TAFS Factoring Review: Unbiased Insights into Transportation Financing

January 9, 2024
Posted by: Jonathan Wright
Category: Factoring

TransAm Financial Services, commonly known as TAFS, provides factoring services specifically designed for the trucking industry. Since its inception in 2007, the company has been operating as a wholly-owned subsidiary of Jacobson Holdings. TAFS aims to alleviate the financial pressures that trucking companies often face by offering the purchase of accounts receivables, thereby enabling these businesses to maintain their operations without being hindered by delayed payments.

Factoring, a financial transaction in which a business sells its invoices to a third party at a discount to achieve immediate cash flow, is particularly appealing within the trucking sector. By converting sales on credit terms for immediate cash flow, trucking companies can invest in their business operations such as fuel, maintenance, and payroll, without the irregularities that come with extended payment cycles. TAFS tailors its services to support truckers, ensuring that they have access to the capital necessary to run their businesses efficiently.

Consumer reviews play a crucial role in understanding the effectiveness and satisfaction associated with TAFS’s services. Reviews across platforms like Google and the Better Business Bureau (BBB) indicate general satisfaction from clients, although there have been diverse experiences reported. This range of feedback highlights the importance of doing thorough research when considering a partnership with a factoring company.

Overview of TAFS

TransAm Financial Services, commonly referred to as TAFS, is a financial service provider that has carved out a niche in the transportation and trucking industry. Established in 2007, TAFS operates as a wholly-owned subsidiary of Jacobson Holdings. The company’s cornerstone service is freight factoring, which caters specifically to trucking businesses.

The essence of TAFS’s services lies in improving the cash flow for these businesses. By purchasing accounts receivables, TAFS ensures that trucking companies have immediate access to working capital, which is essential for maintaining operations and fostering growth.

With a focus on customer satisfaction, TAFS has accumulated several reviews and ratings that reflect its standing in the industry:

Google Reviews: 4.2 out of 5 stars
Better Business Bureau (BBB): 4.8 out of 5 stars

The services provided by TAFS extend beyond just the financial transactions. They offer resources and support to help motor carriers with industry-related regulations, DOT compliance, and best work practices. Their goal is to support the growth and success of trucking companies, regardless of their operating tenure in the logistics realm.

How TAFS Factoring Works

TAFS provides specialized factoring services designed to aid trucking businesses in managing their cash flow. The process starts with the application, moves through invoice management, and concludes with the disbursement of funds.

Application Process

The application process for TAFS Factoring is straightforward. Applicants must submit their company details, including information about their transportation business. TAFS then evaluates the application to determine the applicant’s eligibility for their factoring services.

Invoice Management

Once accepted, clients can submit their freight invoices to TAFS Factoring. TAFS manages these invoices, ensuring timely payment follow-ups. By handling invoice management, TAFS relieves trucking companies of the burden of chasing down payments, thereby allowing them to focus on their core operations.

Funds Disbursement

After verifying the invoices, TAFS proceeds with the disbursement of funds. Clients can typically expect to receive payment swiftly, which is instrumental in maintaining their cash flow. This prompt payment system is what distinguishes TAFS in the financial services sector, especially for small and medium-sized trucking businesses.

Benefits of Using TAFS Factoring

When choosing TAFS for factoring services, businesses in the transportation and trucking industry can expect a suite of benefits geared towards enhancing their financial stability and operational efficiency.

Improved Cash Flow

TAFS Factoring addresses one of the most pressing challenges for trucking companies: cash flow management. By purchasing accounts receivables, TAFS provides immediate access to funds, mitigating the wait time associated with payment cycles. This instant infusion of cash enables businesses to cover expenses and invest in growth without interruption.

Credit Management Support

Dealing with credit can be a complex aspect of business management. TAFS offers credit management support, assisting clients in assessing the creditworthiness of their customers. This service is crucial in reducing the risk of non-payment and ensuring a steady inflow of revenue by making informed credit decisions.

Fuel Advances and Discounts

TAFS extends fuel advances to assist companies in managing one of their largest expenses: fuel costs. Through timely advances and meaningful discounts, trucking companies can save money and manage their on-the-road expenses more effectively. These savings are essential for maintaining competitive pricing and operational profitability.

Potential Drawbacks

When considering TransAm Financial Services (TAFS) for freight factoring, potential clients should be aware of several reported drawbacks. These concerns are important to evaluate before entering into a contract.

Communication Issues: There have been reports of poor communication practices, which can be crucial in a business where timely updates are essential. Clients expect prompt and clear communication regarding their accounts.

Sales and Contract Clarity: Some clients have noted the use of dishonest sales techniques and claim to have received false and misleading statements about the contract terms. Full transparency in these areas is essential for trust.

Invoice Processing: Allegations have surfaced about the late submission of invoices to brokers, potentially leading to a higher interest rate than expected. This could significantly affect the cost-effectiveness of the service.

Contract Termination: A high termination fee has been reported, specifically:

Termination Fee: $1,000

Customer Service: The level of customer service has been a concern, with some clients finding it unsatisfactory. Good customer service is instrumental in resolving issues and ensuring smooth business operations.

Additional Fees: As expressed by a former client, undisclosed fees can add to the cost. It’s important for clients to have all the fee information upfront.

It’s advisable for businesses to perform their due diligence and consider these factors. Reading reviews and asking detailed questions about the contract can help in making an informed decision.

Fees and Costs

In reviewing TAFS (TransAm Financial Services), it is crucial to understand the specifics of their factoring rates and the additional fees they charge, which collectively impact the overall cost for using their services.

Factoring Rates

TAFS’s primary service revolves around freight factoring, where they provide an advance on invoices for trucking companies. The initial rate for their factoring services can start competitively, but clients should be aware that this rate can fluctuate based on the volume of invoices and the payment terms agreed upon.

Example Rate: As low as 1.5%, but may escalate based on various factors

Additional Fees

Aside from the basic factoring rate, TAFS may charge additional fees that can affect the total cost of their service.

Standard Fee: $5 per transaction
ACH Fee: $10 per transaction
Wire Fee: $15 per transaction

It is also noted that while TAFS does not acknowledge reviews on third-party websites other than Google or BBB, their authenticity in these platforms contributes to their A+ rating on BBB.

Comparing TAFS to Other Factoring Companies

When evaluating TAFS (TransAm Financial Services) in the context of other factoring companies, three key areas come to the forefront: industry specialization, customer service, and innovative technology. Each category reveals specific strengths and distinctions that set TAFS apart.

Industry Specialization

TAFS has carved out a robust niche in the transportation and trucking industry, a sector where it outrivals some competitors by focusing exclusively on the needs of this market. This contrasts with other factoring companies which might offer services to a broader set of industries with less specialization. TAFS’s understanding of the transportation industry’s intricacies allows it to tailor its services to the unique challenges trucking companies face.

Customer Service Comparison

Customer service stands as a pillar of TAFS’s offerings; they claim to be accessible 365 days a year, indicating a commitment to constant support unmatched by many peers. This is a noteworthy advantage as reliable customer service is crucial to trucking companies which often operate outside of standard business hours. Furthermore, positive customer feedback frequently highlights TAFS’s responsive service in comparison to others.

Technology and Innovation

In terms of technology and innovation, TAFS leverages digital payment solutions like Blynk to expedite funding processes, offering 1-Hour Funding options. Rapid funding is essential for truckers who need to manage cash flow efficiently, and TAFS’s ability to process transactions swiftly is a significant technological edge over companies without such capabilities. Other factoring businesses provide similar digital tools, but TAFS’s focus on speed stands out.

Conclusion

TransAm Financial Services (TAFS) has been in the financial services sector since 2007, specializing in freight factoring for the transportation and trucking industry. Its established goal is to aid trucking businesses in managing their cash flow through prompt payment services.

It is important for potential clients to conduct thorough due diligence and consider the spectrum of feedback when engaging with any financial service provider. The legitimacy and efficiency of TAFS’s services should be evaluated against their specific business needs and any possible alternatives that may exist.