Chris Lehnes Factoring Specialist

203-664-1535 | chris@chrislehnes.com

Factoring: Use AR To Get Cash for a Successful Summer

Posted on May 29, 2026 by Chris Lehnes

Summer acts as a brutal stress test for business cash flow. For seasonal industries, it’s a chaotic sprint that requires immediate cash to hire seasonal staff and buy inventory. For B2B service companies, summer often brings the dreaded “vacation slump”—decision-makers are out of the office, and Net-30 invoices suddenly stretch to Net-60 or Net-90. Consider Factoring.

Factoring: Use AR To Get Cash for a Successful Summer

In both scenarios, having your capital trapped in unpaid Accounts Receivable (AR) is a massive liability. If you have $100,000 sitting in your AR aging report but can’t make a $10,000 payroll on Friday, your business is technically growing but functionally starving.

This is where invoice factoring becomes a critical tool to unlock your cash flow and keep your summer operations running smoothly.

What is AR Factoring?

Invoice factoring is not a loan; it is the sale of an asset. You are selling your outstanding B2B invoices to a third-party company (the factor) at a discount in exchange for immediate cash.

Here is how the standard mechanism works:

The Advance: You sell a verified invoice to the factor. They advance you the bulk of the invoice value immediately—typically 75% to 85%—usually within 24 to 48 hours.
The Collection: Your customer pays the factor directly according to your standard terms (e.g., 30 or 60 days).
The Rebate: Once the customer pays the invoice in full, the factor releases the remaining 15% to 25% to you, minus their factoring fee (which generally ranges from 1.5% to 2.5% per month of the invoice value, depending on how long it takes the customer to pay and their creditworthiness).

How Factoring Solves Summer Cash Flow Bottlenecks

Relying on AR factoring shifts your business from a defensive posture (waiting for checks to arrive) to an offensive one.

1. Funding the Summer Spike

If your business peaks between Memorial Day and Labor Day, you have to spend money before you make it. You need to repair equipment, purchase bulk materials, and onboard temporary employees. Factoring allows you to leverage the work you completed in May to fund the massive projects you are taking on in June, without waiting for the bank to approve a traditional line of credit.

2. Surviving the B2B Payment Slowdown

When your clients’ accounts payable departments go on summer vacation, your invoices sit on desks. Factoring insulates your business from your clients’ slow payment habits. By advancing the cash, the factor absorbs the wait time. You get the working capital you need to cover fixed overhead costs—like rent, software subscriptions, and core payroll—regardless of whether your client takes 30 or 75 days to pay.

3. Taking Advantage of Supplier Discounts

Suppliers often offer early-pay discounts (e.g., a “2/10 Net 30” deal, meaning a 2% discount if paid within 10 days). If your cash is tied up in AR, you miss these savings. Factoring gives you the liquidity to pay your suppliers upfront. Often, the supplier discount you secure by having cash on hand will offset a significant portion of the factoring fee.

Strategic Considerations Before You Factor

While factoring is highly accessible—because factors care more about your customers’ credit scores than your own—it requires strategic management:

Mind your profit margins: Factoring makes the most sense for businesses with healthy margins (typically 15% or higher). If you operate on razor-thin margins, giving up 2% to 4% of your gross revenue to a factor can wipe out your profitability.
Recourse vs. Non-Recourse: Understand the terms you are signing. In recourse factoring (the most common and affordable type), if your customer ultimately defaults and never pays the invoice, you must buy the invoice back from the factor. In non-recourse factoring, the factor absorbs the loss if the customer goes bankrupt, but you will pay higher fees for that protection.

If unpaid invoices are the only thing standing between you and a highly profitable summer season, AR factoring is one of the fastest ways to turn your ledger into liquid capital. By treating your receivables as immediate cash, you can stop acting as a free bank for your clients and start investing in your own growth.

Contact Factoring Specialist, Chris Lehnes

The Pain at the Pump: Inflation Hits 3.8% in April

Posted on May 12, 2026 by Chris Lehnes

Inflation hits 3.8%

If your last trip to the gas station felt like a hit to your wallet, you aren’t alone. The latest Consumer Price Index (CPI) report is out, and the numbers confirm what we’ve all been feeling: U.S. inflation jumped to 3.8% in April, up from 3.3% in March.

This represents the highest inflation rate since 2023, and it marks a significant detour from the “path to 2%” that the Federal Reserve has been aiming for. While price increases have cooled in some sectors, the energy market is currently the primary engine driving these numbers higher.

The Pain at the Pump: Inflation Hits 3.8% in April

Gasoline: The Primary Culprit

The standout figure in April’s report is the cost of energy. National average gas prices have surged to approximately $4.50 per gallon, a staggering jump from the sub-$3.00 levels seen just a few months ago in February.

This spike isn’t just a random market fluctuation. It is being driven heavily by geopolitical instability, specifically the ongoing conflict with Iran. The closure of the Strait of Hormuz—a vital artery for global oil supply—has sent shockwaves through the market. When a fifth of the world’s oil supply is threatened, the impact is immediate and felt directly at the local pump.

The “Trickle-Down” of High Energy Costs

High gas prices do more than just make commuting more expensive. They create a “cost-of-living” domino effect:

Transportation & Logistics: Shipping companies and airlines are facing massive fuel surcharges, which eventually get passed down to the consumer.
Food Prices: Agriculture and grocery distribution are energy-intensive. As diesel and gas prices rise, expect your grocery bill to remain stubbornly high.
Manufacturing: Factories that rely on heavy energy consumption are seeing their margins squeezed, leading to higher prices for finished goods.

What This Means for Interest Rates

For months, the big question in the financial world has been: When will the Fed cut interest rates?

This 3.8% reading makes that answer much more complicated. Outgoing Fed Chair Jerome Powell and incoming Chair Kevin Warsh are facing a “higher-for-longer” reality. Typically, the Fed raises interest rates to cool a hot economy and lower inflation. With inflation trending upward again, the prospect of rate cuts in 2026 is fading, and some economists are even whispering about the possibility of another hike if the energy crisis doesn’t stabilize.

The Bottom Line

The April inflation report is a sobering reminder of how interconnected our local economy is with global events. While the U.S. economy remains resilient in many areas, the “gasoline tax” created by geopolitical tension is a heavy burden for the average household.

For now, the focus remains on the Middle East. Until energy supply stabilizes, the Fed—and our bank accounts—will likely be in a defensive crouch.

What are you doing to offset rising costs? Are you changing your summer travel plans or looking into more fuel-efficient alternatives? Let us know in the comments below.

Consumer Price Index Summary – May 12, 2026

Higher Gas Prices Are Invading the Produce Aisle

Posted on May 10, 2026 by Chris Lehnes

Higher gas prices aren’t just a headache at the pump anymore. They are quietly but surely making their way into your local grocery store, specifically hitting the produce aisle.

While it might seem like a stretch to connect the cost of filling up your sedan to the price of a head of lettuce, the two are more intertwined than most realize. Here’s a breakdown of why your salads are getting more expensive and what it means for your weekly grocery bill.

Higher Gas Prices Are Invading the Produce Aisle

1. The Logistics of Freshness

The most direct link between fuel and food is transportation. Unlike canned goods or grains, which have a long shelf life and can be moved via slower, more fuel-efficient methods like rail, fresh produce is a race against the clock.

Trucking Dependence: Most of our fruits and vegetables are transported by refrigerated trucks. When diesel and gasoline prices spike, freight surcharges follow suit.
The Distance Factor: In the U.S., the average piece of produce travels roughly 1,500 miles from farm to plate. Every mile costs more when fuel is at a premium.

2. On the Farm: More Than Just Tractors

Farmers feel the pinch long before the food is loaded onto a truck. Modern agriculture is incredibly energy-intensive.

Equipment Fuel: Tractors, harvesters, and irrigation pumps almost all run on diesel or electricity derived from fossil fuels.
Fertilizer Costs: This is the “hidden” fuel cost. Many synthetic fertilizers are nitrogen-based, produced using natural gas as a primary feedstock. When energy prices rise globally, the cost of nourishing the soil skyrockets.

3. The “Seeping” Effect: Why Now?

You might notice that gas prices jump overnight, but produce prices take a few weeks to catch up. This is known as “price lag.” Retailers often try to absorb small fluctuations to keep customers happy, but when high fuel costs persist, those margins disappear.

According to recent 2026 consumer surveys, nearly 60% of shoppers are now noticing that their essential spending—like dairy and produce—is being squeezed by the energy market.

4. How to Protect Your Budget

If you’re tired of seeing your grocery total climb, here are a few ways to mitigate the “gas-to-produce” pipeline:

Shop Seasonally: Out-of-season fruit often has to be flown in or shipped from the southern hemisphere, drastically increasing the fuel cost per item.
Support Local Farmers Markets: Reducing the miles your food travels is the most effective way to cut out the transportation middleman.
Frozen vs. Fresh: Flash-frozen vegetables are often processed near the farm and shipped in bulk, which can be more cost-effective during fuel spikes without sacrificing nutrition.

The Bottom Line: As long as our food system relies on long-distance logistics and energy-heavy farming, the “check engine” light on your car will continue to be a warning sign for the price of your groceries.

Contact Factoring Specialist, Chris Lehnes

Factoring: Quick Cash for GovCon

Posted on May 5, 2026 by Chris Lehnes

$100k to $30 Million to GovCon
Non-Recourse Factoring
Flexible Terms
Federal, State and Municipal AR Eligible
No size cap on most facilities

Include our proposal in your RFP response to demonstrate you have access to the cash needed to take on large contracts.

Government Contractors can obtain funds in as quick as a week backed by their accounts receivable.

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

For government contractors, winning a contract is a major milestone. However, the celebration often fades when the reality of lengthy payment cycles sets in. While the government is a reliable payer, it isn’t always a fast one. Net-30, Net-60, or even Net-90 payment terms can create a significant “cash gap” that stalls operations.

This is where Accounts Receivable (AR) Factoring—often called “Invoice Factoring”—becomes a strategic advantage.

What is AR Factoring?

At its core, AR factoring is a financial transaction where a business sells its unpaid invoices to a third party (a factor) at a discount. Instead of waiting months for the government to process a payment, the contractor receives a significant portion of the invoice value immediately.

How the Process Works for Contractors:

Deliver the Work: You complete your service for the government agency and issue an invoice.
Sell the Invoice: You sell that invoice to a factoring company.
Receive Advance: The factor advances you 75% to 85% of the invoice value, usually within 24–48 hours.
Government Pays: The government agency pays the factor directly according to the original terms.
Final Rebate: Once the factor is paid, they release the remaining balance to you, minus a small factoring fee.

Key Benefits for Government Contractors

1. Bridge the “Mobilization” Gap

Government projects often require heavy upfront costs—hiring specialized personnel, purchasing equipment, or clearing security hurdles. Factoring provides the immediate working capital needed to mobilize quickly without draining your cash reserves.

2. Meet Payroll with Confidence

The government doesn’t care if your invoice is stuck in “processing” when your employees’ rent is due. Missing payroll is a fast way to lose a talented team and jeopardize your contract. AR factoring ensures you have the liquidity to meet every payroll cycle, regardless of when the Treasury sends the wire.

3. Ability to Compete for Larger Contracts

Small to mid-sized contractors often shy away from “prime” opportunities because they lack the balance sheet to sustain long-term projects. Factoring scales with your growth. The more you invoice, the more capital you can access, allowing you to bid on larger, more lucrative multi-year contracts.

4. No New Debt

Unlike a traditional bank loan, factoring is not debt. You aren’t borrowing money; you are accelerating the payment of money you have already earned. This keeps your debt-to-equity ratio clean, which can be beneficial for future bonding requirements.

Navigating the “Assignment of Claims Act”

One unique aspect of factoring for government work is the Assignment of Claims Act. This federal law allows a contractor to assign the payments of a government contract to a financing institution.

A factor experienced in government contracting will handle the specific paperwork (Notice of Assignment) required to ensure the government sends payments to the correct address. Working with a factor who understands these regulatory nuances is critical to a smooth experience.

Is Factoring Right for You?

If your business is growing faster than your bank account, or if slow government payments are preventing you from taking on new work, AR factoring is a powerful tool. It transforms your most stagnant asset—your unpaid invoices—into a liquid engine for growth.

Don’t let a “Net-60” term hold your business back. Accelerate your cash flow and keep your mission on track.

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

The Yellow Bird’s Turbulent Flight: Is Spirit Airlines Nearing the End?

Posted on May 1, 2026 by Chris Lehnes

If you’ve flown recently, you might have noticed the bright yellow planes of Spirit Airlines are becoming a rarer sight. As of May 2026, the “ultra-low-cost carrier” (ULCC) that changed the way we think about budget travel is locked in a high-stakes battle for its very survival.

After two bankruptcy filings in less than two years and a global energy crisis that sent fuel prices soaring, Spirit is no longer just “restructuring”—it is teetering on the edge of a total shutdown.

The Yellow Bird’s Turbulent Flight: Is Spirit Airlines Nearing the End?

A Timeline of Turbulence

To understand how we got here, you have to look at the “Chapter 22” phenomenon (a slang term for when a company files for Chapter 11 twice).

November 2024: Spirit filed its first Chapter 11 bankruptcy after a federal judge blocked its $3.8 billion merger with JetBlue. It emerged quickly in March 2025, but the underlying operational issues remained.
August 2025: Just months later, the airline filed for a second Chapter 11. The goal was a massive overhaul: slashing debt from $7.4 billion down to $2 billion and shrinking the fleet to a lean 76-80 aircraft.
Early 2026: A plan was in place to emerge by summer. Then, geopolitical conflict in the Middle East caused jet fuel prices to double, blowing a hole in the airline’s recovery budget.

The $500 Million Question: Bailout or Bust?

Right now, Spirit is surviving on “days, not weeks” of cash. The current drama is centered in a New York bankruptcy court, where a controversial rescue plan is on the table:

The “Trump Takeover” Proposal: The federal government has discussed a $500 million bailout that would give the U.S. government a90% ownership stakein the airline.

While the administration argues this could save 17,000 jobs and keep fares low, the deal is currently stalled. Major bondholders are balking at being “pushed down” the repayment line by the government, and some officials argue against “putting good money after bad.”

What This Means for Travelers

If you have a flight booked with Spirit, or thousands of Free Spirit® miles saved up, here is the current reality:

Flights are still operating (for now): As of today, Spirit is maintaining its schedule, but the frequency of flights has been cut by over 50% compared to last year.
The “Use it or Lose it” Rule: If Spirit moves from Chapter 11 (reorganization) to Chapter 7 (liquidation), your loyalty points could become worthless overnight. Many experts suggest booking flights with miles now rather than holding onto them.
Fare Hikes: Spirit’s presence has historically kept legacy airlines’ prices in check. It’s estimated that if Spirit exits a route, fares on that route jump by about 23%.

The New “Premium” Spirit

If Spirit does survive, it won’t look like the airline we remember. The restructuring plan involves moving away from the “bare fare” model toward a more upscale experience to compete with Delta and United. This includes adding a third row of Big Front Seats and expanding Premium Economy options across the fleet.

The Bottom Line

Spirit Airlines is currently in the ultimate “emergency landing” scenario. Whether it emerges as a federally-backed “Value” carrier or disappears into the history books alongside names like Pan Am and Air Florida depends entirely on the court hearings happening this week.

If you’re flying Spirit this month, keep a close eye on the news—and maybe have a backup plan ready.

Contact Factoring Specialist, Chris Lehnes

Why Importers Are Aggressively Selling IEEPA Tariff Refund Claims

Posted on April 30, 2026 by Chris Lehnes

We continue to assist companies nationwide in converting IEEPA tariff refund claims into immediate cash, even after the launch of U.S. Customs and Border Protection’s(“CBP”) CAPE refund portal and the latest April 28th update from the U.S. Court of International Trade (“CIT”).

CIT’s April 28th status review confirmed that the lead IEEPA refund litigation has largely moved from the legal entitlement phase into the implementation and payment phase. In simple terms, the question is no longer primarily whether many importers are entitled to refunds, the issue is when those refunds will actually be paid.

While CBP officially launched CAPE on April 20^th to process refunds, there was no new court order requiring immediate payment of all claims. Instead, the CIT is supervising execution, while Customs works through claim submissions, liquidation status, eligibility reviews, and administrative processing. This distinction matters. CBP has indicated that certain accepted claims may be paid within approximately 45–60 days plus statutory interest.

However, “acceptance” is not the same as submission. Importers must first complete filing requirements, resolve broker authority issues, verify liquidation status, satisfy procedural review, and clear compliance review before the payment clock truly begins. For many importers, especially those with older entries, previously liquidated claims, multiple brokers, documentation issues, or claims that may fall outside CAPE Phase 1, the actual recovery timeline could extend for many months or significantly longer. As a result, our buyers remain highly active in purchasing IEEPA tariff refund claims, with transactions from $250,000 to $7 million purchased at a Buy Rate of 85%, while claims exceeding $7 million have a Buy Rate of 90%.

Why Importers are still Selling Tariff Refund Claims after CAPE Opened

Judge Eaton of CIT did not order immediate universal payment of all claims. CBP’s estimated payment window begins only after formal claim acceptance, not submission.

Many claims do not clearly qualify for CAPE Phase 1 and may require later phases. Finally liquidated entries remain one of the largest unresolved issues. Previously liquidated entries may still require protests, reliquidation, or additional litigation. The right to a refund is clearer—but the timing of payment remains uncertain.

CSV upload issues, ACE access problems, and broker mismatches can delay acceptance. Documentation gaps and reconciliation issues remain common. Customs audit and compliance review may delay payment even after filing.

Trump Administration appeal deadlines and future legal developments could delay the timing of refund payments. Processing millions of entries may create substantial administrative backlogs. Port-by-port inconsistencies may slow recovery for certain importers. Working capital needs often cannot wait for government processing timelines/.

Importers Are Choosing To Monetize Now

Immediate working capital for inventory, payroll, and vendor obligations. Reduced lender pressure and improved borrowing base flexibility. Elimination of refund timing risk and litigation uncertainty. Improved balance sheet certainty. Faster access to liquidity without waiting for government disbursement. Stronger buyer pricing now that CAPE implementation is underway as Buy Rates increased from 45% in February to 85% today

For many businesses, immediate liquidity today is worth more than waiting for a larger payment later. Many importers are no longer asking. “Will I get paid?”, They are asking, “Is waiting worth the delay, uncertainty, and operational risk?”. For many companies, the answer is no. We work with importers with claims starting at $250,000, with no maximum limit across industries including food, seasonal goods, apparel, and home products.

Most transactions can be completed in approximately 10 business days, assuming proper documentation and credit quality.

To learn more about IEEPA Tariff Claim Refunds, Contact Factoring Specialist Chris Lehnes

https://www.cbsnews.com/news/tariff-refund-portal-trump-cbp

The Purchase Price of IEEPA Tariff Refund Claims has Increased to up to 85% of the Claim Amount

Posted on April 17, 2026 by Chris Lehnes

Convert IEEPA Tariff Claims to Cash on an Expedited Basis

I have been actively assisting companies nationwide in converting their IEEPA tariff refund claims into immediate cash.

U.S. Customs and Border Protection is rolling out a centralized system (CAPE) to process refunds, and some trade experts believe that certain importers could begin receiving refunds within the next six months. However, there remains significant uncertainty around timing, and many industry participants believe that a large portion of claims could still take years to fully resolve.

This divergence is driven by several factors, including:
The complexity and scale of processing millions of entries
The possibility that certain categories of claims may be prioritized over others, delaying recovery for more complex or lower-volume importers
The need for new administrative procedures, as IEEPA does not clearly define a refund mechanism
The potential for case-by-case eligibility determinations

Ongoing legal and procedural developments, including possible appeals by the Trump Administration and implementation challenges

Liquidation Status – Whether entries have already been liquidated, which in many cases may require formal protests or litigation to reopen and recover duties
The likelihood of inconsistent treatment across ports (port-by-port) or entry types as CBP implements new processes in phases
Documentation gaps and data reconciliation issues, particularly for older entries or those filed across multiple brokers
The absence of clear guidance on how interest on refunds will be calculated and paid, which could lead to further disputes

Capacity constraints within CBP and the potential for processing backlogs as refund volumes scale

Continued legal challenges around the scope of eligibility, including disputes over classifications, valuation, or origin that could delay specific claims

As a result, while some importers may receive refunds within six months, others, particularly those with more complex or previously liquidated entries, could face a multi-year recovery timeline. To address this uncertainty, financial institutions and hedge funds are actively purchasing IEEPA tariff refund claims at a discount.

Current buy rates are as high as 85% of the expected refund value, depending on claim size, credit quality of the importer and documentation quality as these claims are not directly assignable. AES works with importers with claims starting at $250,000, with no maximum limit. Since entering this market five months ago, AES has facilitated the monetization of approximately $20 million in claims across industries including food, seasonal goods, apparel, and home products.

Market pricing has evolved significantly: Prior to the February 20, 2026, Supreme Court ruling, claims traded at approximately 20–25%
Following the ruling, pricing increased to 40–50%
More recently, improving legal clarity and market participation have driven pricing to current levels of up to 85% of the IEEPA tariff refund amount

While some importers initially adopted a “wait and see” approach in anticipation of near-term refunds, the combination of timing uncertainty and significantly improved pricing has led many to explore monetization as a way to eliminate risk and accelerate liquidity. The Funds AES works with are able to complete transactions in approximately 2–3 weeks, depending on the completeness and quality of documentation.

For more information on this process, contact Factoring Specialist, Chris Lehnes

The Purchase Price of IEEPA Tariff Refund Claims has Increased to Up to 85% of the Claim Amount

Posted on April 8, 2026 by Chris Lehnes

Trade experts predict it could take at least 2 to 5 years for importers to receive their IEEPA tariff refunds due to both the long-standing rules that are in effect and the Administration’s adversarial stance to issuing tariff refunds.

The Purchase Price of IEEPA Tariff Refund Claims has Increased to Up to 85% of the Claim Amount

The administration can make appeals, request Stays from the U.S. Court of International Trade, Customs could request a case-by-case eligibility review and there could be delays in the system upgrades that Customs and Border Protection are working on. Financial institutions are purchasing these tariff claims at a discount.

The current Buy Rates are now up to 85% of the refund amount. Rates are based on claim size and credit quality as tariff refund claims are not assignable. Importers with IEEPA tariff refund claims starting at $350,000 are eligible and there is no maximum limit. AES has monetized $20 million in refund claims since its involvement in brokering IEEPA tariff refund claims commenced 5 months ago.

Clients include those in the food, seasonal decoration, apparel and home goods industries. Prior to the Supreme Court’s ruling on February 20, 2026 IEEPA claims were trading at an average of only 22%. After the ruling against the Administration Buy Rates increased to 40%-50 % and subsequent to some positive rulings on March 4 and 6^th by the Court of International Trade (“CIT”) and other encouraging news stories, Buy Rates have now increased to up to 85 %.

Importers were initially taking a wait and see approach after the recent rulings by CIT as there was initially hope they might see refunds in a manner of months. With the significant increase in Buy Rates and negativity regarding timing in the media, importers are now coming off the sidelines and exploring the potential sale of their IEEPA tariff refund claims. The Funds AES works with can purchase claims within approximately 3 to 5 weeks depending on the quality of documentation assembled by the importer. For a detailed discussion of how these two options work see below.

How the Process of Selling an IEEPA Tariff Claim Works

Model is: As an example, Company X has paid ($10 Million) in tariffs since April 7, 2025Company X wants to de-risk prior to determination and finalization of the IEEPA tariff Refund Process. Company X sells (50%, 100%, or some other percentage) of its tariff ‘claim’ to Buyer A in the form of a participation. The Trade is nonrecourse to Company X as to the outcome of the Refund Process; but recourse to Company X only if the amount / validity of the claim is proven to be false, or too high.

Process for Selling IEEPA Tariff Claims: As an example, Company X has paid $10 million in IEEPA Tariffs. Company X agrees to “sell” its tariff claim to Buyer for 85% of the claim amount, i.e. $8.5 million. Buyer sends Seller a Confirm, and then ultimately a Participation Agreement which will govern the transaction.

IMPORTANT – Company X retains its status as the “Plaintiff” / “Claimant” since these tariff claims are not transferable. Buyer might ask Company X to commence litigation for the return of the IEEPA tariffs paid. The rationale for this is that it is possible that only those parties who have commenced actual litigation are entitled to refunds.

Thus, Company X will need to commence litigation in order to receive their refund.Buyer will continue to monitor the situation and inform Company X of developments.If and when the refund is received on the claim, Company X will receive the refund and forward to the Buyer.

Using an IEEPA Tariff Claim as Collateral for a Loan In lieu of selling an IEEPA Tariff Claim at a discount, it is possible to use this claim as collateral for a term loan. This term loan would be on a “recourse: basis to the borrower. The potential loan amount could be up to approximately 50% to 60% of the total IEEPA claim amount. However, the claim must exceed $20 million to qualify for a loan. The interest rate would be in the low to mid-teens.

Important Points Regarding the Sale of a Tariff Claim: Company X (as seller of the Claim) must be a financially healthy enough counterparty for Buyer A to enter into what could be a 2-to-5-year process of obtaining the refund. Legal fees are split going forward based on risk percentage. If Company X sells 100% today, Buyer A will pay 100% of legal costs today. Buyers are currently paying up to 85% to companies seeking to sell their IEEPA tariff claims.

However, this is an evolving market and these percentages can either increase or decrease depending on the markets’ reaction to the Trump Administration’s expected obstructionism and the unresolved Court of International Trade’s procedural issues.

Prior to the Supreme Court decision, buyers were purchasing tariff claims at an average of 22% due to the high risks involved. We will be monitoring on a daily basis the rates at which Buyers are purchasing IEEPA claims and we will update our website accordingly. Feel free to email us to ascertain what the rate is on any particular day. There would likely be an administrative process instituted such that companies that have paid these IEEPA tariffs will need to file special claims and wait to get refunded by the government.

The process of receiving the refund payment from the government could take up to 2 to 5 years according to trade experts.

Contact Factoring Specialist, Chris Lehnes to learn how to help your business gain early access to their Tariff Repayment

Why Distributors are Embracing AR Factoring

Posted on March 20, 2026 by Chris Lehnes

What is Factoring: In the world of distribution, the “growth paradox” is a real headache. You land a massive new retail contract—which is great news—but suddenly you’re shelling out for inventory and shipping costs while your customer sits on a 60- or 90-day payment term.

For many distributors, waiting for those invoices to clear creates a suffocating bottleneck. This is where Accounts Receivable (AR) Factoring comes in. It’s not a loan; it’s a financial tool that turns your unpaid invoices into immediate working capital.

Why Distributors are Embracing AR Factoring

How It Works: The Quick Breakdown

Instead of waiting months for a customer to pay, you sell your outstanding invoices to a “factor” (a specialized financial company).

The Advance: The factor typically advances you 80% to 90% of the invoice value within 24 hours.
The Collection: The factor handles the collection from your customer.
The Rebate: Once the customer pays, the factor sends you the remaining balance, minus a small fee (usually 1–3%).

4 Major Benefits for Distributors

1. Bridge the Inventory Gap

Distributors often have to pay suppliers long before they get paid by their own clients. Factoring provides the liquidity to pay your manufacturers upfront, often allowing you to take advantage of early-payment discounts that can actually offset the cost of the factoring fee itself.

2. Fuel Rapid Scalability

Traditional bank loans are limited by your credit history or collateral. Factoring, however, scales with your sales. The more you sell to reputable customers, the more funding becomes available. It allows you to say “yes” to large orders that you otherwise couldn’t afford to fulfill.

3. Professional Credit Management

Many factoring companies act as an extension of your back office. They perform credit checks on your potential customers, helping you avoid “bad seeds” before you ship a single pallet. This reduces your risk of bad debt and saves your team the awkwardness of making collection calls.

4. No New Debt

Since factoring is the purchase of an asset (your invoice) rather than a loan, it doesn’t show up as debt on your balance sheet. This keeps your debt-to-equity ratio clean, making your business look much healthier to future investors or traditional lenders.

Is It Right For You?

Factoring is particularly powerful if you are:

A startup with a thin credit history but blue-chip customers.
Experiencing seasonal spikes that drain your cash reserves.
Tired of the “waiting game” associated with 30, 60, or 90-day terms.

While there is a cost involved, the ability to reinvest that cash immediately into new inventory or operations often outweighs the fee. In the fast-moving world of distribution, speed is a competitive advantage.

Factoring vs. A Traditional Line of Credit: A Distributor’s Comparison

While both tools solve cash flow problems, they operate very differently. Here is how they stack up for a growing distributor:

Feature	AR Factoring	Traditional Bank Line of Credit (LOC)
Funding Limit Based On…	The creditworthiness of your customers and your accounts receivable balance.	Your business’s credit history, profitability, and your collateral.
Speed of Funding	Extremely fast. Setup takes a few days; once active, funding often occurs within 24–48 hours of invoice verification.	Slow. The approval process can take weeks or even months.
Debt Type	Not Debt. It is the “asset purchase” of your invoices.	Debt. This is a loan that appears as a liability on your balance sheet.
Impact on Credit	Boosts Credit Score. It provides cash to pay your suppliers and operational debts on time.	Lowers “Available” Credit. Utilizing the full LOC can temporarily lower your score until it’s paid down.
Administrative Support	The factor often provides credit management and collection services, freeing up your back office.	You retain full responsibility for all collections and monitoring customer credit.
Scalability	Unlimited. As your credit-worthy sales grow, your available funding automatically increases.	Capped. Your limit is fixed and requires a re-application process to increase.

Gemini said

Certainly. Here is a comparison table and a section you can drop directly into your blog post.

Factoring vs. A Traditional Line of Credit: A Distributor’s Comparison

While both tools solve cash flow problems, they operate very differently. Here is how they stack up for a growing distributor:

Feature	AR Factoring	Traditional Bank Line of Credit (LOC)
Funding Limit Based On…	The creditworthiness of your customers and your accounts receivable balance.	Your business’s credit history, profitability, and your collateral.
Speed of Funding	Extremely fast. Setup takes a few days; once active, funding often occurs within 24–48 hours of invoice verification.	Slow. The approval process can take weeks or even months.
Debt Type	Not Debt. It is the “asset purchase” of your invoices.	Debt. This is a loan that appears as a liability on your balance sheet.
Impact on Credit	Boosts Credit Score. It provides cash to pay your suppliers and operational debts on time.	Lowers “Available” Credit. Utilizing the full LOC can temporarily lower your score until it’s paid down.
Administrative Support	The factor often provides credit management and collection services, freeing up your back office.	You retain full responsibility for all collections and monitoring customer credit.
Scalability	Unlimited. As your credit-worthy sales grow, your available funding automatically increases.	Capped. Your limit is fixed and requires a re-application process to increase.

Which One Wins for Distributors?

A bank line of credit is almost always the cheapest form of capital if you can get approved for a large enough limit.

However, for distributors in a hyper-growth phase, or those whose balance sheets don’t match their ambition, AR factoring offers unmatched speed and scalability. It allows you to leverage your customers’ financial strength to fund your own growth.

The Final Verdict: When to Choose Factoring

For a distributor, the choice between factoring and other financing boils down to your growth trajectory and customer base.

A traditional bank line of credit is often the lowest-cost option, but it is also the most rigid. If you have years of steady profitability and a “boring” (predictable) growth curve, the bank is your best friend.

However, AR factoring is the superior choice if:

You are growing faster than your cash flow allows: If a sudden 50% increase in orders would actually break your business because you can’t afford the inventory, you need factoring.
You have “lumpy” revenue: If you deal with seasonal spikes where you need $500k in October but only $50k in January, the flexibility of factoring is unmatched.
Your customers are larger than you: If you are a small distributor selling to giants like Walmart or Amazon, a factor will look at their multi-billion-dollar credit rating to fund you, rather than your own limited history.

Ultimately, factoring isn’t just a way to get paid early—it’s a way to weaponize your accounts receivable to outmaneuver competitors who are still stuck waiting for a check in the mail.

Contact Factoring Specialist, Chris Lehnes

Announcement: Versant Funds $5 Million Factoring Facility to 90 Year Old Service Provider

Posted on March 19, 2026 by Chris Lehnes

(March 19, 2026) Versant Funding LLC is pleased to announce that it has funded a $5 Million non-recourse factoring facility to a 90+ year-old company that provides services to major consumer brands.

After acquisition by a Private Equity Group, our latest client’s new management team implemented a turnaround plan which required additional cash. While the company was in the process of applying for an asset-based line of credit, time was of the essence and a funding date for the ABL facility was uncertain.

“Versant can fund faster than most traditional financing sources because we focus solely on the credit quality of our clients’ customers and do not perform a full underwriting or audit of the business” according to Chris Lehnes, Business Development Officer for Versant Funding, and originator of this financing opportunity. “Since this company’s customers include some of the world’s strongest consumer brands, we quickly approved the transaction and were ready to fund in about a week.”

Versant Funding’s custom Non-Recourse Factoring Facilities have been designed to fill a void in the market by focusing exclusively on the credit quality of a company’s accounts receivable. Versant Funding offers non-recourse factoring solutions to companies with B2B or B2G sales from $100,000 to $30 Million per month. All we care about is the credit quality of the A/R. To learn more contact: Chris Lehnes |203-664-1535 | chris@chrislehnes.com