TBS Factoring Review: Is It the Right Factoring Company for my Business?

TBS Logo

TBS is one of the easiest-to-use freight factoring companies on the market, offering low-commitment contracts and very low thresholds for users, making it a great platform for those who are just starting out.

A freight factoring company – in this instance, TBS – will provide shipping and freight businesses with advances on their unpaid invoices in order to supply those businesses with a more immediate cashflow. This can allow these businesses to take advantage of time-sensitive opportunities.

Most small trucking businesses can benefit from freight factoring, but if you'd like to learn more, read on. If you'd like to check out some other companies, fill out this quick, free form. You'll be given quotes from various freight factoring companies, and can choose one that works for you.

Pros and cons of TBS factoring

Pros

  • No long-term contract required
  • Clear recourse/non-recourse distinction
  • Low rates of 1.25% per unpaid week
  • 100% advance on your invoices

Cons

  • Customer service is cited to be somewhat weak
  • TBS can chase customers somewhat aggressively

What are TBS Factoring's benefits?

Coming off of the pros and cons, what are some of the most specific benefits that TBS Factoring can offer a trucking/freight company?

  • 100% advance: Most invoice factoring companies will offer up you up to 90% of the invoice's value, giving you that last 10% once the customer's payment clears. But under a non-recourse agreement, TBS will give you 100% of the value straight up – minus the fee, of course.
  • Minimal sign-up requirements: Since factoring companies are taking a bit of a risk by buying invoices that might not pay off, a lot of them require your business to have a great credit rating or a certain annual turnover. However, TBS has very forgiving sign-up requirements, which ask very little of new companies.
  • Easy recourse and non-recourse distinction: With recourse factoring, you'll need to buy back any invoices that fail to receive payment, while non-recourse factoring means that the factoring company will have to take the loss. TBS Factoring makes a very clear distinction between these two options on its freight factoring page, helping people make the right decision.
  • Fuel-related add-ons: Many freight factoring companies will also offer discounts on fuel cards and fuel advance programs, and TBS is no different. By using its freight factoring service, you'll have your foot in the door for its other offerings.

How much does TBS' freight factoring cost?

TBS has a somewhat unique pricing model. Rather than taking a one-time chunk out of the invoice payment before forwarding it onto you, like most factoring companies do, TBS takes a small percentage for each week the invoice remains unpaid. This starts at 1.25%, but might be a bit higher based on various factors.

So for example, if you factored an invoice worth $5,000 with TBS Factoring, and your customer took four weeks to pay TBS, your final percentage owed would be 5%, or $250 of the total $5,000.

5% is quite a steep rate when compared to TBS' competitors, but 1.25% is relatively low, so the speed at which your customer pays is pivotal. However, TBS Factoring does pride itself on its lack of extra fees. For example, there are no cancellation fees, no sign-up fees, and no listed advance fees.

Is TBS Factoring right for my business?

“I don't have a trucking company yet”

If you're looking for a factoring supplier before you've even started your company, TBS might be the one for you. You likely won't have piles and piles of invoices straight away, so a factoring company that handles them one at a time is a great idea.

And if your customers pay promptly, you won't be losing much on each invoice, since you only pay 1.25% for each week the invoice goes unpaid. This can allow you to accrue cash during a critical period.

“I am a driver with new authority”

A newly-established business may be able to use TBS Factoring to receive advances on invoices here and there, in order to build up precious cash reserves that can be used to buy more trucks or fuel that is necessary to grow a trucking business.

“My freight business is well established”

If your freight business has dozens of invoices on the fly, TBS might not be for you. TBS uses spot factoring rather than contracts, which means that each invoice is its own transaction, rather than an automatic process. This can be helpful if you're a generally financially stable company and need just a couple of invoices factored, but for a dedicated factoring company, you should look elsewhere.

What do TBS Factoring customer reviews say?

TBS' reviews are very mixed. It scores a 3.4/5 on Trustpilot, with most of its reviews being five-star ratings. The most common praise was about the speed of the business, and the customer service on offer. But this is interesting, because the most common complaints were about the same aspects of the company – meaning that it might be a bit of a dice roll, or that there was a massive shift within the company at some point.

TBS scores similarly on its Google reviews, pulling in a tepid score of 3.1 stars. And much like on Trustpilot, these reviews cover the customer service and the overall quality and speed of the service on offer, with both praise and criticism.

Based on these reviews, and thanks to its non-committal business model, TBS Factoring might be a good way for a small business to get a taste of freight factoring. But the longer you spend with TBS, you more clearly you might see the cracks starting to form in this service.

Verdict

TBS Factoring is a fine first step for smaller trucking companies looking to dip their toes into the concept of invoice factoring. Since you don't have to enter any contracts with TBS, it can be a handy way to experiment with the pros and cons of invoice factoring overall.

However, for larger companies looking for a long-term invoice factoring partner, you might be better off elsewhere. TBS is proven to struggle under a certain threshold, and if there's a mistake made amongst dozens of invoices, it'd be a lot harder to catch and amend.

If you're eager for an alternative freight factoring option, try our free comparison tool. You'll be able to compare various factoring providers and see which would work best for your business.

Frequently asked questions

What is TBS Factoring's fee?
TBS Factoring charges 1.25% for each week that the factored invoice goes unpaid by the customer. The promptness of the customer's payment can either make this charge extremely affordable or pretty hefty.
What does TBS Factoring do?
TBS Factoring offers a handful of different financial services, like fuel cards and factoring. In the context of invoice factoring, TBS will buy your business's unfulfilled invoices, and then wait on payment from your customer.
Is TBS Factoring legit?
TBS Factoring is a certified business that has been operating out of Oklahoma City for over 50 years. It operates under the Better Business Bureau, and has been reviewed by numerous customers and platforms. There is no trickery afoot here!
Is TBS a factoring company?
TBS mainly factors invoices, but that's not all it does. It can also help trucking businesses with things like fuel cards and fuel finders. Its main business model, however, is freight invoicing.
Duncan Lambden
Duncan Lambden Senior Writer

Duncan (BA in English Textual Studies and Game Design) is an Australian-born writer for Expert Market. His articles focus on ecommerce platforms and business software that allows small businesses to improve their efficiency or reach, with an emphasis on invoice financing and customer relations. He has written for Website Builder Expert and Tech.co, and has been featured in Forbes. In his free time, Duncan loves to deconstruct video games, which means that his loved ones are keenly concerned about the amount of time he spends looking at screens.