Factoring
days,” he explains. “I use factors to there are credit issues, we stay away.
meet my immediate operating capital However, traditional lenders are just
needs quickly. I can call a factor — a as reluctant to loan to high-fliers.
good one, one I’ve worked with before Factors are much easier when it comes
— and have money in the bank in to underwriting a loan to a company
a matter of days.” that’s relatively new and showing
Walsleben, whose Syracuse, 20 percent growth per quarter.”
N.Y., company provides
factoring services, does
A source of consistent
the heavy lifting for
operating capital
Mydlowski. And as
So, clients turn to factors when
a long-time, trusted
they need immediate operating capital.
client, DPL Corporation
But speedy delivery isn’t the only
Southeast receives the
reason companies are more frequently
capital it needs when
choosing factoring as part of an overall
it needs it. No hassles.
growth strategy.
No headaches.
J. Theodore Brown Jr., Ph.D., is
However, factors do
president and CEO of Elan Inc., a
not play fast and loose
Washington, D.C., company that
with investor capital,
develops home health care products
much of which comes
and services. Elan works heavily with
right out of their own
state governments — otherwise known
pockets. “We must perform
as bureaucracies.
due diligence, not only
“Some months I’d get a check for
on the debtor account
$4,000, some months $6,000, and
holders, but on the
some months I’d receive $2,000 from
clients as well,”
the state,” says Brown. “It made
Walsleben
planning for future growth impossible,
says. “If
even though we knew we could expand
if we had a more stable cash flow. That’s
when we turned to Ralf, who was able
to smooth out our cash flow and allow
us to plan for the future. Since then,
we’ve been able to plan more securely.”
Ralf Bieler, a principal at Multiple
Funding Solutions Inc., has worked
with Brown and Elan Inc., for more
than three years. “We prefer to establish
a long-term relationship with our
clients,” Bieler says. “Spot factoring —
or one-time-only factoring — is more
expensive than working with a CEO
you speak with weekly.
“Companies come to us for any
number of reasons,” he adds. “In some
cases, it’s because the banks have turned
them down because they don’t have an
TradiTional lenders, like banks, don’t want to take
any risk in this market, so manufacturers turn to
alTernaTive lending sources like factoRs. we don’t
look at our products as loans the way a bank does. we
look at them as investments.
26 I July 08 I Growing Wealth I growingwealthmag.com
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