Xynergy Commercial Capital (XCC) has helped commercial businesses bring cash flow forward to grow or even to survive. In a recent transaction a wholesale jewelry manufacturer was growing way beyond his capital resources. Additionally to complicate matters more, he gave his customers up to 120 days to pay. Commercial lenders and factors ran from the opportunity to provide financial resources as the payment terms were way beyond “lending” guidelines. Through aggressive underwriting and risk management XCC entered into a factoring agreement with this business. One thing that XCC specializes in is recognizing “normal.” What do we mean by that? When we examined the usual payment profile of the debtors, we saw that although the payments came in 120- 150 days, we saw that such payments were predictably on time and the invoices were paid in full. Additionally the jeweler carried credit insurance on every customer he has so protracted default or debtor insolvency were mitigated. Business practices were examined and overall, our underwriting showed strong personal assets by the owners and quite extensive experience in this line of business. Sometimes the lending industry’s hard and fast rules can be up for discussion if such discussion makes sense and safety features can be intelligently applied to the transaction.

The builders are now concentrating on multifamily dwellings for rental purposes; accordingly HD’s investment is in line with the new construction trend. Single family homes construction is still at the historically lowest level in two decades. This transaction is the largest in that past ten years and in fact was only superseded in size by one other deal.

HD has a vested interest in its professional builder and craftsmen community which rings the register for 35% of the HD’s annual sales. To support this type of customer HD just introduced a new line of tools specifically for the professional craftsman which are being manufactured by Milwaukee, and DeWalt. Even in this slow recovery of the housing market, HD’s fastest growing division is this “pro” group.

A growing business such as this should be happy with this kind of activity but unfortunately rapid growth is very hard to sustain. It wipes out vital cash flow needed for overhead (particularly payroll and inventory replacement). The owner was told about factoring and reached out to Xynergy Commercial Capital (XCC) for help with her problem. Her personal credit was about average (which in this economic environment is somewhat low), and she had no ability to borrow from a bank. However, factors do not look solely at the applicant’s creditworthiness; most of the decision is based on the payer’s/debtor’s credit profile. XCC was quick to respond and gather up and evaluate the appropriate documents. Her business was making money, and well able to sustain the 4%-5% discount fee charged by XCC for its services.

Within a two week period the transaction was fully underwritten and funded. With this new and very practical way to grow her business, the owner now had more than enough cash flow. She even began to pay her suppliers and vendors early so she could get 5% off on her supplies and component parts.

The bigger your customer the more demanding of cash flow it requires. Xynergy’s accounts receivable funding program is a real solution for a real problem.

How happy most business owners become when the news arrives that Home Depot (HD) wants them to supply product to their stores.

Certainly this type of customer has incredible creditworthiness, moves product very consistently and orders large quantities regularly. What could be the down side?

HD requires that their vendors issue terms on their invoices so that they can take advantage of the “interest free” financing that payment terms provide.

What is the interest free financing one might ask? Very simply you are giving HD the product and they can still use the money owed to you for 30, 60 or even 90 days.

It is essentially your money that they are using which, when one examines the process, is essentially the vendor lending money to HD-NO INTEREST.

As orders increase and the need to provide more products to HD, a small to mid seized business can easily run out of working capital in order to fulfill more orders.

The vendor is now boxed into a corner because 1) the vendor agreed to these payment terms,

2) one cannot call HD and pester them for payments especially if the terms are being followed by HD (or closely adhered to),

and 3) the vendor certainly cannot afford to ruffle the feathers of HD by putting pressure on them for payment even if time has passed beyond the payment terms.

The most common form of help many vendors to the “big box” stores use is a finance strategy called factoring.

Essentially factoring is the sale of these invoices which puts the vendor on almost a C.O.D basis. The vendor gets cash once delivery is made to, and confirmed by HD.

This allows for quick cash flow recovery and inventory or product replacement. The cost of this financing vehicle is a small percentage of the invoices being financed/sold.

Vendors to the big box stores find that they really cannot function well unless they can decrease the time from delivery to customer payment.

Factoring is almost indispensable for these businesses.

New leads are in the news every day. A savvy broker will, first thing every morning, read healthcare related news releases. The number of publications is as vast as the stars in the sky. Each provider sector has its own publication, each major newspaper has a healthcare editor and news. Healthcare insurance companies (carriers) have news items on their websites, new medications and treatments, financial updates and many other valuable pieces of information.

Making use of the news is as simple as sending to prospective clients a current news item that affects them and your solution to the problem. This approach presents you as an individual deeply embedded in the healthcare industry and also provides an answer to a problem. You may also be making the prospect aware of new trends, rules, laws or products of which he/she had no knowledge.

Be professional in your writing so that you give the appropriate credit to news sources, and use quotation marks for words or sentences that are not yours. Ultimately you become a source of news and more importantly, a source for solving problems.