Factoring News

Leading Factoring Company Acquired by Triumph Savings Bank

Membership interest of Advance Business Capital LLC, one the nation’s leading finance companies in the for-hire transportation arena, has been acquired by Triumph Savings Bank, SSB.  Formerly know as Equity Bank, Triumph is moving out of the restructuring phase and now  looking to grow the institution by acquiring specialty finance companies like Advance Business.

Source: http://www.prweb.com/releases/2012/1/prweb9130992.htm

Factoring Service Demand Drives Record Setting 2011 for Liquid Capitals

Liquid Capital, the only full-service factoring company in the franchising industry, grew by 45 percent in the U.S. from 2010 to 2011, and saw an increase of 20 percent in Canada, following a trend that started in 2009 with a 30 percent year-to-year increase in volume.

The increased demand for Liquid Capital’s factoring services mirrors a worldwide trend that shows factoring volume is up 62 percent over the last five years. Factoring provides businesses across an array of industries with immediate financing secured by credit-worthy account receivables.

“The variety of industries we serve is proof that tightened bank lending restrictions are affecting every type and size of business,” said Brian Birnbaum, founder and director of Liquid Capital. “Statistics show that nine out of ten businesses that apply for a bank loan are getting denied—and that’s why they’re turning to us.”

Source: http://www.pr.com/press-release/386885

Factoring Conferences 2012

FactorFox Announces First Conference April 16-18, 2012

FactorFox, a leading web-based software provider for factoring companies and their clients, will be holding their first ever conference. It is scheduled to occur just prior to the IFA Conference in Huntington Beach, CA.

Registration is open to current FactorFox subscribers, those with trial subscriptions, and anyone considering using the software in their factoring business. Cost is $150 for the first person from a company and $100 per person for additional attendees from the same company. For more information visit FactorFox Conference.

18th Annual IFA Factoring Conference April 18-21, 2012

Want to mingle with over 600 factoring company professionals and 45 exhibitors? Then it is time to make plans for the Annual Factoring Conference at Hyatt Regency Resort in Huntington Beach CA from April 18 -21, 2012.

Hosted by the International Factoring Association, this is the world’s largest conference dedicated to banks and finance companies offering factoring and receivables financing.

There are numerous speakers, round tables, receptions, and even opportunities to earn CPE and CLE  credits.  Sponsors include RMP Capital, Bibby Social, Tax Guard, and other exhibitors.

Registration is available online for $1045 for the first attendee and $995 for additional attendees.  The factoring conference is also open to non-members for an additional $100 per attendee.

For more information visit IFA Factoring Conference 2012

NEW YORK (Dow Jones)–Sears Holdings Corp. (SHLD) shares soared Friday as the retailer was said to be making the rounds to reassure its financing partners that it has the wherewithal and the desire to meet its obligations.

Shares were up 13% to $49.04 in recent afternoon trading, and have now gained 57% this month as positives from new financial plans with vendors mixed with talk the company could be taken over by its majority owner, Edward Lampert.

A Lampert representative didn’t immediately return a call for comment.

The retailer on Friday was said to have talked with a number of its larger factors about a new financial approach after talking first with CIT Group Inc. (CIT), a factor that pulled its funding last week amid uncertainties about Sears’s financial condition. Factors are financing firms that buy receivables from suppliers and collect the money from retailers once the goods are sold.

CIT was reported to have reinstated its financing agreement this week.

Representatives from Sears declined to comment. A CIT spokesman said the company does not comment on customers.

“Sears has come up with a financial vehicle to make factors more comfortable,” said an executive familiar with the arrangement. “There is a lot of renewed confidence in their ability to satisfy their vendors.” The executive declined to elaborate on the arrangement.

Another person close to the matter said an arrangement has been “placed on the table” and it was likely it would soon be put into effect.

Sears had tried to reassure suppliers it has adequate liquidity to operate its business, but that hasn’t done much to allay financiers’ fears, the suppliers said.

The factors were “worried about our financial exposure and that can’t be satisfied by conversations about liquidity,” said an executive at one New York-based factor. “We want shortened payment terms, more transparency into their finances, to know the value of their assets.”

Another executive of a factoring firm said he also had asked Sears for better payment terms and access to more information, but the company wouldn’t agree.

Reassuring vendors and their financial backers will be key to Sears’s future, analysts said.

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com. -Ann Zimmerman contributed to this article.

Read the article at The Wall Street Journal.

With traditional financial institutions continuing their stranglehold on lending to businesses, the factoring industry has experienced a renewed interest from companies seeking additional capital to fuel their growth and maintain even cash flow.

Believe it or not many businesses are doing quite well in the current economic climate despite all of the negative news we read on a daily basis. Companies like Apple and Google continue to have record profits and their stock prices continue to climb.

We’ve also seen an influx of initial public offerings from internet startups such as LinkedIn, Pandora, Groupon and Zillow. With any new IPO, only time will tell how well these companies will perform in the months and years to come. Coming from a person that took a company public a few years ago, get ready for 10-Qs, 10-Ks, earnings calls and every other disclosure required by the Securities and Exchange Commission.

Economic indicators are showing positive signs as well. According to the United States Department of Commerce, the U.S. Gross Domestic Product (GDP) increased at an annual rate of 1.8 percent in the third quarter of 2011. Earnings statistics in Q3 2011 were quite impressive. Based on 443 companies of the S&P 500 index, 76 percent of stocks reported higher earnings per share compared to Q3 2010. Also, 69 percent of S&P 500 topped earnings estimates.

As much as we would like to revel in all of this good economic news, it still needs to be tempered with a dose of reality. The housing market continues to struggle to gain any traction. It is estimated the home values lost over 700 million in 2011. The national unemployment rate is around 8.6 percent with several states such as California and Nevada still in double digit figures.

So what does all of this news mean for the average factoring company?

We take the position that factoring is a valuable tool for businesses in both good times and bad. Whether companies are expanding or maintaining their current structure, accelerated cash flow through factoring is always a viable solution. We advise our clients that if their company’s profit margins allow them to absorb the cost and increase sales, the margins will increase and be a win for both the factor and the client.

Don D’Ambrosio is the president of Oxygen Funding, Inc., an invoice factoring company located in Lake Forest, California.

For more information, he can be reached at don.dambrosio@oxygenfunding.com or you can visit his company’s website at www.oxygenfunding.com.

The Accounts Receivable Factoring Alternative

Fortunately, there is an excellent alternative underutilized financing option that can keep a company’s cash flow going – private duty care accounts receivable factoring. As opposed to a more tradition form of financing, such as a small business loan, private duty care accounts receivable financing is not a loan at all. In this type of funding arrangement, a factoring firm purchases the rights to the private duty agency’s invoices, advances cash immediately on those invoices and then collects on them.

The best part about accounts receivable financing is that credit decisions are based on the creditworthiness of the private duty agency’s customers (i.e. Medicaid, VA or other governmental agency,) rather than the agency itself or the business owner’s personal credit. This allows the business owner to leverage the higher quality of their customers’ credit in securing funds. (NOTE: Private duty care factoring companies cannot purchase invoices that are payable directly by individuals because evaluating the credit of an individual is far more difficult than leveraging the government’s creditworthiness).

Keep in mind that many private duty care factoring companies can also work with start-up companies. In addition, small and large companies that are going through a rapid growth phase can also factor their private duty care receivables. What’s more, many factoring firms are able fund receivables without requiring the private duty agency owner to sign a personal guarantee, which lets the owner protect his/her personal assets. What’s more, private duty care factoring arrangements tend to provide generous lines of credit because factors are able to set credit limits and increase their funding as their clients’ businesses grow.

So How Does Private Duty Care Factoring Work?

Let’s say that the owner of a private duty care agency sent employees into an elderly person’s home to assist that person throughout his/her daily activities. The agency owner then bills Medicaid for the services provided. Because it takes time between when the agency owner sends the invoice and when Medicaid actually pays for the home care services, the agency owner can sell that invoice to a private duty care factoring firm and receive roughly 80 percent of what was invoiced immediately. In turn, Medicaid payments are sent to the factor. Once the factor is paid, the firm will deduct its fees and return the balance back to the agency owner.

Factoring firms come in all different shapes and sizes, and they are spread out all over the country, and each offers their own twist to the invoice funding model. Therefore, it’s important to take the time to research factoring companies and select the best one to meet your private duty home care agency’s financing needs.

In a time when more banks and credit card companies are saying “no,” private duty home care agency owners should look into accounts receivable factoring as a viable alternative financing option.

Nikki Flores is a Consultant Liaison for PRN Funding, LLC, which is an extraordinarily focused niche player in healthcare factoring.

PRN Funding exclusively factors the accounts receivable of companies that sell goods or provide services to healthcare providers.

Sooner or later, your efforts are going to turn to the Internet to find ways to leverage new clients.

In the beginning you will be faced with two big options…FACEBOOK® or GOOGLE+1™.

There seems to be a lot of confusion out there on whether your business should be using Facebook or Google+1 as a way to bolster up some marketing efforts.

Although both Facebook and Google+1 should have a place in your efforts (you don’t have to pick just one), most likely, one outshines the other as a good fit.

Here are a couple things to pay attention to when marketing your factoring company online.

If you are looking for interaction, you want Facebook.

But this assumes TRUE interaction. In other words, just because you have 3000 Facebook fans doesn’t mean they are reading anything you are putting up.

Are they leaving comments?

Are they sharing your posts?

If they are leaving comments, hitting the “like” button, and interacting, Facebook may be well suited for you. You just need to find a way to convert them to clients. If there is not a lot of interaction, you may just be wasting your time.

Fans work well when the “page” is a product or celebrity – not so much a company. A “company” is just too broad.

For example, how many raving fans would there be if I had a fan page on “Farms?” I am sure I would have some. Now, how many fans would I have if my page were the subject of “bacon.” – lots I imagine (who doesn’t like bacon) – and it is way more targeted.

The other downside on Facebook is that your efforts are limited to your ability to keep the content coming – and it won’t, for the most part, help you in the search rankings.

So, if you have interaction, go with Facebook. Otherwise think of Google+1.

Are you looking for “hands off” marketing?

Google+1 has two big advantages over Facebook when it comes to increasing your Internet exposure (and hopefully factoring business).

One, it does not require an ongoing amount of content from you. If people click the “+1” button their additional “circles” will be in on the action. It doesn’t require more content from you or more people “sharing” like Facebook.

Secondly, that little plus button can help you in the search rankings. Although Google does not formally release all the ins and outs behind their programming, one thing is clear: the more people “+1” your site, the higher up you may get in the search rankings.

As popular as Facebook is, it has yet to make a big “business” impact. Many Fan Pages are dead on arrival and do nothing for actual business.

Google +1 seems more in the thick of it when it comes to business. If someone is searching for your company the +1 can give you some extra credibility (Facebook can’t really help you there).

(Note: FACEBOOK is a registered trademark of Facebook, Inc. and GOOGLE is a registered trademark of Google Inc. This article was written based on research and professional experience.  This author, company, and website are not endorsed by or affiliated with either FACEBOOK, Inc. or GOOGLE Inc).

So, who is right for your factoring business?

As we mentioned in the beginning, we really thing you need to keep both on your radar…but for now, we give the edge to Google +1 if you are talking about getting more business.

Facebook is personal. But until users can separate business from personal on Facebook (as in two separate accounts) the business side just seems to be an after thought.

Typically, when I write these monthly articles for Factoring Investor, the discussion focuses on the factoring industry and ways for you to market and manage your business.

Last month’s publication, “A How to Guide for Factoring Brokers”

was a smashing success with requests for the guide from factoring brokers from all parts of the world.

We also received excellent feedback on our social media marketing for the factoring business article that ran last summer. For this year end piece I’d like to keep it simple and say thank you to the people that helped us in 2011:

• My Family – Thank you for your support and strength for without you none of this would have been possible. Thank you believing in a dream but more importantly, believing in me.

• The Oxygen Funding Team – Thank you for your dedication and for always striving to be the best you can be. No matter what the challenge was, you were always willing to step up and get the job done with no questions asked.

• Our Factoring Clients – Thank you for making our company the thriving success it is today. Double thanks for making our jobs a pleasant experience every day we come to work.

• Our Friends at Factoring Investor – A special thank you to Tracy and her team at Factoring Investor for allowing me to do this monthly piece that gives me the opportunity to spout whatever comes to mind with the hope they will find it useful and informative for their audience.

Finally, I am honored and grateful to you, the readers, who so often call and email me with great feedback. Whether it’s a comment on a past article or a suggestion for a future piece, I can always count on you to shed some additional insight on topics that are so often overlooked on my part.

Best wishes to all for a healthy and prosperous New Year.

Don D’Ambrosio is the president of Oxygen Funding, Inc., an invoice factoring company located in Lake Forest, California. For more information, he can be reached at don.dambrosio@oxygenfunding.com or you can visit his company’s website at www.oxygenfunding.com

To help alleviate your concerns and to educate your customers about medical staffing invoice funding, consider the following:

Medical staffing factors only work with agencies who qualify for credit.

Similar to getting a bank loan, staffing agencies go through due diligence before an invoice funding company will agree to purchase their receivables. If your company is able to secure financing, it is a positive sign that you operate a stable, growing business. Moreover, the ability to factor is dependent on the creditworthiness of your customers, not your own.

Medical staffing invoice funding is beneficial for both you and your customers.

Your customers are most likely accustomed to taking 30, 60 or even 90 days to pay for your staffing funding services. By factoring, you can maintain a “business as usual” relationship – your customers can continue to utilize your medical personnel and have time to pay for their shifts. The only difference with medical staffing invoice funding is that your company benefits from having money today, in order to more readily satisfy current obligations, while still experiencing growth.

Factoring is a smart business move for growing medical staffing companies.

A business most often uses financing obtained through the sale of receivables to expand and take on larger contracts, without compromising the quality of their services. By getting money sooner than later, your staffing business has the resources to focus on critical success issues – sales, operations and growth – while still meeting its demand.

Many of your customers may already deal with factors and may not be aware of it.

Factoring is one of the oldest methods of providing working capital to help businesses solve their cash flow needs. Credit cards transactions are actually the most common form of factoring used every day. Many hospitals and physicians’ practices factor their medical receivables due from insurance companies and therefore are already familiar with how factoring works and why companies choose to do it.

Educating your customers about why you decided to obtain staffing funding services should eliminate many of their concerns, and invoice funding firms are available to help explain your new financial situation. For too long, factoring was only available to large, multi-billion dollar corporations. Now there are specific invoice funding firms that provide medical staffing funding services to companies like yours, so you can enjoy both the perception and the reality of being a growing, profitable company.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the medical staffing invoice funding market place. Through a process known as factoring, PRN Funding provides staffing business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding http://www.prnfunding.com provides staffing companies with flexible and immediate access to capital.

Article reprinted with permission by PRN Funding, LLC.

With costs going up, consumers were going to have to pay more -  painting a potentially gloomy picture for holiday spending. But did this actually happen and what about the cost of factoring during this period?

(8/31/11 Source: Apparel) – A new survey of consumer goods manufacturers and importers shows that the dual trends of weak inventory sales and rising prices paint a dark picture for the upcoming holiday season. As of July 31, 2011, during which time most holiday orders are placed:

• 83 percent expect prices of consumer goods to rise this holiday season, with one-third saying prices could rise as much as 10-15 percent
• To deal with the rising cost of goods and the gloomy economic outlook, 89.4 percent expect retailers to rely heavily on discounting to move merchandise
• 64 percent of manufacturers and importers reported that retail orders are the same, or less, as compared to last year (2010)
• 30 percent of respondents reported that the increased costs to manufacture and ship goods will be passed along to consumers as compared to only 20 percent of respondents passing increased costs along to the consumer six months ago

“Inflation is coming and the era when retailers and manufacturers absorb price increases to protect consumers is over. Our manufacturing clients are telling us that prices for clothing, bedding and other soft goods will rise this holiday season. However, all hope is not lost, as one-third of those surveyed believe that despite current market challenges, retailers will increase inventories this holiday season,” said Andrew Tananbaum, executive chairman of Capital Business Credit.

Additional findings of note:

• Nearly three-fourths (73 percent) of respondents expect sales this holiday season to be the same, or weaker, than last year
• 60.5 percent believe that an increase in the cost of goods will be spread across  consumers, retailers and importers
• Half (53 percent) cited that due to the increase in raw materials and logistics costs, retailers are asking for longer payment terms during the holidays indicating that suppliers are forced to become more flexible with respect to payments and contract terms

These changes will affect margins across the board, as an overwhelming 95 percent of respondents indicated that their margins would be affected in some way.

The Global Retail Manufacturers and Importers Survey, conducted by Capital Business Credit LLC (CBC) (www.capitalbusinesscredit.com), a global integrated financial products and services company that serves the retail sector, surveyed 80 manufacturers and importers in the apparel, housewares, home furnishings, fashion accessories and furniture industries, who manufacture some, if not all, of their products in China, India, Vietnam, Bangladesh and Pakistan. The survey was conducted the week of Aug. 1, 2011.

Cotton

Almost all (95 percent) of respondents saw an increase in the cost of raw materials over the last 12 months. To combat the increased cost of raw materials, 33 percent will be replacing some of the cotton content in their products with rayon (60 percent) or Lycra (40 percent). More than a quarter (26.7 percent) of those who have high-cotton content products will vary the cut or design of their products to use fewer raw materials. Respondents also noted that cotton prices will directly affect consumer prices this holiday season.

Labor

Approximately 44 percent of survey respondents plan to move some or all of their manufacturing out of China due to the increased cost of labor. Almost three-fourths (71.4 percent) of those respondents are considering relocating some of their production to Vietnam.

Logistics

The CBC survey also identified that the increased cost of logistics – due in large part to the rising cost of oil – is a major cost concern (92.2 percent) for importers and manufacturers. Almost two-thirds (66 percent) of respondents said that logistics costs have increased by more than five percent in the last 12 months with nearly 58.3 percent of respondents citing an increase of five percent or more due to the current cost of oil.

“The rising costs of raw materials, labor and logistics only magnifies the existing problems facing manufacturers, importers and retailers. On a bright note, looking forward to the Spring season, we anticipate prices to decrease at retail, due to forward looking data on the decline in cotton prices,” said Tananbaum.

The good news is that consumer shopping on Black Friday last week surpassed all records with sales up over 6% (Source MSN.com).

So even if there was a slight increase in production cost (that may not have been passed on to the consumer) the volume should make up for any factoring costs incurred by companies selling invoices.

In the end, consumers were sick and tired of staying on the sidelines (spending wise) and this gave business a good hit at the end of 2011.

The guide contains information on industry related topics including, benefits of factoring, factoring vs. bank financing, sample transactions, targeted industries, qualifying prospects, overcoming objections and more.

The response was absolutely overwhelming!

Within a day of entering the post, we received requests from brokers in the United States, Canada, Mexico, Great Britain, Slovenia, New Zealand, China, Saudi Arabia, Africa, and China. I was floored that so many people from around the globe knew what factoring was and wanted to learn how to participate in the industry.

For those of you that missed our guide and are interested in learning more about brokering or just the factoring industry in general, here are a few key points that we feel you might find useful.

Factoring Defined

Factoring refers to an arrangement whereby a factor purchases an account(s) receivable from a business at a discount to the face value of that receivable. The factor earns a fee based on the number of days that the receivable remains unpaid, i.e., the longer the receivable remains unpaid, the larger the fee incurred.

Effectively, the business is no longer dependent on the conversion of accounts receivable to cash from the actual payment from their customers, which takes place on typical 30 to 90 day terms. Businesses benefit from the acceleration of cash flow.

Today, the most common form of factoring fits conveniently in your wallet – the credit card. Each time a merchant accepts a credit card, the merchant (seller of the goods) is giving up a portion of the total sale to the card issuer (typically a bank) who in turn, eventually collects from the consumer.

Benefits of Factoring Invoices

Any company, whether starting out, experiencing a growth phase, or mature in years needs good cash flow. When a business sells a product or service to a customer, that business provides an invoice stating the products or services sold and the amount the customer has agreed to pay. It is an IOU from the customer to the business. Sometimes these invoices are paid immediately but quite often they are paid anywhere from 7 to 120 days.

There are a number of benefits derived from the use of factoring:

• Immediate Access to Cash

• Take Advantage of Early Payment Discounts

• Eliminate Overhead and Invoice Processing Expenses

• Build Your Credit Rating

• No Liability on your Balance Sheet

Advantages of Invoice Factoring vs. Bank Financing

Factoring is not a “loan” – it is the sale of an asset.

A loan places a debt on a balance sheet, and it costs interest. By contrast, factoring puts money in the bank without creating any obligation to pay it back. Thus having more cash on hand and fewer receivables strengthens one’s balance sheet.

Loans are largely dependent on the borrower’s financial soundness. With factoring, it is the soundness of the client’s customer that matters most – a real plus for new businesses without an established track record.

These are just a few key points that are covered in our “Guide to Wholesale Factoring. For those new to the factoring industry there are many associations, professionals and publications that provide educational guidance and useful information about the factoring industry.

While you’re at it, check out this publication for great insight from professionals giving you their perspectives and experiences on a wide range of factoring topics. This is a great time to get involved in the factoring industry with many resources available to new brokers.

Don D’Ambrosio is the president of Oxygen Funding, Inc., an invoice factoring company located in Lake Forest, California or online at www.oxygenfunding.com.

For a complimentary copy of his How To Guide for Factoring Brokers and to register as a broker please email don.dambrosio@oxygenfunding.com. 

Banks are not approving loans like they used to and recurring cash flow challenges for medical supplies companies are not going away.

Medical supplies factoring has been evaluated in the past, but this alternative financing option is becoming a popular and convenient solution to cash flow problems.

Most medical supplies companies do not receive payments for their goods until weeks after they have been delivered. In fact, a common cycle occurs when companies need to order additional products to ship out to their customers before they have been paid by those same customers.

By factoring their receivables,these companies can improve their cash flow tremendously, giving them enough cash to buy new inventory regardless of when their customers pay.

Factoring is Not a Bank Loan

Factoring offers a huge advantage for companies because unlike a bank, the factor’s main concern is the credit rating of the customer who is responsible for paying the invoice. In addition, the only collateral used by the factor is the receivable, whereas a bank would often require personal collateral to secure a loan. Also, many of factoring firms do not require long-term commitment. Therefore, a company can factor its receivables for as long as it likes.

Factoring Promotes Business Growth

Another advantage of factoring is that it alleviates the hassles of the collections process. Once the company sells the receivable, the collection process can be handled by the factor. Medical supplies companies don’t have to worry about making collections calls, following up on skipped invoices or hunting down missing documents. This saves time and money and allows companies to allocate resources to more important day-to-day operations of the business.

Factoring is Easier to Find than a Bank Loan

There are thousands of factoring companies to choose from, so finding a company that will factor medical supplies accounts receivables is easier than ever. For example, type ‘medical supplies factoring’ into a search engine, and a slew of factoring companies will show up in the results. While there are many factoring companies to choose from, they differ on a large scale. Some may serve an array of industries, while other only factor invoices for a specific industry. Some operate nationally, while some focus their attention in one geographic region. Of course, there will also be many different advance rates and factoring fees amongst factoring firms.

With the current economic climate, it’s likely that more medical supplies companies will turn to factoring firms for financing. It allows start-up companies to develop and helps veteran companies continue to thrive.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the medical supplies factoring market place. Through a process known as factoring, PRN Funding provides business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding provides medical supplies companies with flexible and immediate access to capital. We give you the freedom to factor what you want, when you want, whom you want, for as long as you want. Prior to founding PRN Funding, Mr. Cohen was an executive officer of The MRC Group, a national provider of Medical Transcription Services. Contact Philip Cohen at toll-free 866.776.5407 or via email at pcohen@prnfunding.com. Please visit PRN Funding, LLC on the web at http://www.prnfunding.com/

Article reprinted with permission by PRN Funding, LLC.