Associates Commercial Corp. Buys Transport Clearings
The move puts Associates Commercial near the top of a growing, but risky business that caters to the needs of cash-strapped, mostly smaller trucking companies.
Factoring companies take over the collection of accounts receivable in return for a fee and cash advances.
The first factoring companies were organized by trucking companies. Transport Clearings, in fact, began as a cooperative in 1942 and continued to be owned by a group of carriers after converting to a for-profit corporation in 1957.
"They invented freight bill factoring 56 years ago," said Mr. Derderian, who also heads Associates TransCapital, a division that makes asset-based loans to trucking companies.
In the last decade or so, major banks and financial service companies have muscled into the business.
Last year, for instance, Textron Financial Corp., a major commercial finance company based in Providence, R.I., acquired Systran Financial Services of Portland, Ore. (3-9, p. 5).
Comdata Corp., Brentwood, Tenn., a major fuel service provider, also entered the factoring business through its 1998 acquisition of NTS Inc., Fort Worth, Texas (1-26, p. 7). Other recent entrants include Gibraltar Financial Corp. of Northbrook, Ill.; Concord Growth Corp. of Mateo, Calif.; and First Savings Bank, Dallas.
Diane Reed, national sales manager for Transportation Factoring Inc. of Charlotte, N.C., said she expected more consolidation and acquisition activities in the factoring business in the near future.
"This should be a positive for trucking as it will weed out the field and create more intense competition among the survivors," she said.
For the full story, see the Jan. 25 print edition of Transport Topics. Subscribe today.
