 2 or 3% reserve or more Yeah. Like, that's a lot of percentage that they're holding for 30 day they're holding your money for up to 30 days at the that you can do the math on today's interest rates. Sarah Hansen: And then hope that's a lot. Hope that they're honest and turn around and give you that at that 30 Sarah Hansen: to Sarah Hansen: 60 days that you're not having to ask for it or check back on it. Sarah Hansen: Yeah. Jared Flinn: I think that's one thing too. We never, like, we never thought of our reserves to begin with. But number 2, like, we thought it's an accounting nightmare Sarah Hansen: It is a Trying to keep track. Jared Flinn: Like, even for the factory company. So how's it gonna be for the carrier Sarah Hansen: For sure. Jared Flinn: To keep track of Sarah Hansen: It's it's easy for a guy that runs a consistent lane for one company. That would be pretty easy. But, a majority of our carriers haul any kind and every kind of freight from bulk, that's what we specialize in, to freight or to reefer to van, to box trucks, to flatbeds. And so when they run for all different kinds of companies, unless you have a spreadsheet or a workbook to keep track of what you've sent in and what you've made back off that and what you're still missing, how would you ever know if you got the rest of that paid to you? So, and a lot of them will hold it for a longer period of time just to make sure they got paid. And then if they don't get paid for whatever reason, they continue to hold it. Oh, wow. So yes. Jared Flinn: Another thing that you say to watch out for is, being able to factor with multiple counterparties or I I guess let me phrase it this way. So smart freight funding, if you wanna just send us payables with 1 company or receivables 1 company. Correct. But if you have a company that's paying you quick, you can invoice them. So we're very open on that. You can like I said, if if you have someone that you're hauling for and they pay you in a couple days or whatever, you don't need to factor that. You can. We we won't turn it down, but, like, hey. Jared Flinn: Bill those companies direct. You're gonna get your money just as fast that way. Sarah Hansen: 100%. So use 2 big names off the top of my head, Schuler and Gavilan. If you have a great working relationship with Kathy at Schuler and she pays you every Thursday and you can wait that 7 days or whatever it is, by all means, go ahead and direct bill. We're here to help you with those ones that are 30, 60, 90 days out and or the accounting nightmare that you don't wanna have to deal with in your truck, especially the one owner operator guys. It's just too hard to keep track of. Jared Flinn: Yeah. But other companies, factoring companies, a lot of times when you sign that contract Sarah Hansen: Yep. They own all of your receivables. Jared Flinn: You have to you're you're obligated to send a 100% of your receivables even if somebody's paying you the same day. Yes. Correct. You have to turn that in, and the factoring companies gets a percentage of that. Sarah Hansen: Yes. Sarah Hansen: Correct. Jared Flinn: Okay. That's bullet point number 2. We don't have a term of bullet points. Yeah. Actually, there's only 8 here. So but, you talk about, the term of, the contract. Yes. You know, we don't have a contract free or a contract fee or anything to break. Jared Flinn: So a lot of times, if you want out of a contract Yes. What what like, give us some examples. What have Sarah Hansen: you seen? So I handled new driver setups. In in that, we run a UCC search to see if anybody other has a lien filed against your company. Most of the time, it'll be a third party that is the originator is a factoring company. So we have to decipher who that is and then decide if we can get you out of whatever contract you might be in. So we reach out to the factoring company. We reach out to you. We have you reread through your contract, put in your notice that you need to put in. If they allow it, we can do a buyout, which again is just buying the receivables they have open for you, but also may include that termination fee. Sarah Hansen: In previous years, we did not do that. We have started doing that, because it's just it's hard to come up with $25100 when you're in the middle of 2 different factoring companies. You're not able to even factor right now, and just that's just a big chunk of money out of people's pockets. Sarah Hansen: So So so so we'll look at what Jared Flinn: the termination fee is. Correct. It's usually but pay for that to get it switched over. Sarah Hansen: Yes. Correct. And then we set up payment plans once they're over. We ask for it to be paid within 45 days of your startup with us so we can take it off of loads or we can do ACH pulls. Whatever works best for your your pocketbook. Jared Flinn: This is one that I've seen before, and and and there's a specific company, I think, out of Utah where I saw this, but, like, some factoring companies, like, Larry Hurt : you can get in trouble Jared Flinn: if you're not factoring enough. Right? There's a penalty. Shit. Talk about that. Because I thought there was one like this this trucker. He wasn't factoring enough, and he ended up owing them, like, 10 to $15,000. Sarah Hansen: Well, there's minimums, like, a set minimum that you have to factor in a month, or say it's like we don't have that. So it's hard for me because I I can't even see that side of things. But, you know, god forbid the truck go down or, you know, a family member gets sick or whatever, and you can't be on the road. It's not that you don't want to be, but you can't be, they're gonna charge you for nonuse. And we Jared Flinn: have It's not costing them. Sarah Hansen: I don't understand. Agreed. Being in the bulk factoring industry, we have guys that go missing from, you know, March to May planting and September to November harvesting, and and there's no fee for non use. We understand you're out there doing your other side of your job where you're, you're harvesting your crops or you're planting your fields, whatever the case may be, or gosh forbid again that the truck goes down or something like that. The nonuse is a big one. Also, the minimum requirement. Jared Flinn: Yeah. Sarah Hansen: Another go back to the break the contract thing. There's a big factoring company out there that has a big name that a lot of people know, that not only do they have the contract for the term of time, but then if you wanna break it, they take what your average monthly volume is with them, your percentage or your amount, and then they take it times the amount of months that you have left in your contract. So if your contract just auto renewed in March and you wanna leave in April, they're gonna charge you April through Jan or through next February that many months times whatever your normal push through would be. And we did have a guy that came through that that number was over $100,000. Oh my gosh. So who can buy that out? You know, unfortunately, we're unable to help that gentleman, but he did say that he was gonna get back with us as soon as it was a more reasonable number or once he got out of you know, got to that point of that contract. We're about 2 months away from that, so hopefully I hear from him soon. And, yeah, it's just you have to read that fine print. Sarah Hansen: It's horrible, but you have to read it. Jared Flinn: Hey, guys. One of the things I love doing more than anything is going out and visiting you members of bulk loads and our community of companies. One thing I hear over and over is how many guys, especially new to the industry, go back and listen to every episode of bulk loads. So I just wanna tell you, man, if you are wanting to learn more and just figure out every aspect of bulk trucking, that's why we created a podcast. It was to highlight everything that we could think of to make you successful as possible in the bulk freight industry. So if get a chance, go check it out. Start at episode 1 and get all the way through our episodes. You will not be disappointed. Speaker G: I promise you that. Thank you, and god bless. Jared Flinn: I'm terrible at reading. Sarah Hansen: It's it's the worst. Nobody wants to. But look for the dollars and the number signs because those are where it gets a little scary. Jared Flinn: And I'm sure you could find somebody, like I mean, even a relevant like, pay an attorney, like, a $100 or whatever to read something. Like, don't Sarah Hansen: Send it to me. I will read it to you. Like, I will tell you what it says. Jared Flinn: Yeah. That's a Sarah Hansen: good point. I actually have several of the different factoring companies contracts because people have had me look over their contract to figure out when they have to put in their notice. That's another thing. If you do wanna terminate, some of them require the specific amount of time that you have to give them. You know, kind of like your 2 week notice when you leave a job. Well, this one, you have to put in a 90 day, but not more than a 120 day notice. So you have to think up to 3 months before you wanna leave, but not more than 4 months. You have to put in a written notice via email and mail, and then you'd probably wanna certify that so you know that they got it because always they could say they never received it. Sarah Hansen: It's the hoops they make you jump through to leave is pretty crazy. It's almost like they're, like, jailing you. Jared Flinn: Yeah. It's Sarah Hansen: You know, they're keeping you prisoner. Yeah. I keep thinking, like, it looks like predatory factory. It's scary. It's so sad. And I so if and when our guys want to leave, sometimes it's because their growth and business has done so well that they hired secretaries or whatever the case may be. Jared Flinn: And, honestly, that's what we That's perfect. You know, people say that's a bad business model, Jared. Like, your customers are leaving, like, I think, like Absolutely not. That's the greatest thing to do if somebody's like, they've grown out of Sarah Hansen: Yes. They don't need us anymore. They they've made it. They've they've gotten past the point where they need that book pay because they've built their business and their book work to where they can handle it on their own. And and things happen. COVID happens, and then you turn around and you come back and we welcome you with wide open arms. You know? Larry Hurt : That's awesome. Sarah Hansen: So, yeah, it's it's pretty crazy. Jared Flinn: Talk about there's this misconception We've talked about this before on the podcast, but recourse versus nonrecourse. Smart freight funding is recourse. Sarah Hansen: That is correct. Jared Flinn: And, if you don't mind, just in layman's terms, talk about what it is. Like, what does that mean? And then I'll let you speak of why we are what we are, why we are recourse. Sarah Hansen: Right. So recourse is that if your customer doesn't pay for whatever reason, your insurance wasn't correct, the load wasn't delivered properly, they went out of business, whatever the case may be, we're gonna try our dangest. I mean, dangest. 90, a 120, 200 days. I mean, we've pushed it pretty far before. I mean, we went through the whole yellow situation, and we try to make it feasible for everybody. We know that things happen, and it's out of our control. We tried our best to get that money so that we don't have to take anything back. Sarah Hansen: But if push comes to shove and we've exhausted all of our efforts, which is including tagging you in, tagging the broker in, filing on a bond, anything and everything we can do to get that invoice paid, then, unfortunately, we do have to come back to the carrier. We never take money out of your account without asking. We never just pull money. We do not take it from your loads without asking. We make some kind of a payment plan with you, whether you just wanna pay 1 and done and get it over with, whether we need to break it down for a little bit, whatever the case may be, but also kinda depends on what happened with the situation. But, the nonrecourse companies oftentimes have a higher percentage rate Yep. Jared Flinn: Further And that's kind of the marketing ploy Sarah Hansen: for Sarah Hansen: their commission. Jared Flinn: Yeah. Recourse is I'm just using numbers. 3%. But if you want nonrecourse, we'll do that, but it's 5%. Yeah. Sarah Hansen: Or higher. Sarah Hansen: Or Sarah Hansen: higher. And or they hold the reserve for longer or forever until you stop factoring. Like, they don't give you that money back because they want that cushion should the worst come to worse. Yep. And that kind of puts me on another subject, the UCC filings, which we often run into. Jared Flinn: Well, I wanna get into UCC. Okay. Let me trail back off on the the nonrecourse, but the problem is most people realize, like, we do in other factory companies, you do extensive research and background and credit checks. I mean, how many credit checks are you doing a day? Sarah Hansen: I mean A lot. A lot. Yeah. So we're we're making sure It's not on the carrier by No. No. No. But It's on customers. Make sure that we're we're sending up a company that we feel is sound. Sarah Hansen: Yep. Jared Flinn: So the the point I'm getting across here, nonrecourse companies, they're not gonna factor something that's super risky. No. It's not gonna pay that, you know, you it's not, like, they're just not gonna do it. So it's it's a marking point that they're they're almost gouging you more percentage points. They know that you're I mean, to but you have that peace of mind that it can't come back on you. And maybe some people like it, but I'm like, they're not gonna factor regardless if it's bad Right. If it's bad debt or it's gonna be a receivable that they can't collect on. Sarah Hansen: For sure. Jared Flinn: So let's talk about UCCs because this fun. No. No. This is perfect because that's why I wanted to kinda, you know, move towards and kinda trail off there. UCC seemed very complicated. Yes and no. What what is a UCC? Sarah Hansen: In the most layman's term, it's a lien. It's a lien against you or your company or both. A blanket lien is the most typical wording because it incorporates everything about your business or your yourself. It often lists equipment, receivables, Chantel paper. Like, there's a whole list, and it's a very legal And is this, like Jared Flinn: because you you have to file a UCC or you can search UCC. Is that done through different state entities? Is that how it's Correct. Sarah Hansen: So a UCC is filed in the state that you're, residing in. Domotiled. And or it can be in the state that your business is incorporated in. So say you live in Nebraska, but you have your business located in Iowa, They could technically file in Nebraska on your business and or you in Nebraska because you're the owner. So the UCC is there for two reasons. And, SmartFree, everyone that I know, as far as I'm aware of, all the factoring companies that I've ever dealt with has a UCC filing. Here's the deal why. Because I just hand you money not knowing if I'm ever gonna see that back. Sarah Hansen: I mean and some of these big companies that have multiple trucks, you know, an owner operator, 10, $20,000 a month, but the ones that have multiple trucks and are out across the road. I mean, we can out 80th a $100,000 a month to somebody not knowing if we'll ever see that back. Jared Flinn: So what is a sorry. I'm a what so what is they because I know obviously, and if you've ever got a loan before, like, for your equipment or whatever, you have a UCC filed, right, with that with that financial institution saying, basically, what it means though when they file that UCC, like, they're first in line if if the if you were to default on that loan? Correct. Sarah Hansen: Correct. When COVID happened, the government gave out small business loans. Those will show up a lot for us. Kubota, Case New Holland, anybody that you buy equipment from will show up. Banks, we don't ever need to be first positioned. We put ours out there for two reasons. It puts our name out there as your factoring company because you cannot have 2 factoring companies. Because in essence, a factoring company does own your receivables, all of them. Sarah Hansen: We don't we don't own all yours because we let you pick and choose. However, that's what the notice of assignment states is that we own your receivables. So you can't have 2 companies claiming to own the same receivables. Yeah. So it puts our name out there to other factoring companies. Should you try and go sign up somewhere else? They're like, oh, wait. You already have factoring company. We need to get a release or do a buyout. Sarah Hansen: Also, that if push came to shove and the worst happens and, unfortunately, you know, in the economy, either your company goes under or something terrible happens, that we do have some kind of legal means if we would have to take something to court. Unfortunately, at that point, a lot of times, there's nothing Jared Flinn: Yeah. Sarah Hansen: Left, but it does have that legal. I don't know what the word is. I'm looking for it. Legal Yeah. Jared Flinn: And I guess I'll say this. So, like, if, you know, somebody they have Sarah Hansen: a, you Jared Flinn: know, couple truck trucking company, they go out of business. Usually, when it comes to the order, the banks Yeah. File on the equipment, all that. So when that gets liquidated or sold Yeah. The bank's first possession. Sarah Hansen: Yep. Jared Flinn: So if there is an AR, it's usually there. Yeah. Yeah. Sarah Hansen: It's kind of like filing on a bond. It's 1st come, 1st serve. So if or it's not 1st come, 1st serve. It's based on how many people put in a filing and what they have that's due, and so that's how they dole it out. Same thing. The bank's gonna get first priority because they have the top UCC filing. They will not, you know, subordinate to us nor do we want them to. That's another thing about UCCs too is that we file them, and, yes, it can look scary on your, you know, your banker says, oh, SmartFray has a low, UCC filing against you, a lien against you. Sarah Hansen: And a lot of our guys will panic, and they'll call me. And I'm like, this is why we do it for these two reasons. We do never we never want to hurt your ability to buy, sell, trade, any of that stuff. Like, we want you to be able to grow your business. That is absolutely what we're about. So we do not wanna hinder your business in any way. Have your banker call me. Have your loan officer call me. Sarah Hansen: Have your equipment auctioneer call me. We will sign a waiver. We'll sign a subordination. In some cases, banks will want us to terminate and file behind. Not a problem. They want first position. Not a problem. It's not a problem at all. Sarah Hansen: We don't ever wanna be a holdup in your in your business. So Jared Flinn: because we've, and just through emails I've seen, you know, sometimes well, this may even go back to the factory company. Sometimes we'll have a carrier that they come to us, you pull up their UCC filings, and there's another factoring company that They didn't even know. Didn't even know that was assigned. Talk about that. Sarah Hansen: So, sadly, a lot of them will file the minute you put in an application. Jared Flinn: So can can a factory or can any company just file a UCC or lien without the person no? Like, can somebody file a UCC on I I believe so. Interesting. Sarah Hansen: I mean, I don't I I don't know the legalities of that, but I I would assume so. Sarah Hansen: Yeah. Sarah Hansen: And maybe it has to do with, you know, we so when I started, we had a one page application. It was literally, like, your name, your address, your bank account information, and that was it. But, obviously, over the years, we've unfortunately been burned. There's some characters out there that aren't the the most friendly in the world that have unfortunately made us have the legal part of it. And so again, being in like more or less the financial banking side of things, we probably have to have that in order should something, you know, have to be done legal action wise. Can someone just if I wanted to Jared Flinn: see if I had UCCs filed against me, can someone search that? I know I'm asking you some of these. These are questions I don't even I didn't even help you for, but I'm I'm just curious as I'm thinking about this as a business owner. Sarah Hansen: I'm not sure if just the general public could search. It's through the secretary of state, so I'm sure that your state department would be able to tell you that. We actually go through a third party company, corporate service, and they actually pull the files for us. We just type in the company name or the owner name, and that'll pull any information they have. And then you kind of have to weed through them and and decipher because, you know, there might be a lot of Joe Smiths, but maybe there's only one Joe z Smith, you know. So we kind of have to pick and choose and make sure who we're setting up is clean because we're we're mainly looking for the other factoring company, but we also do keep an eye out for federal and state, tax liens because, unfortunately, the government can come to us because we're putting money in your account. Even though we're not paying you, in essence, we're still depositing into your account. So we those are the top three things we look for. Sarah Hansen: Another factoring company and any state or federal taxes. We don't care about bank loans. We don't care about equipment loans. That's part of owning a business. So Jared Flinn: If someone wants to get out of a basically, once released from a UCC or, you know, say, it's another factory company or, I mean, someone wants to leave us or whatever. What what's that process, or how does that work? Sarah Hansen: So as far as terminating the UCC, that's super I mean, it's a push of a button on a computer. As far as being at another factoring company and wanting out of that, that's where either the buyout or the release comes into play. And then on that release usually or in the email from the release, it will say that we have permission to terminate that UCC filing. It does cost every time we search them. It does cost every time we file them. So those companies don't want to have to pay again when you're when they're leaving, you know, when the the carrier is leaving them and coming to us. So they'll just give us permission. So we take on that the debt of canceling that one and and filing ours. Sarah Hansen: And a lot of Jared Flinn: times, sir, you're working. So I'm just saying for our carriers, like, say you wanna move or switch over. In my mind, you you do a lot of the heavy lifting. It's usually the carrier's just signing saying, yeah, this is okay. But you're the one usually contacting the other factoring company. Yes. And and basically getting everything taken care of. Sarah Hansen: And I used, Rachel did it originally. She was she handled all the buyouts. Rachel handed it to me, and now I'm in the process of training Don and Sam on that. But I still handle the majority of them. Don has done a couple on her own, with me overseeing. You basically send the other factoring company an email that says and all factoring companies have an email address like transitions at or whatever, and you just ask to say, you know, this carrier's ABC Trucking is trying to sign up with Smart Rate Funding. We see that you have UCC filing number 1234. Can you please give us permission to terminate this and send a full release? Or if they have open AR, please provide bio details. Sarah Hansen: Some of them will come back and say they're not eligible. Have the carrier call us. And some of them will say, sure. Here's their aging. So buyouts are a little they're time consuming. 3 to 5 days is a best case scenario because we have to get in contact with them. They have to get back in contact with us. They send over the aging receivables. Sarah Hansen: If you're a one truck guy, you know, that could be 10 loads or 20 loads. If you're a multiple truck guy, that could be 3 pages worth of invoices that they have open. We have to call those companies to verify, hey, Gavlon. Do you have load number 1234, load number 2345? You know, and make sure that they've received all the paperwork they need to process that payment. Because in essence, we're gonna give the other factoring company all the factoring company all the money that's owed to them Sarah Hansen: Mhmm. $10,000. Yeah. And then as those $10,000 roll in, they will Sarah Hansen: forward it on to us. So we buy out the receivables, take on that debt, but we have no we have no paperwork. We have no relationship with the carrier yet. You know, like, once they're on with us, we we can't give that to them if they wanted. So we have to make sure all that's done ahead of time. So it's a lot of due diligence on our part. And then once we've completed that and verified that all the loads are there, everything they need to pay is there, then we request a final buyout agreement. We sign, the carrier signs, and then the other factoring signs, and we send a wire for the money. Sarah Hansen: They receive the money, they apply the money, and then they send us the full release. So it it just depends. There's a couple of companies out there unfortunately that I've had to work for free for their accounting department to unmess up some stuff. I just had a almost a month long, buyout because they had stuff from that were at 854 days aging. Like, oh my gosh. How do you pass an audit? How does your accounting pass, with stuff on your bookstore for 2 years, almost 3 years. Like it's crazy. So let me do the back work. Sarah Hansen: I go and I get the right tickets or the right, whatever they needed to make that happen, and then we got them paid. So we went from a buyout that was I believe it was supposed to be, like, 47,000 down to, like, 16,000 because I I did all their work for them. But we got them over, and they're happy, and that's all that matters. So Jared Flinn: I could tell you're, like, I get them you're super passionate about this. Why are you so passionate about this? Sarah Hansen: I don't know. I love my guys. I've been here since the beginning. I mean, pretty much the beginning. Yeah. Smart Freight turns 10 this fall, and I've been here it'll be 9 this fall. And I've talked to these guys on on the phone, and I know them. And some have been in our office, and some have come to our girls' weddings. Sarah Hansen: And, you know, and you see and hear those stories, and they're not heard. These guys aren't you've got you're not heard. I'm and we're here to hear you. Yeah. And it's sad because sometimes I feel helpless in the buyout situation where they're stuck at one of these companies, and I can't I can't save them. Yeah. So that's that's sucky. But Jared Flinn: Yeah. It's crazy because, like, we don't ever talk and I'm very honest. We don't ever talk about the dollars from I mean, we don't we figure if we serve these people well, you know, we're all gonna benefit. Yeah. You know, that's but we don't think like, we think about how we can help these guys so much more. Yeah. Like, how we can give them a voice. For sure. Jared Flinn: How we can lift them up. How can they get treated better and and let them do what they're good at. And, honestly, we can be a part of that. So but I can tell you every day you've been breathe that motto. Sarah Hansen: I'm very much a people person. I always have been, you know, on I came to this company. It took Rachel 3 years or 3 months to convince me to come over. I had worked at a Mexican food and restaurant for 14 years and a grocery store for 7. Worked odd hours and odd jobs and not great pay, so I could be home with my kids during the day, when they were little. And then when they went off to school, I was like, okay, I'm ready for like a 9 to 3 job. I still wanted to take my kids to school and and pick them up after school. And I I couldn't find anything. Sarah Hansen: And then Rachel reached out to me, and I had no idea. I hadn't worked in an office for many years. I was gonna be in an office with 5 women. Oh my god. Now it's 25. But we are very much all cut from a different cloth. I mean, we're very a unique bunch that we have. So, but from the beginning, it was yeah. Sarah Hansen: This is Alan. He's been with us forever. Alan will be at Book Boats Conference with his daughter, Grace. Alan and Grace came to Jackie's wedding. Like we know our guys, we know their dogs, we know their wives, we know their truck. We know, like to me, that's amazing. I worked in in people things, and now I don't see them face to face as much, but I can talk to them on the phone a 1000000 times. You know? We have guys that just call just to chat, and it's so great. Sarah Hansen: I mean, I don't know. I just love it. Jared Flinn: Yeah. Well and that's gonna be, like, kind of my final question I'm gonna ask. But, yeah, it seems like I've seen you. I've been copied on some of these emails, and because we do get a carrier that they wanna switch over another factory company. But you'll send this email to them. And it's not for our benefit. It's not to say, hey. Like, we want you to stay. Jared Flinn: Please don't leave, you know, and we but, like because they get a lot of times, they get baited in by, like, this a lower rate or something like that. But, like, you draft this email to them, but it's like, hey. Be careful. Sarah Hansen: Yes. Jared Flinn: Like, watch out. Like, look for this. Look for this. And it's not because we're I mean, we want you to we want you using us, but, like, don't get suckered into this. Sarah Hansen: For sure. Jared Flinn: Yes. Don't get I Sarah Hansen: have my little list and I say watch the fine print, you know, like, ask a lot of questions and call them. If they don't answer the phone, like, one of the big companies I called one time, I just needed an email address, and I spent 45 minutes on hold. Jared Flinn: Well, that's what I was 45 minutes. And that was the last question because it's like, you know, you've already given your sales pitch, but, like, that I think that's what sums it up more than anything. Talk about the customer service aspect of it, being able to you know, other factory companies, but being able to call and somebody actually answer the phone. Sarah Hansen: Yes. We're very well, there's 25 ladies in the office, and we're very nobody wants to hear the phone ring. So it's answering on the second, 3rd ring, 4th, if somebody is not paying attention. But I mean and if I can't help you, I'm going to find somebody that can. You know, my specialty is upstairs. We just built a new building and we have an upstairs where our accounts receivable department is our new carrier setup. Downstairs are the funding ladies. So if I can't help you for some reason with a question, I'm gonna get you to somebody who can. Sarah Hansen: A lot of the questions that come in have to do with, the load they sent in. Did they did they get everything they needed to send in, and, and funding type questions? So then I can get them down to Jess or Kristen or one of the girls in funding, and get them the answers they need. There's 24 of us. So most likely you're gonna get to know us and you're gonna talk to the same person or people every week, every day, whatever it is that you call in. We have guys that we never hear from, and I suppose that's just because they're happy and don't be Sarah Hansen: you Sarah Hansen: know, like, everything's run smoothly. And then there's the guys that we hear from every day, which we enjoy just as much or more. Like we we build those relationships. I know what's going on in their life. Yeah. And so, yeah, I think the biggest thing is the customer service is that you're not a number. And sadly, we were just talking about this on the way down here at the 6 hour drive down, is that we know our guys more by their trucking name. Yeah. Sarah Hansen: Like because one of the bulk loads guys will call up and say, hey. Did Tom Smith call you? And I'll say, wait. Who's Tom Smith? Oh, he's ABC Trucking. Oh, okay. Yeah. Tom. We deal with the funding side, so we know you so much as your trucking company name because that's what's on the rate confirmations. That's what's on all of your paperwork. Sarah Hansen: We know that side of it. But we do have the guys that have been around forever since the since the beginning that we know them on a first name basis. And and yes. Jared Flinn: That's awesome. Well, Sarah, thank you so much for coming on the show. I wanted our audience to see and hear your heart. You've been a blessing for our company. And I'll say this, like and I say this proudly and humbly, like, in a down freight market, we're continuing to grow. Sarah Hansen: Yes. Jared Flinn: And I think that's a testament to your your work and the ladies up there and everybody putting this together that people are looking for better options out there. They're looking for better ways to handle business, better people that, you know, I think there's something to say about good old fashioned, you know, people serving people, and that's what we're about. Sarah Hansen: So Sarah Hansen: Let us show you the difference. Let us take care of you because that's what our job is. You can do your job, which is driving, and we can do our job, which is helping you. Jared Flinn: Yes. So if you're interested in Smart Freight Funding, you can contact us anytime. Sarah, what's the best way? Sarah Hansen: Email, you can do a setup at You can reach out to me, Sarah, with an [email protected]. You can give us a call at 800-838-2907. Yep. I mean, there's multiple ways. Give us a shout on Facebook. I mean, there's lots of different ways. Just reach out anyway. Sarah Hansen: I'll answer any questions you have. My direct line, 531-200-5037. Jared Flinn: And more likely, Sarah's gonna be touching your documents or seeing them being Hey. Set up well, in one shape Sarah Hansen: or form. Jared Flinn: But Sarah Hansen: I did wanna say one more thing real fast. Absolutely. So a little misconception that we've had recently with people that are maybe looking around, and that's fine. Again, like you said, we want you to do what's best for yourself and your business, but we do want you to ask all the questions and read the fine print. But we understand if push comes to shove and you need to go, we totally understand. We're not gonna hold you to that. We just ask that your receivables be taken care of, whether that's by you, by your customer, or by a buyout from the other factoring company. But the thing that has been brought up lately is that we we're moving to van. Sarah Hansen: We're moving to flatbed. Jared Flinn: Oh, yeah. This I'm glad you Sarah Hansen: brought this up. Wow. Because we are number 1 in the bulk industry because not a lot of other factoring companies deal in the bulk industry, for 2 factors, they don't understand the math and because it's not a big moneymaker for them, they'd rather just have the flat rate. Easy cut done. We we made our niche in the factoring world as the bulk factoring. However, we do factor everything now. Previously, we did have 2 little things that were not big ones, livestock and new car hauls just because the loss is crazy. Mhmm. Sarah Hansen: But we have started dabble in those a little bit Yep. And haven't, you know, fuck on wood, haven't had anything Jared Flinn: For sure. Sarah Hansen: Haven't had anything bite us yet. But, so, yes, flatbeds, reefers, power only, hopper. I'm running out of I'm all my things. You know? Jared Flinn: So we do other trailers besides this one behind me? Sarah Hansen: Yes. Yes. Not just this guy. It was Sarah Hansen: just very Jared Flinn: But that's a good point. Yeah. We do. I think people just think that it's bulk only. Sarah Hansen: Yes. Jared Flinn: But, yeah, any counterparty that's reputable, we will go out Yes. And we can factor those receivables. So, yeah, if you are we do the we know that different markets go up and down, and sometimes it's better to migrate over, shift a flatbed or van. Tyler Allison: Yep. Jared Flinn: We would be honored and can do that freight as well. So don't think that that we won't do that. Sarah Hansen: Yes. So And once you're on board, we do have an approved shippers list with over 7,000 customers we already work with. We onboard, I would say, 10 to 20 new companies, which seems insane to me a week. Yep. And so if you have somebody that doesn't happen to be on our proof shippers list, we'd be happy to take a look at that. We run, credit through Insomnia and Cortera. Insomnia is through Equifax and Cortera is through Moody's. So 2 big credit, you know, credit bureaus. Sarah Hansen: We also look at how long they've been in business and average days to pay, things like that. So Yeah. We'd be happy to take a look at them and see if we can get them added to our list of customers that we already have. Jared Flinn: Yeah. Awesome. We'll definitely check out Smart Free Funding. Sarah, thank you so much. God bless you. Actually, I I usually shake hands. I'm gonna give you a hug, so thank you so much. Thank you. Sarah Hansen: Thanks for having me. Tyler Allison: Larry, what'd you think of the episode? Larry Hurt : I mean, it's everything that I that I expected. Just the what Sarah talks about and how she gets into it and, and what these other factoring companies are actually doing. You know, Jared mentions all the time, you know, I built a factoring company or we built a factoring company because we hated factoring companies. I think the podcast just alludes to that even further of what the mission and the vision of the factoring smart freight is for us. Yeah. Tyler Allison: And I think we've seen more and more guys turn to factoring companies in the last year or so just because the market's getting so tight and people are realizing that they need to have that cash flow in place. And, honestly, we've seen bigger companies start getting into factoring, you know, 20 plus trucks because they're feeling the hurt too with the cash flow issues. The great thing about Smart Freight about onboarding these bigger companies, and I think why they choose Smart Freight is because there's no contract. So they can use Smart Freight in in the, the tight markets. But as soon as the market turns around, they can step away and say, hey, I don't need to use smart freight anymore. Larry Hurt : Yeah. Yeah. I think the goal is to not handcuff anybody. Yeah. One of these other factoring companies, you know, you're locked in, there's typically fees to get out. Like she mentioned, our goal is just to serve clients better and sometimes that's with, without a contract. It's kinda counterculture. But, yeah, like you said, cash flow is tight. Larry Hurt : This is a cash flow business. We're seeing more companies turn to it. And it's exciting for us because we also, you know, we, we wanna help. Yeah. And, and if we can do that, we will for sure. Tyler Allison: Yeah. That's good. Yeah, great episode by Sarah. As always, guys, Sarah mentioned it, but, you can go there. You can click a button to get started, fill out a short form, and we will get you in touch, with the Smart Freight team, or you can click on the factoring tab on bulk loads. It'll take you there as well. Larry, I also wanted to bring you on the the intro and outro here so you can kinda give an update on how insurance is going and what all we got going on over there. Larry Hurt : Yeah. It's been crazy. I don't even know where to start. So we are celebrating our 2 year anniversary, coming up here mid June. It's hard to believe that we've been going for 2 years, but it's also like it's gone so fast. Yeah. And so it's it's it's a big milestone for us. You We've onboarded over 250 motor carriers and brokers in insurance in a small span. Larry Hurt : And, you know, we always I shared this at the conference, but our goal is to be the largest and most niche bulk trucking insurance agency. And I think we're doing that to, to a high degree. So it's there's comes with challenges, but it's been a lot of fun. 2 weeks ago, we opened up our 2nd bulk insurance group branch. They are actually office with Smart Freight in Omaha. Tyler Allison: Very exciting. Larry Hurt : So that's really cool. We got 2 guys that have been, producing for a while that are up there and they're gonna run that show for us. So yeah, with growth comes opportunities, but again, the mission stays the same, right? It's just to keep serving and growing it. We've also started the permitting business, which you all have heard about. We're seeing actually, it's kinda interesting on the insurance side, we're helping guys get set up with new authorities and we're able to also get them their insurance when they need it. So the last, the last piece of that puzzle is posting the insurance filing. And so it's been kind of fun to watch us work in tandem with the permitting side and Tanner over there. We're also seeing more brokers, that are needing surety bonds, and so we're able to help with those and then help them get their contingent coverages for their, shippers as well. Tyler Allison: So it's been a lot Larry Hurt : of fun. Tyler Allison: Yeah. Big things happening over there. Seems like every day we get more and more inquiries just about people asking us to quote their their insurance. So it's it's been it's been cool just to see the just the the bulk loads members saying, hey, you know, I've already got, you know, all my stuff, the factoring, everything with you guys, like, Hey, why not write my insurance too? Sarah Hansen: Yeah. Larry Hurt : And that's exactly what we're trying to accomplish, right? Is providing services that make you easy for others. That's right. Tyler Allison: Yep. Very cool. Very cool. We this summer, it's truck show season, so we got a lot of truck shows coming. We have a bunch of guys attending those in our office. We need to do a better job, honestly, of just letting you guys know the ones you're attending because you guys are out there, going to them. We definitely wanna meet up with you. We we always bring swag whenever we go out to them, and just wanna shake your hand and just visit with you for a bit. Tyler Allison: The next one that we have coming up, it's a big one, the I80 Trucker Jamboree, July 11th through 13th. Last year, we sent quite a few guys up there to hang out. It was really cool. This year, I think Smart Freight is going to have a booth at the show where they're gonna set up. Some of the ladies are gonna man the booth there, and and that way, you can stop by and learn more about Smart Freight if you're just curious. And then I know we have a lot of insurance guys going up there and a lot bulk loads guys. So if you are going to be at the I80, jamboree, let us know. You can comment on YouTube, comment on the forum. Tyler Allison: However you wanna let us know that. Email us, podcast at, and, we'd love to just write your name down and get in contact with you so we can find out where you're gonna be if you have a truck in the show, stuff like that. Larry, are you gonna be able to make it to any shows? I I mean, just how big busy you are. Larry Hurt : Yeah. I don't know if I will or not. Every week's a little different, but I will say we got some new hats. Tyler Allison: We do. Yep. Larry Hurt : You're wearing one right now that we've seen you wear one yet. I haven't got one. No one's put one on my desk yet. I don't know. Where do I find them? Tyler Allison: We'll get one. Yeah. We'll get one. I'll make sure a couple land on your desk. Yes. But we do have new hats. We have been giving them away, for our YouTube subscribers. Simply just email us podcast at, and we will, all you have to do is just subscribe to our YouTube channel, and we're gonna send you one completely for free. Tyler Allison: You can also comment on the YouTube channel. We can get in touch with you. I think these hats are I mean, it seems like every time we do a hat order, we try to do something different, but I'm a big fan of these hats. They're just like Larry Hurt : They're a little bit unique. Yeah. I think we haven't seen those color schemes yet. And, and the patch is a little bigger. Yeah. Sticks out a little bit more. It looks good. Tyler Allison: I think, Joe, shout out Joe. He kinda helped, pick out some of the colors. So yeah, we're we're excited. We got tons of them to give away. So definitely let us know if you want one, and we will, we will hit you up with a hat. Also, we wanna let you guys know that we do have a prayer line, prayer at as always. So you guys can email us with prayers. We know that there's a lot going on right now, especially with market, conditions, financial shortages, just diseases, you know, family issues, all that. Tyler Allison: So we wanna remind you guys, if you guys are battling something, please let us know so we can pray for you. We do have a team that, prays over all the prayer requests, and we actually put it out in our break room. That way, everybody can, pass by in here and and pray for you guys. So, Larry, would you mind, just go in and close-up closing us? Larry Hurt : Let's pray. Dear Lord, we just come before you, God, and we just, we thank you for this opportunity to be here and to serve our clients. God, we pray over all of our bulk loads members, God, and all the truckers out there, Lord, that you would just touch them, that you would intervene on their behalf, lord, and that god you would, you would help us serve them better, lord. We pray for your protection on the roads, God. And we pray for all of the people that are going through something. God, we pray that you would just, enter into their life, God, and show them who you are, God and your desire to know them. Lord, we pray over all of our businesses and all of our clients businesses that they would prosper Lord, that they would have a protection on them God, and that you would just help us serve our clients really, really well in Jesus name. Amen. Tyler Allison: Amen. Thank you, Larry. As always, if you can, just in the bottom left hand corner of the video, there will be a, subscribe button. Just hit that button for us. That will, allow us to notify you of any other, videos that go out and, that way you can be the first to see. So as always, guys, God bless. Thanks.