Factors
Find Strength in Numbers
by Jules Abend, Contributing Editor
As consolidation accelerates within the factoring arena, emerging power
players are looking to capitalize on big-name brad prestige and invest
in e-commerce technologies that will help them capture more clients in
bigger nets.
The nice, clubby, factoring business of yesteryear is rapidly disappearing
as brand-name financial institutions -- with deep pockets and international
connections acquire traditional factoring organizations. Their goal is
to cash in on middle-market sewn products companies' needs, as well as
continue to consolidate and expand globally.... |
SMALL
FIRMS NOW BIG BUSINESS FOR REFACTORS
As the large factoring companies become more institutionalized, opportunities
open up for entrepreneurial lenders to cater to apparel and textile accounts
by offering both alternative and traditional services. An offering that
falls into the former category is refactoring -- through which lenders
bundle small receivables and farm them out to large factors for back-office
credit and collection work....
Indeed, "service" is the mantra of refactors believes Bruce L. Cohen,
president of Westgate Financial Corp. which is probably among the top
three lenders in the niche. He acknowledges that there are makers who
fit very nicely with the larger factors - those that don't need any personal
attention and are willing to sacrifice service for one-quarter of a point
in interest (which can add up to a lot of money on $100 million in volume).
However he adds, "If you save one-quarter of a point on $3 million and
you can't get important questions answered or you need personal service
[and it's not available], how important is that savings?"
Westgate is known for production process purchase order funding and trade
finance, and that's how Cohen got into the business 10 years ago. Now,
he says, there are only one or two other companies that truly perform
these functions. As he explains the service, "If you bring me an order
and the end credit is good, I will finance the raw materials, pay for
the labor, freight and boxing costs -- and everything else that goes into
making the goods."
... Cohen states: "We grew about 40 percent in '99, and so far
we're experiencing similar growth [this year]." |
