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 Welcome to the first issue of CFC's Monthly Newsletter called "CFC Factor Gazette". While the name is not terribly original, we wanted to publish under a moniker that would give us some identifying mark from other communications you receive from other factors, associations and vendors across the US. We decided to distribute a newsletter for several reasons. The first and foremost is purely self-promotion. We want the name of Commercial Finance Consultants (CFC) to be in front of you on a monthly basis, lest you forget exactly who is the best recruiting firm in the factoring industry in North America. However, we realize for our shameless promotion we must give you relevant and timely information to make it worthwhile to take your valuable time to review our rag, hence each month you can expect the following topics for your perusal; "Sales Tip of the Month", "Operations Tip of the Month", "People On The Move" in Our Industry, "Changes in the Industry", "Industry Events" and of course a few words from me in the President's Corner. . Simply put, our goal is to give you current information to help you in your business and keep you up to date on what is happening in the world of factoring in North America. We promise to keep the newsletters short and relevant to the industry. We are always open to any suggestions of how to improve and if you would like to include your relevant info, then please email us at khill@searchcf.com. Again, thank you for your time and please feel free to contact us if we can help you in any way. |
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| We are currently in the "Stupid Bank Cycle". Money is flowing freely and quite frankly the banks, especially community and regional banks are doing deals that they would not have considered even one year ago. Approximately 9-10 months ago, I was speaking to a community banker who said the regulators had visited his bank and informed them their commercial loan portfolio was too heavily concentrated in real estate because it was felt that the bubble was going to burst on real estate. Therefore, the bank decided to diversify into other types of commercial lending such as more A/R and inventory. I am sure it sounded real smart to the bank for diversification purposes but if they thought the bubble would burst on real estate, they have a rude awakening when it comes to dealing with A/R and inventory. Anyway, this is a sales tip, not a discourse on the intelligence of bankers doing A/R lending, so we shall move on. The nugget is this; Make sure that every time you lose a deal to a community bank or see a community bank do a stupid deal of which they should not, do the following two things,
1. Establish a friendly relationship with that bank (yes the one who just took your deal) and
2. Keep in touch with the client you lost to the bank because they will be back before long.
 Remember that bankers have a herd mentality, hence when they wake up one day and see the rest of their brethren heading for the exit door on a/r lending, there will be a mad rush to follow. The smart salesperson will be there to hand them their coats on the way out the door and collect the deals back they should not have done in the first place.
The poor client is wondering why he should be shown the door of the bank when he did not do anything wrong except to have an A/R lending deal. The sad thing is that he probably did not do anything wrong but when fraud raises it's ugly head, the herd becomes spooked and wants out so YOU be there to help the guy who probably said "Gee, please tell me why I should pay 2% discount when the bank will give me prime plus 1." It was not his fault for wanting the best deal. If you are there when the crisis hits or you have been calling him periodically to check in with him, he will appreciate when he needs to exit the bank quickly versus him feeling bad that he turned you down for the bank, hence he calls someone else. Be smart and keep those type of deals in your sight because they will as be back. |
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In Real Estate, it is Location, Location, and Location;
In Factoring, it is Concentration, Concentration, and Concentration
Most operational professionals agree on the principle that client and/or account debtor concentration is dangerous. It is a risk that we all will accept under mitigating circumstances and/or with additional safeguards in place, but it should be a major consideration when evaluating a deal.
Often overlooked is the concern of industry or geographical concentration. It's great to capitalize on a specialty, be the go-to source for a specific industry. But if you are going to be concentrated within a specific industry, you must take steps to mitigate that risk, just as you would with client or account debtor concentration.
History is a great educator. Oil/gas and the construction industry in the south during the 1980's made these points clear, but 9-11 reinforced nationwide. The travel and hospitality industry, already in a downturn, were so negatively affected that many companies failed. Factoring of furniture, textiles and electronic manufacturing have been greatly affected as production continues to move overseas. And many boring companies failed when the push for fiber optic cable stalled in the face of emerging technology.
 The key is to have your finger on the pulse of the concentrated industries you serve. You must educate and immerse yourself in that industry sufficiently to know it as well or better than your client's do. You should be as knowledgeable about those industries as you are about your own, the factoring industry. You need to know the suppliers, competition, technological advances, affecting economic factors - the works. The best way to avoid or mitigate a problem is to foresee it.
Geographical concentration is simple. Put all of your eggs in a basket located on the Florida coast, the New Orleans bowl, tornado alley, the San Andreas Fault or any small area on planet Earth - all subject to some type of natural disaster - and you may end up with scrambled eggs. There is no way to foresee or control hurricanes, tornados, earthquakes, wildfires, or mud slides. The only way to mitigate this risk is to ensure that you have your eggs sufficiently scattered. |
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Anthony Fortunato was appointed SVP/Portfolio Manager of the new office for Rexford Funding located in Phoenix, AZ.
Celtic Capital Corporation has appointed Joel A. Carlson as VP-Client Development handling the Pacific Northwest area.
Amy Connaughton has joined Omni National Bank as their Sr. Portfolio Manager in their newly formed Factoring Division.
Congratulations to Sam Tork as newly appointed CEO of Bibby Financial Services, Southwest Division located in the Texas. He is joined by Brandon Bauer as Business Development Officer in Bibby's newest region.
Donna Hinrichs joins LSQ Funding group as VP Business Development in Chicago.
Bibby Financial Services, Midwest has announced the appointment of Brian Albach as VP of Business Development in Chicago.
Heather Leitch has joined Bibby Financial Services, Southeast in Florida as Operations Manager.
Lynn Collins joined Bibby Financial Services, Southeast as their VP-Business Development Officer in the Southeast (Carolinas).
Steve Pritchard also joined Bibby Financial Services in the Southeast (Atlanta) as a Business Development Officer.
Congratulations to Richard Olsen who was appointed SVP of Strategic Development at Capital Associates out of Medford Oregon.
Haze Walker joined Rexford Funding as their SVP of Business Development in the new Phoenix office.
Robert Koe Jr. joined GMAC Commercial Finance as Vice President of Business Development in Los Angeles.
Commercial Capital Lending Hires Ed Kennedy as VP Business Development in New North Carolina Office.
CIT Names Stephen Leavenworth to Head of CIT Commercial Credit.
Montcap has promoted Cynthia Aboud to Senior Vice President. They also hired 3 business development managers: Tony Rodrigue-Quebec, Adam Flomen-Ontario, and Doug Helmcken-Alberta.
GMAC Commercial Finance names John Nooney, Jr. the new Southeast Regional Manager. Ernie White has been promoted to Sr. VP/Business development officer and Will Olivencia to Sr. VP/portfolio Manager.
John LaLota has been promoted to president of Sterling Factors Corporation.
Sherry Crowley has joined Summit Financial Resources as a Vice President, representing the Northern California Region.
Larry Powali has joined Crestmark Bank as VP.
Acorn Capital has promoted Paul Seidenwar to President.
Michael McGinty has joined JD Factors as their VP of information technology.
Hennessey Capital announced that Jeff Wright has been hired to the position of First VP-BDO.
John Frankenfield has been appointed as SVP of Fleet One Factoring Division in Nashville, TN.
Peter Cooney has joined Greystone as the EVP and Sr. Risk Manager.
Jeff Kassing has joined Greystone as the EVP and General Counsel.
Thomas G. Siska has joined Greystone as the President effective April 3, 2006 Good luck to Tom in his new endeavor.
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Mr. Richard Worthy has retired from Greystone Metro, a company he has owned and managed for over 20 years. Thanks to Richard for his years of service to the industry and we wish him well in his retirement.
 Wells Fargo & Company and Commerce Funding Corporation (CFC) announced the signing of a definitive agreement for Wells Fargo Bank, N.A. to acquire Commerce Funding Corporation, a privately held factoring company based in Vienna, Virginia, a suburb of Washington, D.C. Terms of the transaction, expected to close in the second quarter of 2006, were not disclosed. Established in 1987, Commerce Funding Corporation provides factoring solutions (accounts receivable purchasing) for companies that provide services to Federal, state and municipal governments and their agencies. Its clients include more than 200 small businesses registered to do business with government agencies. CFC has offices in Vienna, Virginia and Newport Beach, California. "CFC has long-standing relationships with industry leading professional service firms and is known as a leading provider of financing to both emerging and established government contractors," said Martin McKinley, head of Wells Fargo Business Credit, a division of Wells Fargo Bank, N.A. "As the market for government contractors grows, CFC has the expertise to help government contractors with funding for working capital, recapitalization or acquisitions. We look forward to working with CFC's seasoned team in this fast-expanding industry."
 1st Commercial Credit, LLC has announced three new product offerings: FreightBill Cash, InterGlobeCarrier Factoring Credit Lines and InterGlobeCarrier Asset-Based Receivable Credit Lines.
According to Raul Esqueda, founder and president of 1st Commercial Credit, "FreightBill Cash and InterGlobeCarrier financial factoring solutions will be our flagship trade names for transportation factoring worldwide. These products will offer the latest technology, flexibility and quick set-up approvals. 1st Commercial Credit has access to over $2.5 billion in working capital (made available through our affiliate-funding partners located worldwide). Clients can now save a substantial amount of fees due to the competitiveness of our factoring rates."
All financial products offer receivable funding to major transportation industries (including, long-haul truck-load freight companies, intermodal drayage transport, containerized freight, freight-forwarding, local delivery and air freight). |
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INTERNATIONAL FACTORING CONVENTION - www.factoringconference.com
 The International Factoring Convention is just a few weeks away on April 5-8 in Cancun. This is without a doubt the convention to attend for the factoring industry in North America. If you have never been or have not been there for a couple of years, you will be amazed at how much it has grown and how much better the convention gets every year. Of course, we will be there again this year as we have been for every year since 2000. Come by and see us at our booth. On Thursday between 9am-12:30 we will have macaws and on Friday from 8:30am-12:30 we will have a spider monkey there for you to have pictures taken as a taste of the tropics. Again, if you have never been to the convention, it is an awesome place to gain great information from the speakers, breakout sessions, and other factors that are in the trenches everyday as you are. The room block ends soon and it is going to be a sell out, so visit www.factoringconference.com and register today. This is a don't miss event.
NATIONAL FUNDING ASSOCIATION - www.nationalfunding.org
Charlotte Chapter: Luncheon event at The Palm is Tuesday, March 28, 2006 at 12:00 noon. Our speaker is Matt McQuide of Benefit Controls Companies, Charlotte. . Register early for our April 26th 9th Annual Golf Tournament at Olde Sycamore Golf Plantation.
Atlanta Chapter: Third Annual Southeast Financial Expo and Reception At The Georgian Club - May 17, 2006 5:30-8:30 PM. Our speakers will be
Wendy Hagenau and Robert Mercer Of the Bankruptcy and Corporate Reorganization Group of The Law firm of Powell Goldstein, LLP.
See NFA Calendar page for more details www.nationalfunding.org/calendar.html |
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