Chris Lehnes Factoring Specialist

203-664-1535 | chris@chrislehnes.com

Explanation: Notification and Verification Process

Posted on May 14, 2024 by Chris Lehnes

Accounts receivable factoring involves a process where a business sells its accounts receivable (invoices) to a third-party financial company (factor) at a discount. The factor then collects payments from the customers on those invoices. Here’s how the notification and verification process typically works:

Submission of Invoices: The business submits its invoices to the factor for financing. These invoices represent goods sold or services rendered to customers on credit terms.
Initial Verification: Upon receiving the invoices, the factor conducts an initial verification process. This involves assessing the creditworthiness of the business’s customers, as the factor will be relying on them to make payments on the invoices.
Notification to Customers: Once the initial verification is complete and the invoices are approved for financing, the factor notifies the customers (debtors) listed on the invoices that payments should be made directly to the factor rather than to the business. This notification often includes instructions on how and where to remit payments.
Verification of Receivables: As payments start coming in from the customers, the factor verifies the authenticity of the payments and matches them with the corresponding invoices. This ensures that the payments received align with the amounts owed by the customers.
Reporting to the Business: The factor provides regular reports to the business detailing which invoices have been paid, which are outstanding, and any discrepancies or issues encountered during the verification process.
Resolution of Disputes: In cases where customers dispute the invoices or there are discrepancies in payments, the factor may work with the business to resolve these issues. This could involve providing additional documentation or communication between the factor, the business, and the customers to clarify any misunderstandings.
Collection and Remittance: The factor continues to collect payments from the customers until all invoices have been paid. Once payments are received, the factor deducts its fees and advances the remaining funds to the business. This process continues until all invoices have been settled.

Overall, the notification and verification process in accounts receivable factoring is crucial for ensuring transparency, accuracy, and efficiency in managing the financing of invoices and collecting payments from customers. It involves close coordination between the factor, the business, and its customers to facilitate smooth transactions and minimize the risk of disputes or payment delays.

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The Pernicious Impact of Inflation on Small Businesses

Posted on May 13, 2024 by Chris Lehnes

Inflation, the persistent increase in the general price level of goods and services over time, can have far-reaching consequences on economies and societies. While its effects are often discussed in macroeconomic terms, the impact on small businesses, the backbone of many economies, is profound and often overlooked. This article delves into the pernicious effects of inflation specifically on small businesses, exploring how rising prices can disrupt operations, strain finances, and hamper growth prospects. The Pernicious Impact of Inflation on Small Businesses

Reduced Purchasing Power: One of the most immediate consequences of inflation for small businesses is the erosion of purchasing power. As prices rise across the board, the same amount of money buys fewer goods and services. For small businesses operating on tight budgets, this means they can afford fewer supplies, equipment, and other essentials, ultimately hindering their ability to operate efficiently and compete effectively in the market.
Increased Operating Costs: Inflation doesn’t just affect the prices of goods and services that small businesses purchase; it also impacts their operating costs. Essentials such as rent, utilities, and wages often rise alongside inflation, putting additional strain on already stretched budgets. Small businesses may find themselves forced to increase prices to offset these higher costs, risking losing customers in the process or absorbing the costs themselves, further squeezing profit margins.
Uncertainty and Planning Challenges: Inflation introduces uncertainty into the business environment, making it difficult for small businesses to plan for the future. Fluctuating prices make it challenging to accurately forecast expenses and revenues, leading to increased risk and reduced confidence in investment decisions. Small businesses may hesitate to expand or invest in new ventures, opting instead for cautious strategies that prioritize survival over growth.
Difficulty Accessing Credit: Inflation can also affect small businesses’ ability to access credit. Lenders may be hesitant to extend loans or lines of credit in inflationary environments due to the increased risk of default. Even if credit is available, small businesses may face higher interest rates, making borrowing more expensive and potentially unsustainable for those already struggling with rising costs and reduced profitability.
Competitive Disadvantage: Inflation can widen the gap between small businesses and larger competitors with greater resources and economies of scale. Small businesses may struggle to absorb price increases as efficiently or negotiate favorable terms with suppliers, putting them at a competitive disadvantage. Inflationary pressures can also lead to market consolidation, as larger firms with stronger financial positions capitalize on smaller competitors’ difficulties, further concentrating economic power.

The pernicious impact of inflation on small businesses cannot be overstated. From reduced purchasing power and increased operating costs to uncertainty and competitive disadvantages, inflation poses significant challenges for small businesses trying to thrive in increasingly volatile economic environments. Policymakers must consider the unique needs of small businesses when formulating inflation-fighting strategies, ensuring that measures aimed at stabilizing prices do not inadvertently exacerbate the challenges faced by those at the heart of the economy.

Understanding Sam Ash’s Bankruptcy Filing

Posted on May 10, 2024 by Chris Lehnes

In a disheartening turn of events, iconic music retailer Sam Ash has recently filed for bankruptcy, sending shockwaves through the music industry. Once a vibrant hub for musicians and enthusiasts alike, the company’s financial woes reflect broader challenges facing brick-and-mortar retailers in the digital age. Sam Ash’s Bankruptcy

Understanding
the Sam Ash Bankruptcy Filing

Sam Ash, founded in 1924 by Sam Ashkynase, initially thrived as a family-run business catering to musicians’ needs. Over the decades, it expanded its footprint, becoming a cornerstone of the music community across the United States. With a diverse inventory ranging from instruments to audio equipment and accessories, Sam Ash established itself as a one-stop destination for musicians of all levels.Sam Ash’s Bankruptcy

However, despite its storied history and loyal customer base, Sam Ash has found itself struggling to adapt to changing consumer habits and market dynamics. The rise of online retailers and digital platforms has profoundly impacted traditional retail establishments, presenting formidable challenges for companies like Sam Ash.

One significant factor contributing to Sam Ash’s bankruptcy filing is the shifting landscape of music consumption. With the proliferation of digital streaming services and the democratization of music production tools, fewer consumers are purchasing physical instruments or audio equipment from traditional retailers. Instead, they’re opting for digital downloads, streaming subscriptions, and online marketplaces, bypassing the need for physical stores.

Furthermore, the COVID-19 pandemic exacerbated Sam Ash’s financial woes, as lockdowns and social distancing measures forced the temporary closure of its physical locations. The abrupt halt in foot traffic dealt a severe blow to the company’s revenue streams, pushing it further into financial distress.

Despite efforts to pivot towards e-commerce and adapt its business model, Sam Ash struggled to keep pace with nimble online competitors. Its online presence, while existent, failed to capture a significant share of the digital market, leaving it at a disadvantage against more established e-commerce players.

Additionally, mounting debts and operational costs strained Sam Ash’s financial viability, ultimately culminating in its decision to file for bankruptcy protection. The filing, made under Chapter 11 of the U.S. Bankruptcy Code, provides Sam Ash with an opportunity to restructure its debts, streamline operations, and potentially emerge from bankruptcy as a leaner, more resilient entity.

However, the road ahead remains uncertain for Sam Ash and the broader music retail industry. While bankruptcy protection offers a lifeline, it does not guarantee long-term success. Sam Ash must navigate complex challenges, including fierce competition, evolving consumer preferences, and economic uncertainties, to secure its future in an increasingly digital landscape.

As the music world mourns the decline of a beloved institution, the story of Sam Ash serves as a cautionary tale for traditional retailers grappling with the disruptive forces of the digital age. In an era defined by constant change and innovation, adaptation is not merely an option but a necessity for survival. Only time will tell whether Sam Ash can orchestrate a comeback melody worthy of its illustrious past.

Happy Mother’s Day: Origins of the Holiday

Posted on May 10, 2024 by Chris Lehnes

Mother’s Day may have pagan origins, dating back to ancient Greek spring festivals that honored maternal goddesses. In Medieval times, apprentices and servants would also be given Mothering Sunday off to return home to their mothers, and would eat a special fruitcake called a Simnel cake. Happy Mother’s Day: Origins of the Holiday.

Anna Jarvis, a woman from Philadelphia, originated Mother’s Day in the United States in 1907. On May 12, 1907, she held a memorial service for her mother, Ann Jarvis, at her mother’s church in Grafton, West Virginia. Ann Jarvis had organized women’s groups to promote health and friendship, and had also nursed soldiers during the American Civil War. Anna wanted to honor her mother’s work and the sacrifices of motherhood, and by 1912, 45 US states and other countries were observing Mother’s Day. In 1914, President Woodrow Wilson made Mother’s Day a national holiday in the United States, to be celebrated on the second Sunday of May.

Anna Jarvis also promoted wearing a white carnation as a tribute to a deceased mother, and a red or pink carnation to represent a living mother.

How is Mother’s Day celebrated in other parts of the world?

What CFOs are Saying about Interest Rates

Posted on May 9, 2024 by Chris Lehnes

Few metrics hold as much sway and significance as interest rates. From impacting borrowing costs to influencing investment decisions, fluctuations in interest rates can reverberate throughout the global economy. Chief Financial Officers (CFOs) are key figures in navigating these dynamics, as their insights and strategies shape how businesses respond to changing interest rate environments. In this article, we delve into the perspectives of CFOs regarding the direction of interest rates, exploring their sentiments, predictions, and the implications for corporate decision-making.

Understanding the Significance of Interest Rates: Interest rates serve as a fundamental mechanism for regulating economic activity. Central banks adjust interest rates to manage inflation, stimulate economic growth, or curb excessive borrowing. For businesses, interest rates directly influence the cost of capital, impacting investment decisions, capital expenditures, and overall financial health.

Insights from CFO Surveys: Numerous surveys and studies regularly gauge the sentiments of CFOs regarding interest rate trends. These surveys provide valuable insights into how finance leaders perceive the trajectory of interest rates and the potential implications for their organizations.

Optimism Amidst Uncertainty: CFO sentiment towards interest rates often reflects broader economic outlooks. During periods of economic expansion and stability, CFOs may express confidence in a gradual increase in interest rates, signaling robust growth prospects. Conversely, economic uncertainty or recessionary concerns may lead CFOs to anticipate rate cuts or prolonged low rates to stimulate economic activity.
Impact on Financing Decisions: Interest rate forecasts significantly influence corporate financing decisions. CFOs must weigh the benefits of accessing capital at lower rates against the potential risks of rising borrowing costs. For instance, in a low-interest-rate environment, companies may pursue debt financing for expansion projects or strategic acquisitions. Conversely, rising interest rates may prompt a shift towards equity financing or tighter capital expenditure controls to manage financial risk.
Hedging Strategies and Risk Management: CFOs employ various hedging strategies to mitigate the impact of interest rate fluctuations on their organizations. Interest rate swaps, options, and other derivative instruments enable companies to lock in favorable rates or protect against adverse movements. These risk management tactics are essential for safeguarding financial stability and ensuring resilience against volatile market conditions.
Global Macroeconomic Factors: Interest rate trends are influenced by a complex interplay of global macroeconomic factors, including geopolitical events, monetary policy decisions, and inflationary pressures. CFOs must closely monitor these developments and adapt their strategies accordingly to navigate evolving market dynamics and mitigate potential risks to their businesses.

In an ever-changing economic landscape, CFOs play a pivotal role in interpreting and responding to interest rate trends. By staying attuned to market signals, leveraging financial instruments, and implementing prudent risk management practices, CFOs can steer their organizations through uncertain times and capitalize on opportunities for sustainable growth and value creation. As interest rates continue to evolve, CFOs will remain vigilant, ensuring that their organizations remain agile and resilient in the face of economic uncertainty.

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Factoring: Funding for Service Providers

Posted on May 8, 2024 by Chris Lehnes

Factoring offering can quickly fund Service Providers (as well as Manufacturers and Distributors) which do not meet traditional lending standards but have good quality accounts receivable outstanding.

Program Overview

$100k to $30 Million
75% advance against AR
Non-Recourse
No Audits or Covenants
No Long-Term Commitments
Spot Factoring Available
Great for bank declines

Think of me for Consultants, Staffing Companies or SaaS clients which need cash to meet their immediate goals.

Contact me at 203-664-1535 or clehnes@chrislehnes.com

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How Geopolitics Impacts Supply Chain Decisions

Posted on May 7, 2024 by Chris Lehnes

The influence of geopolitics on supply chain decisions cannot be overstated. From trade disputes and economic sanctions to geopolitical tensions and pandemics, a myriad of factors constantly reshape the global landscape, presenting both opportunities and challenges for businesses. Understanding these dynamics and their implications is crucial for effective supply chain management.

Geopolitical tensions can disrupt supply chains in multiple ways. Trade barriers, tariffs, and sanctions can restrict the flow of goods and services between countries, leading to increased costs and logistical complexities for businesses. For example, the escalating trade conflict between the United States and China in recent years has prompted many companies to reassess their sourcing strategies and diversify their supplier base to mitigate risks.

Moreover, geopolitical instability in certain regions can threaten the security of supply chains, particularly for industries reliant on critical resources or situated in politically volatile areas. Civil unrest, armed conflicts, or natural disasters can disrupt transportation networks, disrupt production facilities, or cause delays in shipments, impacting the flow of goods and causing disruptions.

The COVID-19 pandemic has further highlighted the vulnerabilities inherent in global supply chains. Travel restrictions, border closures, and lockdown measures have disrupted the movement of goods and labor, leading to shortages of essential products and raw materials. Companies have had to adapt rapidly, reconfigure their supply chains, and prioritize resilience and flexibility to mitigate the impact of future disruptions.

In response to these challenges, businesses are adopting various strategies to navigate the complex geopolitical landscape. One approach is to diversify sourcing and production locations to reduce dependency on a single region or country. By spreading their operations across multiple locations, companies can minimize the risk of supply chain disruptions caused by geopolitical events or natural disasters.

Furthermore, enhancing transparency and visibility across the supply chain is essential for identifying potential risks and developing contingency plans. Leveraging data analytics, digital technologies, and supply chain management platforms can provide real-time insights into market trends, supplier performance, and geopolitical developments, enabling companies to make informed decisions and respond quickly to changing conditions.

Collaboration and partnerships are also crucial for managing geopolitical risks effectively. Building strong relationships with suppliers, logistics providers, and government agencies can help companies navigate regulatory challenges, secure alternative supply sources, and access critical resources during times of crisis.

Ultimately, businesses must adopt a holistic approach to management that integrates geopolitical analysis, risk assessment, and contingency planning into their decision-making processes. By proactively addressing geopolitical challenges and building agile and resilient supply chains, companies can enhance their competitiveness and adaptability in an increasingly uncertain world.

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Factoring Proposal Issued: $1.2 Million – Medical Device Manufacturer

Posted on May 6, 2024 by Chris Lehnes

Business was about to close loan with Non-Bank Lender which suddenly lost its funding
Customer base is comprised of many strong companies, but many pay slowly putting a strain on cash
Factoring will provide funds needed to cover overhead and execute on new contracts.

Connect with Factoring Specialist, Chris Lehnes on LinkedIn

Learn about other factoring proposals issued

Accounts Receivable Factoring
$100,000 to $30 Million
Quick AR Advances
No Long-Term Commitment
Non-recourse
Funding in about a week

We are a great match for businesses with traits such as:
Less than 2 years old
Negative Net Worth
Losses
Customer Concentrations
Weak Credit
Character Issues

Chris Lehnes | Factoring Specialist | 203-664-1535 | chris@chrislehnes.com

What is Star Wars Day? – May the 4th…

Posted on May 3, 2024 by Chris Lehnes

Star Wars Day, observed annually on May 4th, is a beloved occasion celebrated by fans of the iconic Star Wars franchise. This article explores the origins of Star Wars Day and the various ways in which it is celebrated around the world. What is Star Wars Day?

Origins of Star Wars Day

The origins of Star Wars Day can be traced back to a pun on one of the franchise’s most famous catchphrases: “May the Force be with you.” The phrase, frequently uttered by characters throughout the Star Wars films, has become emblematic of the series’ themes of hope, bravery, and the mystical Force that binds the galaxy together.

The pun, “May the Fourth be with you,” first emerged as a playful nod to the original catchphrase. It gained traction among fans in the late 20th century, particularly with the rise of internet culture and social media platforms where fans could connect and share their enthusiasm for the franchise.

Evolution of the Celebration

What started as a playful pun among fans quickly evolved into an annual celebration known as Star Wars Day. The first organized Star Wars Day event is believed to have taken place in Toronto, Canada, in 2011, where fans gathered for movie screenings, cosplay contests, and other activities.

Since then, Star Wars Day has grown in popularity and is now celebrated by fans around the world. From movie marathons and lightsaber duels to themed parties and charity events, there is no shortage of ways for fans to express their love for the galaxy far, far away.

Global Celebrations

Star Wars Day is celebrated globally, with fans of all ages participating in a wide range of activities. In addition to organized events, many fans take to social media to share their favorite Star Wars memories, artwork, and cosplay photos using the hashtag #StarWarsDay.

In some cities, local businesses and organizations join in the celebration by offering special discounts on Star Wars merchandise or hosting themed events. Museums and theaters may also screen Star Wars films, allowing fans to experience the magic of the movies on the big screen once again.

The holiday has become a beloved tradition cherished by fans of the franchise worldwide. Whether attending organized events, hosting themed parties, or simply rewatching their favorite films at home, fans come together on May 4th to celebrate the timeless appeal of the Star Wars saga.

As the franchise continues to expand with new films, television series, books, and merchandise, the spirit of Star Wars Day remains as strong as ever, uniting fans in their shared love for a galaxy far, far away.

Contact Chris Lehnes

Non-Recourse Funding – No PG of Credit Risk Required for Owners

Posted on May 2, 2024 by Chris Lehnes

We can fund a qualified business in 3-5 days with non-recourse accounts receivable factoring. Non-Recourse Funding.

$10k to $30 Million
Competitive Advance Rates
No Audits. No Financial Covenants
No Long-Term Commitments
Most businesses with strong customers are candidates

We specialize in difficult deals

Start-Ups
Turnarounds
Historic Losses
Customer Concentration
Poor Personal Credit
Character Issues

We focuses on the quality of your client’s accounts receivable, ignoring their financial condition.

This enables us to move quickly and fund qualified businesses including Manufacturers, Distributors and a wide variety of Service Businesses (includes SaaS) in as few as 3-5 days.

Contact me today to learn if your client is a fit.

Connect with me on LinkedIn

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