As a credit union or community bank, you always want to say “Yes” to your valued small business borrowing prospects seeking a line of credit. How can you say “No” and not lose a business client or prospect that does not qualify for traditional bank financing?
Factoring companies work with state and federally chartered institutions to get their business customers working capital through our Invoice Factoring, AR Management, Credit Protection, and Purchase Order Funding Programs. Factors create opportunities for banks helping the non-bankable or under bankable business client.
In the past, there have been small business AR Funding programs for community banks. However, the emphasis was on client acquisition. For those with long memories, the correct focus should have been on risk in all its flavors: fraud, proper verification, dilution, and debtor credit risk to name a few. Factoring companies, like BusinessCash, attribute 20 years of successful AR funding to careful risk assessment. Additionally, they take control (not leaving it to bank personnel) offering their expertise with a historical loss history of less than ½ of 1%.
Factors understand how difficult it is to keep or capture the depository relationship with current or potential clients in this low-interest rate environment. We help you to grow deposits and fee services to customers who you might lose or not capture. This is because they do not meet lending requirements.
Benefits for Your Credit Union or Community Bank
- Alternate sources of financing instead of just saying “No” and helps you retain the client for other bank products. Also, you will have a borrower opportunity when the customer fits your lending criteria in 6-24 months. BusinessCash becomes your de facto “farm system”!
- Have an inter-creditor agreement with your institution to “carve out” and advance against and manage some or all of your borrower’s Accounts Receivable (including SBA 7A).
- Factors require businesses to keep their existing depository relationship with your institution.
- Participate with us at no credit risk or take a referral fee. Your choice!
- You can also brand our products under your banner but outsource all credit, verification, collection, risk and back-office functions.
- Factoring companies can design programs with specificity in mind. What industries dominate your local footprint? You can be a leader in that type Invoice Factoring. For example, BusinessCash has broad experience in funding all levels of Government Receivables and the oil, staffing, broadband, and wine/spirits industries.
- Seasoned and professional account managers professionally and cordially manage your client’s AR.
- Solid balance sheet if you choose not to participate with us.
- Shoulders credit risk with our portfolio insured against bankruptcy/insolvency in regards to your customer’s clients (the account debtors).
- Programs that are great tools to manage NSF’s better and give branch personnel and rainmakers more products to cross-sell.
- Your workout department receives an experienced partner with bankruptcy and DIP financing expertise.
- Have a factoring or ABL Group? BusinessCash can participate in more significant or high concentration deals to mitigate risk.
Benefits For Your Client
- A factors credit/collection services can eliminate bad debt for your Customers. They get a “free” credit manager from them!
- No credit line caps – line limits based on reliable, insurable Accounts Receivable (including SBA 7A).
- Clients can safely offer credit terms to customers thus growing their business by making it easier for their customers to buy from them.
- Client AR is professionally managed with a soft touch.
- Customer DSO’s are historically reduced once they become a factors client.
- Client builds balance sheet and credit to the point that they eventually qualify for conventional bank financing from your institution.
- Our niche is Fast Growth, Startups, Turnarounds, Bank Exiting, and Non or Under-Bankable Relationships.
- Businesses with solid AR from creditworthy customers are the factors’ prospect base.
- Personal credit of the business owner is not an issue; we look at our client’s customer’s ability to pay. Tax liens, client concentration, and other challenging funding situations can be overcome.
- Our Invoice Factoring, Purchase Order Funding, AR Management, and Credit Protection programs are perfect for Fast Growing Clients with B2B or B2G. Especially those with sales of $30,000 – $10,000,000 per month.