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A PUBLICATION OF THE INTERNATIONAL FACTORING ASSOCIATIONDECEMBER 2019 VOL 21 No. 6VISIONFrom Blackberries to Smartphones: A Decade to RememberThe Big SqueezeALSO INSIDE:California Usury Laws: Still Clear as MudStandardizing Your Data Quality2020 Factoring Conference: Sights and Sounds of Nashville
TABLE OF CONTENTSDECEMBER 2019 VOL 21 No. 6THREE STEPS TO STANDARDIZE YOUR DATA QUALITYBy Matthew DebbageTHE GREAT SQUEEZE FACTORING IS CHANGING, AND WE FACTORS MUSTCHANGE WITH ITBy Robert MeyersFROM BLACKBERRIES TO SMARTPHONES:AS THE NEW DECADE DAWNS, FACTORS ADJUST TO CHANGEAND SERVE OUR CLIENTSBy Ryan JaskiewiczTHE 2020 FACTORING CONFERENCE: DON’T MISS THESIGHTS AND SOUNDS OF NASHVILLEBy Terri BakerCOLUMNSWHAT’S NEW AT IFACALIFORNIA USURY LAWS: STILL CLEAR AS MUDBy Steven N. Kurtz, Esq.ADVERTISER INDEXCapitalOne.IBCFactorFox. 5HubTran. IFCIFA. 13, 18, 25, 27MotherFund.7Utica Lease.BCThe Commercial Factor DECEMBER 2019 1
FROM THE MANAGING DIRECTORBY HEATHER VILLAWhere do you see yourself in 10 years? What are you doing to get there?Technology makes change inevitable and easier, but how are you going touse that change to adapt and grow?As 2019 comes to an end and another decade begins, Ithink about how far the International Factoring Association(IFA) has come over the past 10 years. In 2009, the IFAhad roughly 325 corporate members, and the IFA AnnualConference had about 500 attendees. Fast forward totoday and we have 500 corporate members and morethan 850 attendees at our Annual Conference. Our growthwas brought on by many changes. Adapting to thesechanges, listening to our members and providing opportunities for them to grow has strengthened the industry as awhole and contributed to what we are today.The 2020 IFA Annual Conference aims to prepare you andyour business for the changes that lie ahead and providesa strategy to help you use those changes to grow. Some ofthe topics at this year’s conference are: The Big Shift: How Customer Behavior & Technologyis Changing the Future of Factoring Digging for Hope: Turning Wine to Water and OtherModern-Day Miracles What Happens Next? Looking Backwards to See intothe Future Rise of Fraud in the Digital Era Culturetopia — The Ultimate High-PerformanceWorkplace Learn from History or be Doomed to Repeat It A Look into the Future of Factoring Technology Current Topics in Transportation Factoring &Driverless Trucks Report form the Courts Acquisitions & Future Planning Supply Chain Finance Interactive Legal Panel at Lightning Speed Tech 101 for Factors Factoring 101 Risk Management in Cross-Border Factoring Canadian Legal Panel Roundtables including: Women in CommercialFinance, Senior Executives, Young Professionals,Operations, and Small Factors2 The Commercial Factor DECEMBER 2019The best way to adapt to change is to have support fromothers and expand your peer-to-peer connections. Theonly way to fully understand the internal challengesfactoring companies face is to connect with others andlearn from their experiences. The IFA Annual Conferenceprovides an opportunity to build meaningful relationshipsthat will help your company thrive in the turbulent timesahead. The conference will take place April 22 to April 25 inNashville, TN. More information can be found atwww.factoringconference.com.Also, over the past decade, the American FactoringAssociation (AFA) has been helping you prepare for thefuture by monitoring legislation that can directly or indirectly affect factors. The AFA was formed as the educationand advocacy arm for our industry in 2009. During itsfirst decade, the AFA has become a meaningful success.It has established strong bipartisan contacts at all levelsof government, ensuring those contacts understand ourindustry and how we differ from other industries that havecome under fire recently. If you have not supported theAFA, please consider doing so today. More information canbe found on page 18 and at www.americanfactoring.org.In addition to the Annual Conference, the IFA offerswebinars, training classes and meetings to supportthe factoring industry. Some of our 2020 offerings arelisted on our website at www.factoring.org. Check backfrequently to find more class announcements. The IFAstrives to keep you informed of current events, educatemembers with quality training and help you prepare forthe changes ahead to help you grow and succeed in yourbusiness during the next decade and beyond.
NEWSTHE INTERNATIONAL FACTORING ASSOCIATION6627 Bay Laurel Place, Ste CAvila Beach, CA 93424MAILING: PO Box 39Avila Beach, CA 93424-0039805-773-0011EXECUTIVE DIRECTORBert GoldbergPUBLISHED BYThe International Factoring AssociationEXECUTIVE EDITORSLisa Rafterinfo@commercial-factor.com610-213-9105Nadine Bonnerinfo@commercial-factor.com484-253-2504Rita TISING SALESSusie 459-3016ADVISORY BOARDChris AbeliThrive Funding, LLC, Roy, UTJohn CummingsACS Factors, Upland, CATania DanielENGS Commercial Capital, Birmingham, ALKee KimFinance One, Inc., Los Angeles, CAPaul SchuldinerRosenthal & Rosenthal, New York, NYNel SomarribaNew Century Financial, The Woodlands, TXGerry WawzonekCapital Now, Calgary, AB, CanadaKevin WoodChesapeake Bank, Cash Flow Division, Gloucester, VAThe International Factoring Association’s (IFA) goal is to assistthe factoring community by providing information, training, purchasing power and a resource for factors. The IFA provides a wayfor commercial factors to get together and discuss a variety ofissues and concerns about the industry. Membership is open toall banks and finance companies that perform financing throughthe purchase of invoices or other types of accounts receivable.The Commercial Factor is published bi-monthly by the International Factoring Association. To subscribe, please emailinfo@factoring.org.The Commercial Factor magazine invites the submission ofarticles and news of interest to the factoring industry. For moreinformation on submitting articles or advertisements,email news@factoring.org, or call 805-773-0011.INDUSTRY NEWSCanadian Fraudsters Fleece Finance Firm of 300KA Hamilton couple who systematically ripped off more than 300,000from a local finance company found their cunning plan quickly became adead duck of substandard deception.Sanita Devi Singh, 39, and Vimlesh Vikash Chand, 39, were sentenced tonine months and 11 months of home detention respectively when they appeared in the Hamilton District Court on four charges each of causing lossby deception.Singh had pleaded guilty to the charges while Chand was found guilty by ajury following a trial presided over by Judge Robert Spear. The couple wererunning a business importing goods that they then sold to other businessesin the local Indian community, when they began employing the services of asmall factoring company that they decided to fleece.From August 2015 to February 2016, when their duplicity was discovered,the couple and two accomplices from their home village in Fiji made justover 300,000 in illegally-obtained invoice funds.Their sentencing was delayed more than once to allow the couple — whonow live in Papakura — to obtain funds to pay back their victims the outstanding amount of 191,823 they still owed, which Judge Spear ordered bepaid at no less than 4000 per month.A family home in Fiji is now on the market and if this was sold, and the reparation paid in full, the judge said he would entertain a possible reduction intheir home detention time.TAB Bank Completes 46MM Acquisition of BAMTAB Bank has finalized the acquisition of BAMFi’s 46 million BAM Capitaldivision.This is TAB Bank’s fourth successful completed acquisition of a workingcapital loan portfolio. TAB will retain the operations and staff at BAM’soffice in Dallas.BAMFi, a software provider for the secured lending industry, will continueto own FactorCloud, its proprietary, all-in-one, cloud-based secured lendingsoftware solution.Republic Acquires Continental and Fast A/R FundingRepublic Business Credit expanded its business finance platform with theacquisitions of Continental Business Credit (CBC) and Fast A/R Funding.Republic partnered with CBC’s CEO, Matt Begley, to transfer substantiallyall of its assets to form Republic’s new West Coast office. Republic is expanding its national platform through a dual strategy of organic growth andcomplementary acquisitions that add new products, talent and geographicexpansion. Republic’s new products will include traditional non-recoursefactoring, asset-based lending and a technology-enabled small ticket factoring platform to add to its ledgered line of credit and factoring offerings.Stewart Chesters continues as the CEO of Republic, with Robert Meyers aspresident and Matt Begley joining as COO.Republic has made additional personnel changes to support the acquisitions. Jason Carmona was promoted to EVP, Western Regional Manager,tasked with building out a new business team that supports its growthgoals. Vanessa Johnson has joined the team as EVP, Asset Based Lending.Republic will remain headquartered in New Orleans, with offices in LosAngeles, Houston, Chicago, Nashville and Minnesota.The views expressed in the Commercial Factor are those of theauthors and do not necessarily represent the views of, and shouldnot be attributed to, the International Factoring Association.The Commercial Factor DECEMBER 2019 3
NEWSCrestmark Equipment FinancePresident Joins ELFA BoardThe Equipment Leasing and Finance Association has named Crestmark EquipmentFinance President Thomas R. Rutherford toits board of directors for 2020.An active member of ELFA, this is Rutherford’s first time serving on the board of directors, where he will serve one three-year termon a staggered basis.ELFA’s board of directors develops and setspolicy, provides for resources, adopts thestrategic plan and budget, and monitorsoverall operations for the association. Theboard also appoints an executive committee,nominating committee, investment committee and audit committeeRutherford joined Crestmark in 2014 throughthe acquisition of TIP Capital, an equipmentleasing and finance company which he cofounded in 1999. He has more than 30 yearsof experience in sales, marketing and operations, with more than 25 years of experienceCANADA CHAPTEREVENTS 2020February 11Economic OutlookMarch 10Cybersecurityin technology financing. Prior to TIP Capital,Rutherford was the director of syndicationsfor AT&T Capital Systems Leasing, where hewas responsible for the placement, syndication and management of a diverse portfolio ofequipment financing transactions. Rutherfordalso has held Series 7 and a Series 63 Securities licenses.Crestmark Launches HealthcareFinancial Services DivisionCrestmark has launched a new division offering medical accounts receivable financing tobusinesses in the healthcare industry.The division will be led by Ray Zilke, first vicepresident, division manager based in Franklin,TN. Zilke will report to Steven Tomasello,Crestmark executive vice president.Zilke joined Crestmark in November 2005 asan account executive for the Midwest regionat Crestmark’s Troy offices. In 2010, he wasrelocated to Tennessee, where his contributions played an integral role in reorganizingthe Transportation Services division. In 2012,Zilke was promoted to first vice president,underwriting and portfolio management forthe Transportation Services division. Underhis leadership, write-offs were reduced, andportfolio performance improved to top tier.Zilke served as vice president, asset-basedloan officer and special assets loan officerat GMAC Commercial Finance. Earlier in hiscareer, he served NBD Bank as assistant vicepresident, field exam team leader, as well asloan officer.INDUSTRY TRANSACTIONSApril 22Chapter Reception at the IFAAnnual Conference4:30pm–5:30pmOmni Nashville, Nashville, TNPinnacle Provides 995K Facility toAerospace CompanyMay 5Factoring & TechnologyThe company has been an industry leader for40 years and has the largest privately heldinventory of forming equipment in the world.June 9Business Transactions & FactoringThe line of credit will be used to supplementcash flow during crucial times of need, meetpayroll demands and increase sales andproduction.Meetings Location:Mississauga Living Arts CentreScotia McLeod Room4141 Living Arts DriveMississauga ON L5B 4B8For more information, callOscar Rombolà at (905) 603-6284or emailorombola@accutraccapital-itc.com.Visit IFA Canada’s website atwww.FactoringAssociationCanada.com.4 The Commercial Factor DECEMBER 2019Pinnacle Capital Finance has funded a 995,000 accounts receivable line of creditfor a company that manufactures casings,sheet metal and extruded products for theaircraft, military and space industry.BFS Canada Provides 1.8MMFacility to Emergency ReliefCompanyBibby Financial Services provided an 1.8 million factoring facility to an emergency reliefrestoration services company specializing inremedying damages on buildings caused byfloods, fire, mold, and asbestos.Previously funded by another factor, thecompany contacted BFS looking for bettercustomer service and lower rates. With BFS’factoring facility, the client was able to retaina significant contract and fund its day to dayoperations as the business grows.IFA CALENDAR OFEVENTS 2020January 23–January 242020 Presidents & SeniorExecutives MeetingApril 22, 2020Factoring Essentials Training ClassOmni Nashville, Nashville, TNApril 22–252020 Annual FactoringConferenceOmni Nashville, Nashville, TNJune 8-9The Law and Business ofFactoring Training ClassPlanet Hollywood, Las Vegas, NVJune 11-12Account Executive/Loan OfficerTraining ClassPlanet Hollywood, Las Vegas, NVIn addition, BFS North America extended anadditional 1 million to clients, primarily in thetransportation industry in October 2019.White Oak Agents Facility for VirtusPharmaceuticalsWhite Oak Healthcare Finance acted as solelender and administrative agent on a seniorcredit facility for Virtus Pharmaceuticals, aportfolio company of Linden Capital Partners.Proceeds were used to refinance existingdebt and provide liquidity for strategic initiatives and working capital.Virtus is a specialty pharmaceuticals company.Gibraltar Provides 8MM Facility toSports Equipment CompanyGibraltar Business Capital provided an 8million line of credit to a sports equipmentcompany.The company was referred to Gibraltar bya turnaround consultant. The client was anindustry-leading retailer/e-tailer of new andpreowned golf equipment, shoes, appareland accessories. The company had been inbusiness selling sports equipment to consumers through its multiple ecommerce sites.Despite a good track record of sales, thecompany had run into temporary setbacks inbusiness performance. In addition to seasonality associated with its product mix, decliningmargins on discontinued products and shiftsin product demand required the company tomake changes to its product mix strategy.
InterNex Provides 1.5MM Revolverto Grocery ImporterInterNex Capital completed a 1.5 millionrevolving line of credit for a grocery importer.The company imports and distributes foodsfrom Europe and Asia into the U.S. Thecompany needed working capital to supportcontinued growth and expand customer base.InterNex provided a flexible revolving line ofcredit powered by the Velocity technologyplatform’s real-time borrowing base.Encina Provides 30MM Revolverfor Coal ProducerEncina Business Credit provided a 30 millionsenior secured credit facility to a companythat produces coal for blast-furnace steelproduction.The facility consists of a revolving line ofcredit based on accounts receivable andinventory.Loan proceeds will be used to provide a dividend and to support working capital, capexand other corporate requirements.Utica Leaseco Provides 750KFacility to Medical CompanyUtica Leaseco provided a 750,000 truelease secured by machinery and equipment toa medical company based in California. Uticaprovided the working capital for this companyfor new purchases.Austin Provides 5.5MM Facility toOEM SupplierAustin Financial Services closed a 5.5 millionaccounts receivable and inventory revolverand M&E term loan to a tier 1 OEM supplier ofplastic and metal components located in theSoutheastern U.S.The company had outgrown its line of creditand was to looking to maximize the value ofits assets and improve its liquidity position.Proceeds from AFS’ revolver were used to payoff the company’s existing line of credit, fundongoing working capital needs, and providenew capital to support projects for long termgrowth.FactorFox Software#1 Cloud Factoring Software Since 2004www.factorfox.com877-890-1897Beautifully Designed & User FriendlyPowerful For Any Size Factoring Firmrequired inventory via letters of credit, whichwere issued in EURO-denominated currency.The PO finance facility also funded all freight,duty and logistics costs. With Rosenthal as apreferred strategic partner, the company didnot require overadvances, nor would it needto raise additional equity and dilute ownership of the business, as the company haddone in the past.Gateway Completes TwoTransactions Totaling 1.5MMGateway Trade Funding provided a 1 millionPO facility to a Canadian linens distributor anda 500,000 facility to an athletic equipmentsupplier.Rosenthal Provides 1MM POFacility for Women’s FootwearDesignerThe Canadian company sells specialist towelsand linens imported from India to hotels. Thecompany needed a PO facility to close its cashflow cycle. Gateway was able to supply a letter of credit to its Indian supplier. The facilityhas helped the Company grow further than itsoriginal projections.A New York- and London-based designer ofwomen’s footwear was experiencing rapidgrowth due to an influx of orders from bothits U.S. and European customer base. Thecompany’s European-based factories werelooking for either deposits or payment assurance before they could begin production.Gateway also partnered with a factoring company to help provide a 500,000 PO facilityto a three-year-old Midwest-based winterathletic equipment and apparel company thatsupplies goods to outdoor retailers. The company’s anticipated growth potential (100%year on year historically) was restricted dueto a lack of working capital to pay suppliers,despite high gross profit margins. The POfinancing facility provided a letter of credit toits Chinese manufacturer.Rosenthal & Rosenthal completed a 1 millioninventory production finance deal for a wellknown designer and importer of women’sfootwear.Rosenthal’s purchase order finance facilityallowed the client to obtain goods frommultiple European suppliers by funding theCrestmark Tops 40.1MM in Fundingto 92 FirmsCrestmark provided more than 40.1 millionin commercial financing to 92 businesses inthe first half of November 2019.This included a total of 13.1 million in ABLfinancial solutions for seven new clients; 16,833,431 in eight new lease transactions from Crestmark Equipment Finance; 7,397,038 in 78 new lease transactions fromCrestmark Vendor Finance; 1,432,735 in financing for one client from the Joint VenturesDivision; and 1.345 million in financing forone new client from the Government Guaranteed Lending Division.Tradewind Closes 2.5MM Facilityfor Sustainable Homewares FirmTradewind has closed a 2.5 million tradefinance facility for a company based in Chinaand the U.S. that sells sustainable, ecologically sourced, and manufactured homewares.The company exports to major retailers in theU.S. including Amazon, Target, Kroger, andThe Container Store, as we
factoring companies face is to connect with others and learn from their experiences. The IFA Annual Conference provides an opportunity to build meaningful relationships that will help your company thrive in the turbulent times ahead. The conference will take place April 22 to Ap
