“Any time we get a new customer we forward the name [to the factor] and they check them out immediately,” says Tampa Bay Press President John Hedler, who has sold accounts receivable for a decade or more.
“Even one-person operations can benefit from factoring. Stephen D. Lemish, a lawyer in El Cajon, Calif., who specializes in court-appointed work for indigent people”
“You can’t usually bill until a case is over, and that could be anywhere from two months to a year,” Mr. Lemish says, noting that his bills sometimes can run to several thousand dollars. Of factoring as a business tool, he says, “For anybody who has a big cash-flow problem, I would recommend it.”
“Mike Lubansky, a senior financial analyst at private company data provider Sageworks, says factoring is going mainstream: “In the past, some may have seen factoring, because of its higher cost, as associated with troubled situations. But now it’s just another source of financing, especially for funding that businesses need to grow when banks that have tightened credit standards and are focused on preserving capital are not able to lend as much.”
“The days of yesteryear when you could go to your corner bank are over,” said Kenneth Walsleben, who teaches in the entrepreneurship and emerging enterprises department at the Whitman School of Management at Syracuse University. “Small, emerging, growing businesses have few traditional sources to turn to. You have to get a little creative.”
“The attraction for entrepreneurs is often the faster turnaround in fundraising. That is key for high- volume, cash-intensive businesses like Carpella Trading, a $5 million telecom company in Jackson Heights, N.Y., that buys minutes from carriers wholesale and then sells phone cards retail. The company needs a secure line of credit and a steady stream of cash to sustain its 20 percent profit margins.”
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