Unidentified Analyst: So all else equal, if no other brokers or factor signed up on the network, you would have $9 billion in incremental volume. Okay. And then I mean lastly…
Melissa Forman: Yes, [estimated leverage] trends remains the same. Yes, right.
Unidentified Analyst: Of course. So for TPay, you’ve announced a lot of major wins on the broker side, but we haven’t seen the same type of momentum on the factoring side. I think at this point, the quickest way to increase the network transaction penetration which looks to be about 6% of all invoices in the quarter would be to add some large factoring companies. Can you discuss the progress on that front and when we might see some large wins there?
Aaron Graft: Let me take that one. So the – and we allude to it if you read the factoring section of this letter. – the gating issue, in my opinion, towards driving greater factor participation in the network has to date been the fact that we were making 1 out of every 6 payments to them. And then we were making one out of every four or providing network data on one out of every four and now we’re at one out of every three. I believe a day is coming sooner rather than later where it will be one out of every two. And once you get to that level of penetration, factoring companies now can start to use your technology to change their processes. I mean that is the brand promise that TriumphPay makes to the factoring industry.
If you look at our own factoring subsidiary, it costs us roughly $6 to do the back-office processing per invoice. And that’s a generalization because it depends on whether it’s a large fleet, a small carrier, but let’s just use $6 as a good approximation. We need to, for our own benefit and for every other factor we want to join the network, we need to be able to demonstrate we can get that price down to $3. And that would be a tremendous margin pickup for them. Well, you aren’t going to be able to do that if you don’t make a significant amount of their payments or provide a significant amount of audit data for conforming transactions. We are closing in on that mark. The second gating issue is there is required technology improvement in most factoring management systems able for them to be able to ingest load data before an invoice is created.
No FMS was ever built to do that. We are having to – our own FMS had to be improved to be able to ingest that data – and so one of the things we talk about in this letter is we are thinking through how we can offer to the factoring industry, the ability – some of the technology we have built and the operational expertise we have, so that they can more easily ingest that data so that they can pick up the cost savings that is the brand promise of TriumphPay. It’s the cost savings and the assurance of the validity of the invoice. That is our promise to them. We are delivering on that. It’s a very fair question, Joe. I think it comes in a much faster rate after we achieve that 50% penetration that Melissa alluded to, and we are working towards that.
Operator: [Operator Instructions] Our next question comes from Gary Tenner from D.A. Davidson. Gary, please go ahead.
Gary Tenner: Thanks. Good morning, everybody.
Aaron Graft: Good morning, Gary.
Gary Tenner: Aaron, I wanted to ask your comments in the letter regarding your pessimism or bearishness about the freight industry didn’t sound like it was universal, but certainly your view of the world. As you look at the data from, say, DAT, you’ve seen spot rates for van spot rates move up a little bit from the summer lows. But over the last couple of weeks, after moving a little higher, the van load or load to man ratio seems like it’s want cliff. I mean is that more recent data? Is that kind of really a big driver of your view going forward and the lack of capacity coming out of the system?
