How Food Producers Can Use Factoring to Meet Working Capital Needs

Introduction – Food Producers need working capital too

In the fast-paced and highly competitive food production industry, maintaining adequate working capital is not just a financial strategy but a critical necessity. Food producers often operate on thin margins, face seasonal demand fluctuations, and must manage a complex supply chain that includes perishable inventory. To stay agile and responsive, they need reliable and flexible access to cash. One financial tool that has emerged as particularly useful in addressing these challenges is accounts receivable factoring.

Accounts receivable factoring allows businesses to convert their outstanding invoices into immediate cash. For food producers, this can mean the difference between seizing a growth opportunity or missing it, between meeting payroll or delaying production. This article explores how food producers can use accounts receivable factoring to meet their working capital needs, examining the mechanics of factoring, its benefits and drawbacks, and how to strategically integrate it into a broader financial strategy.


1. Understanding Working Capital in the Food Production Industry

Working capital refers to the difference between a company’s current assets and current liabilities. It represents the liquidity available to a business for day-to-day operations. In the food production industry, working capital is vital for purchasing raw materials, paying labor, managing transportation, and investing in production equipment.

Common challenges food producers face include:

  • Seasonal cash flow issues: Demand for food products can be seasonal, affecting revenue cycles.
  • Perishable inventory: Food producers must move products quickly, and delays in payment can create cash flow bottlenecks.
  • Extended payment terms: Large retailers and distributors often impose long payment cycles, sometimes up to 90 days.

2. What is Accounts Receivable Factoring?

Accounts receivable factoring, often simply referred to as factoring, is a financial transaction where a business sells its outstanding invoices to a third party (a factoring company) at a discount. The factor then assumes the responsibility of collecting the invoice payment from the customer.

Key Components of Factoring:

  • Advance Rate: Typically 70% to 90% of the invoice value is advanced to the business upfront.
  • Reserve: The remainder is held until the invoice is paid, minus the factor’s fees.
  • Fees: Usually include a discount fee (interest) and possibly administrative fees.

There are two main types of factoring:

  • Recourse Factoring: The business retains the risk if the customer fails to pay.
  • Non-Recourse Factoring: The factor assumes the risk of non-payment.

3. Benefits of Factoring for Food Producers

3.1 Immediate Access to Cash Factoring turns invoices into cash within 24 to 48 hours, enabling food producers to respond quickly to operational needs.

3.2 Improved Cash Flow Management By smoothing out cash flow irregularities, factoring helps food producers plan and budget more effectively.

3.3 Flexibility and Scalability Factoring grows with sales. As a food producer issues more invoices, they can factor more receivables, aligning financing with business growth.

3.4 No Additional Debt Factoring is not a loan; it doesn’t appear as a liability on the balance sheet. This preserves credit ratings and borrowing capacity.

3.5 Outsourced Collections The factoring company often takes on the role of collecting payments, saving administrative time and effort.


4. Practical Application in the Food Production Sector

4.1 Meeting Seasonal Demand A fruit canning company may face high production costs during harvest season but won’t receive payments from distributors for 60 days. Factoring their invoices ensures they have the cash to pay suppliers and seasonal workers.

4.2 Managing Supply Chain Costs A bakery supplying national grocery chains may need to pay flour suppliers and logistics providers upfront. Factoring their receivables from the grocery chains allows continuous operations without debt.

4.3 Funding Expansion A frozen food producer landing a new contract with a supermarket chain can use factoring to fund increased production without waiting 90 days for the supermarket to pay.


5. Selecting a Factoring Partner

Choosing the right factoring company is critical. Food producers should consider:

  • Industry experience: Some factors specialize in food and beverage and understand the unique cash flow patterns.
  • Fee structure: Transparent and competitive pricing is essential.
  • Customer service: Good support can smooth the transition and ongoing relationship.
  • Reputation: References and reviews can offer insights into reliability.

6. Risks and Considerations

6.1 Cost Factoring can be more expensive than traditional financing. It’s important to compare costs and ensure margins can absorb the fees.

6.2 Customer Relationships The factor communicates with customers for collections. Ensure the factor treats customers professionally to preserve relationships.

6.3 Dependence Over-reliance on factoring without a broader financial strategy can lead to challenges. It should be one tool among many.

6.4 Contract Terms Some factoring agreements include lock-in periods or minimum volume commitments. Businesses must review terms carefully.


Food producers often operate on thin margins, face seasonal demand fluctuations, and must manage a complex supply chain that includes perishable inventory. To stay agile and responsive, they need reliable and flexible access to cash. One financial tool that has emerged as particularly useful in addressing these challenges is accounts receivable factoring.

7. Integrating Factoring into a Financial Strategy

7.1 Strategic Use Use factoring to manage peak seasons or bridge specific gaps rather than as a permanent solution.

7.2 Combine with Other Tools Factoring can complement lines of credit, inventory financing, or equipment leasing to create a balanced working capital strategy.

7.3 Monitor Metrics Track the cost of factoring relative to the benefits—e.g., increased sales, timely payroll, supplier discounts from faster payments.


8. Regulatory and Ethical Considerations

Food producers must ensure compliance with industry regulations. Factoring does not absolve a company of its responsibilities:

  • Transparency: Be upfront with customers about the factoring arrangement.
  • Data Security: Ensure the factor adheres to data protection standards.

9. Case Studies

Case Study 1: Organic Dairy Producer An organic dairy company supplying health food stores across the country used factoring to meet growing demand. With 60-day payment terms from clients, they faced a cash crunch. Factoring enabled them to invest in new cows and expand production without debt.

Case Study 2: Small Snack Manufacturer A startup snack brand received a large order from a national chain. Lacking the capital to fulfill the order, they used factoring to fund production and delivery. The move helped them scale and build credibility.

Case Study 3: Family-Owned Produce Distributor This business faced extended payment terms from supermarkets. Factoring their invoices provided consistent cash flow, helping them pay farmers promptly and negotiate better supplier terms.


10. Future Outlook and Trends

The factoring industry is evolving, with digital platforms offering quicker and more transparent services. For food producers, this means:

  • Faster approvals
  • Lower costs due to fintech competition
  • Integration with accounting software
  • More flexible terms

Sustainability and ethical sourcing trends may also influence factoring policies, as lenders consider Environmental, Social, and Governance (ESG) factors.


Conclusion

In the dynamic landscape of food production, where timely access to capital can make or break operations, accounts receivable factoring offers a practical and powerful solution. While it may not replace traditional financing or internal cash flow management, it serves as an effective complement. By converting receivables into working capital, food producers can maintain liquidity, scale operations, and weather the seasonal and market-driven fluctuations inherent in the industry.

With careful selection of a factoring partner, clear understanding of the costs, and strategic integration into broader financial planning, factoring can be a game-changer for food producers striving to thrive in a competitive and capital-intensive environment

Choosing Your Personal Injury Attorney: A Complete Guide

The central themes revolve around the critical importance of selecting the right personal injury attorney and outlining a structured, step-by-step process to ensure a well-informed and confident decision. The guide emphasizes that this choice significantly impacts the case outcome, stress levels, and resolution speed.

The central themes revolve around the critical importance of selecting the right personal injury attorney and outlining a structured, step-by-step process to ensure a well-informed and confident decision. The guide emphasizes that this choice significantly impacts the case outcome, stress levels, and resolution speed.

Most Important Ideas/Facts

  1. Defining a Personal Injury Attorney and Their Role:
  • A personal injury attorney specializes in cases involving physical or psychological injury due to another party’s negligence or wrongdoing.
  • Their primary role is to “advocate for victims and help them obtain compensation for medical expenses, lost wages, pain and suffering, and other damages.”
  • They handle a variety of cases, including “car and truck accidents, medical malpractice, slip and fall injuries, product liability, workplace injuries, and wrongful death.”
  • Their functions include providing legal advice, negotiating settlements, and representing clients in court.
  1. Why the Right Attorney Matters:
  • Choosing the right attorney “can make the difference between winning a case or walking away with little or nothing.”
  • A good attorney will “Maximize your compensation,” “Navigate complex legal processes,” “Gather and present evidence effectively,” “Negotiate with insurance companies,” and “Protect you from common pitfalls.”
  • Conversely, a poor choice can lead to “miss[ing] deadlines, lack motivation, or pressure you into an unfavorable settlement.”
  1. Specialization is Key:
  • It is crucial to “make sure they handle the specific type of injury claim you have.”
  • Different case types (e.g., Auto Accidents, Medical Malpractice, Product Liability, Workplace Injuries) “often require different legal expertise.”
  • The guide stresses choosing someone with “deep experience in your specific case type.”
  1. A Step-by-Step Selection Process:
  • Step 1: Understand Your Needs: Before starting, clarify factors like “Severity of injury,” “Liability complexity,” “Insurance coverage,” and whether you prefer “Settlement vs. trial.”
  • Step 2: Start With Research: Compile a shortlist (3-5 attorneys) using “Personal referrals,” “Bar association directories,” “Online directories” (Avvo, Super Lawyers, Martindale-Hubbell), and “Google and Yelp reviews.”
  • Step 3: Evaluate Credentials and Experience: Look for “Licensure,” “Years of experience” (several years in personal injury law), “Trial experience,” “Track record” of high-value outcomes, and “Certifications.”
  • Step 4: Check Reputation and Reviews: Assess “Peer reviews,” “Client reviews” (Google, Avvo, Yelp), and “Disciplinary history” with the state bar. A reputable lawyer should have “consistent positive reviews and little to no disciplinary history.”
  • Step 5: Ask the Right Questions: Prepare specific questions for consultations, such as “How many cases like mine have you handled?”, “What is your success rate?”, “What are your fees?”, and “Will you personally handle my case?” A good lawyer “will welcome questions, explain clearly, and answer honestly.”
  • Step 6: Evaluate Communication Style: Prioritize “Responsiveness,” “Clarity” in explanations, “Transparency” about the process and fees, and “Empathy.” Avoid attorneys who “rush through answers, seem distracted, or delegate everything to staff.”
  • Step 7: Review the Fee Structure: Most personal injury attorneys use a “contingency fee basis,” typically “33% to 40% of your award.” Crucially, “You should always get a written agreement that outlines the fee structure.”
  • Step 8: Assess Compatibility and Trust: Recognize that this is a long-term relationship. Key questions include: “Do I trust this person to represent my best interests?” and “Do I feel respected and heard?”
  1. Red Flags to Watch For:
  • Be wary of “Guaranteed outcomes” (no ethical lawyer can promise a win).
  • Other red flags include “High-pressure tactics,” “Lack of transparency,” “Too many cases” (suggesting insufficient attention to yours), and “Poor communication.” The guide advises, “If your instincts are telling you something’s off, trust them.”
  1. Working with Your Attorney:
  • The process typically involves “Initial investigation,” “Medical evaluation,” “Demand letter,” “Negotiation phase,” and potentially “Litigation” and “Trial preparation.”
  • Your lawyer “should keep you informed regularly and involve you in important decisions.”
  1. Conclusion: Making a Confident Decision:
  • The guide reiterates that “Choosing a personal injury attorney is one of the most important decisions you’ll make.”
  • It encourages not rushing the process and finding a lawyer who is “not only competent but committed to fighting for you.”
The central themes revolve around the critical importance of selecting the right personal injury attorney and outlining a structured, step-by-step process to ensure a well-informed and confident decision. The guide emphasizes that this choice significantly impacts the case outcome, stress levels, and resolution speed.

How to Choose a Personal Injury Attorney: A Comprehensive Study Guide

Quiz

Answer the following questions in 2-3 sentences each.

  1. What is the primary role of a personal injury attorney?
  2. Why is it crucial to choose the right personal injury attorney?
  3. Name three common types of personal injury cases mentioned in the guide.
  4. Before starting your research for an attorney, what initial steps should you take to “understand your needs”?
  5. List three reliable sources you can use to research potential personal injury attorneys.
  6. Besides years of experience, what specific type of experience should you look for when evaluating an attorney’s credentials?
  7. What does a personal injury attorney’s “reputation” encompass, and how can you check it?
  8. Explain the concept of a “contingency fee basis” for personal injury attorneys.
  9. What are two “red flags” that might indicate a personal injury attorney is not suitable for your case?
  10. What is the final, non-legal factor to consider when making your decision about an attorney, according to the guide?

Quiz Answer Key

  1. A personal injury attorney is a legal professional specializing in cases involving physical or psychological injury due to another party’s negligence. Their main role is to advocate for victims and help them obtain compensation for damages like medical expenses, lost wages, and pain and suffering.
  2. Choosing the right attorney is crucial because it can significantly impact the outcome of your case, including the settlement amount, the stress experienced, and the case resolution speed. A good attorney can maximize compensation, navigate complex processes, and protect clients from pitfalls.
  3. Three common types of personal injury cases include car and truck accidents, medical malpractice, and slip and fall injuries. Other examples are product liability, workplace injuries, and wrongful death cases.
  4. Before researching, you should understand your needs by defining the severity of your injury, the complexity of liability, the insurance coverage involved, and whether you are open to settling or likely heading to court. This clarity helps evaluate potential attorneys.
  5. Three reliable sources for researching potential personal injury attorneys are personal referrals from family/friends, state bar association directories, and online directories like Avvo or Super Lawyers. Google and Yelp reviews, as well as law firm websites, are also useful.
  6. Beyond general years of experience, you should look for an attorney with trial experience, especially if your case might go to court. It’s also important to find someone with a track record of securing high-value settlements or verdicts in cases similar to yours.
  7. An attorney’s reputation encompasses their standing in the legal community and among past clients. You can check it by looking at peer reviews (e.g., Martindale-Hubbell), client reviews on sites like Google and Avvo, and searching for any disciplinary history with the state bar.
  8. A contingency fee basis means that the personal injury attorney only gets paid if you win your case. Their fee is typically a percentage (e.g., 33% to 40%) of the final award, and clients should clarify whether expenses are deducted before or after the fee.
  9. Two red flags to watch for include an attorney guaranteeing outcomes, as no ethical lawyer can promise a win. Another red flag is high-pressure tactics to sign a contract quickly, or a general lack of transparency regarding fees, processes, or experience.
  10. The final, non-legal factor to consider when choosing an attorney is compatibility and trust. You should feel that the attorney is someone you trust to represent your best interests, who respects you, and who explains things thoroughly and empathetically.

Essay Format Questions

  1. Discuss the multi-faceted importance of selecting a personal injury attorney who specializes in the specific type of injury claim you have. Provide examples from the text to illustrate why this specialization matters.
  2. Outline the comprehensive steps an individual should take, from initial self-assessment to final decision, when choosing a personal injury attorney, as described in the guide. Emphasize the iterative nature of the process.
  3. Analyze the role of communication and transparency in the attorney-client relationship, both during the selection process and once representation begins. How do these factors contribute to a successful outcome and client satisfaction?
  4. Evaluate the various methods for researching and vetting potential personal injury attorneys. Discuss the strengths and weaknesses of at least three different research avenues mentioned in the guide (e.g., online directories, personal referrals, state bar associations).
  5. Beyond legal credentials and experience, what “soft skills” or interpersonal qualities does the guide suggest are crucial for a personal injury attorney to possess, and why are these important for the client’s experience and case outcome?

Glossary of Key Terms

  • Personal Injury Attorney: A legal professional specializing in cases involving physical or psychological injury suffered by an individual due to the negligence or wrongdoing of another party. They advocate for victims to obtain compensation.
  • Negligence: Failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, resulting in harm to another. A key element in many personal injury cases.
  • Compensation: The monetary award received by a plaintiff (the injured party) in a personal injury case to cover damages such as medical expenses, lost wages, pain and suffering, and other losses.
  • Medical Malpractice: A type of personal injury case where a healthcare professional or facility acts negligently, causing injury or harm to a patient.
  • Product Liability: A type of personal injury case where an individual is injured by a defective or unsafe product.
  • Premises Liability: A type of personal injury case concerning injuries that occur on another person’s property due to the property owner’s negligence.
  • Wrongful Death: A personal injury case filed on behalf of the deceased’s survivors when a person dies due to another party’s negligence or wrongful act.
  • Licensure: The official permission granted by a state bar association allowing an individual to practice law within that jurisdiction. Essential for any practicing attorney.
  • Track Record: An attorney’s past performance and history of success, particularly in securing favorable settlements or verdicts in cases.
  • Contingency Fee Basis: A fee arrangement common in personal injury cases where the attorney’s payment is contingent upon winning the case. The attorney receives a percentage of the client’s award, but no fee if the case is lost.
  • Settlement: An agreement reached between the parties in a legal dispute, often outside of court, to resolve the case and avoid a trial.
  • Litigation: The process of taking legal action, involving the filing of a lawsuit and potentially proceeding to trial.
  • Red Flags: Warning signs or indicators that suggest a personal injury attorney may not be suitable or ethical, such as guaranteeing outcomes or using high-pressure tactics.
  • Demand Letter: A formal letter sent by the plaintiff’s attorney to the at-fault party’s insurer, outlining the details of the case, the injuries sustained, and the compensation being sought.

Contact Chris Lehnes

US Labor Market Adds 139,000 Jobs, Beating Expectations

The U.S. labor market continued to show signs of resilience in May 2025, with the economy adding 139,000 jobs. This figure outpaced the widely expected 125,000 new jobs, signaling that despite economic headwinds, employers are still hiring. However, beneath this headline number lies a more complex and nuanced story, one that reflects a shifting employment landscape, mixed sectoral trends, growing political and economic uncertainty, and an evolving policy environment.

A Closer Look at the Numbers

The addition of 139,000 jobs in May marked a modest improvement over expectations but represented a slower pace of growth compared to the earlier part of the year. This figure, although higher than forecasts, suggests that while the labor market remains strong, it is not immune to the broader macroeconomic challenges.

The unemployment rate held steady at 4.2%, a level considered healthy by historical standards. However, the labor force participation rate declined to 62.4%, reflecting a noticeable drop in the number of people either working or actively looking for work. This decrease equated to approximately 625,000 individuals leaving the labor force, which could be attributed to factors such as early retirements, discouraged workers, or changes in family dynamics.

Average hourly earnings rose by 0.4% in May and showed a 3.9% increase over the past 12 months. This level of wage growth suggests that employers are still competing for talent, although the pace of earnings increases has moderated somewhat from previous peaks.

Sectoral Employment Trends

Job growth in May was concentrated in a few key sectors, revealing much about the current state of the economy and where the demand for labor is strongest.

Healthcare and Social Assistance continued to be a major driver of job creation, adding a combined 70,000 jobs. The aging population, ongoing public health needs, and expansion of healthcare services are contributing factors. Hospitals, outpatient care centers, and elderly care facilities remain in urgent need of skilled workers.

US Labor Market Adds 139,000 Jobs, Beating Expectations

Leisure and Hospitality added 48,000 positions, a reflection of the sustained rebound in travel and dining. Americans are continuing to spend on experiences, even amid inflationary pressures, driving demand in restaurants, hotels, and entertainment venues.

Construction showed stable if unspectacular growth. Despite higher interest rates dampening the housing market, non-residential construction and infrastructure projects supported by federal and state spending have helped maintain employment levels.

Education services experienced modest job gains as schools and universities finalize hiring for the summer and fall terms.

On the downside, manufacturing employment contracted by 8,000 jobs, pointing to deeper issues in the industrial sector. Global supply chain disruptions, ongoing trade tensions, and declining export orders have weighed on factory output. Machinery, automotive, and electronics manufacturers have been particularly hard hit.

Professional and Business Services saw job losses, particularly in administrative support and consulting roles. This decline may indicate that businesses are becoming more cautious with overhead expenses.

Retail trade employment remained essentially flat, with some growth in grocery and general merchandise offset by declines in department stores and specialty retailers. Changing consumer habits, the shift to online shopping, and cost-cutting strategies are reshaping this sector.

Government employment fell significantly, with the federal workforce shrinking by over 20,000 positions. The reduction was attributed to budget cuts, hiring freezes, and agency consolidations. State and local governments showed slight increases in staffing, particularly in education and public safety.

The Role of Wage Growth and Inflation

Wage growth remains a central concern for both policymakers and employers. The 3.9% annual increase in average hourly earnings is above recent inflation rates, indicating that workers are seeing real income gains. This could support continued consumer spending, a key driver of the U.S. economy.

However, sustained wage growth also raises the possibility of demand-pull inflation. Employers may pass higher labor costs onto consumers in the form of price increases, complicating efforts to maintain price stability. For workers, while higher wages are welcome, their impact can be eroded if inflation accelerates in response.

Employers are responding by investing more in automation, technology, and training to reduce reliance on labor. Some industries, particularly logistics and customer service, are fast-tracking their adoption of AI and robotics to curb future labor costs.

Federal Workforce Downsizing

The continuing reduction in federal employment is becoming a defining feature of 2025’s labor landscape. Since January, the federal government has eliminated nearly 60,000 jobs. Cuts have spanned a wide range of departments, including environmental agencies, national parks, health services, and regulatory bodies.

These reductions are driven by both political ideology and fiscal necessity. The administration has prioritized deficit reduction and bureaucratic efficiency, arguing that a leaner government will improve service delivery and reduce waste. Critics, however, warn that reduced staffing in key agencies could hinder oversight, emergency response, and service provision.

The impact of these cuts is also regional. Many federal employees work outside of Washington, D.C., in communities that rely heavily on government jobs. The ripple effects of these layoffs include reduced consumer spending, lower local tax revenues, and community disinvestment.

Business Sentiment and Hiring Caution

While job growth remains positive, business sentiment is increasingly cautious. Companies are facing a complex mix of challenges: elevated interest rates, trade tensions, and an unpredictable regulatory environment. As a result, many are slowing down their hiring plans.

Capital expenditures are being delayed or scaled back, and firms are focusing on efficiency rather than expansion. Sectors like technology and finance, which led the post-pandemic hiring boom, are now tightening their belts. Layoffs, hiring freezes, and organizational restructuring have become more common.

Uncertainty surrounding future government policy is also a factor. Businesses are waiting to see how legislative battles over tax policy, trade agreements, and spending will resolve before committing to new hires.

Interest Rates and Monetary Policy

The Federal Reserve’s approach to monetary policy remains a subject of intense scrutiny. The central bank has held interest rates steady amid a mix of strong labor market data and easing inflation. While some policymakers and business leaders advocate for rate cuts to support growth, the Fed remains focused on data.

Job growth, wage increases, and consumer spending are all being closely monitored. A premature rate cut could reignite inflation, while maintaining higher rates for too long could risk a slowdown. The Fed is walking a tightrope, balancing growth and stability.

The labor market data from May may give the Fed enough breathing room to maintain current rates, avoiding abrupt policy shifts. However, future decisions will hinge on incoming data on prices, employment, and economic activity.

Consumer Behavior and Labor Dynamics

The dynamics of the labor market are being reshaped by shifting consumer behavior. Americans are prioritizing spending on services and experiences over goods, driving employment in restaurants, hotels, and entertainment. This shift is helping some sectors but hurting others, such as manufacturing and retail.

In addition, remote work and hybrid models have permanently altered the geography of employment. Workers are relocating to lower-cost regions, changing commuting patterns, and influencing regional labor markets. Employers are responding by expanding hiring in new areas and downsizing office footprints in traditional urban centers.

Another notable trend is the increasing desire for flexibility. Workers are seeking jobs that offer better work-life balance, benefits, and autonomy. This is leading employers to revamp job roles, redesign work environments, and offer non-traditional employment arrangements.

Labor Force Participation Trends

The decline in labor force participation is a growing concern. While the unemployment rate remains low, the drop in participation suggests underlying issues. Long-term unemployment, early retirements, and caregiving responsibilities are contributing factors.

Women, particularly those with young children, continue to face barriers to re-entering the workforce. Inadequate childcare options, high costs, and inflexible job structures are significant obstacles.

Additionally, a growing number of older workers are opting for early retirement, either voluntarily or due to job displacement. Re-skilling and vocational training programs have not kept pace with the needs of a changing economy, limiting opportunities for displaced workers.

Addressing these participation challenges will require coordinated efforts, including investments in childcare, adult education, and workforce development.

Regional Labor Market Variations

The labor market picture varies significantly by region. Sunbelt states such as Texas, Florida, and Arizona continue to see robust job growth, driven by population inflows, business relocations, and infrastructure spending. Cities in these states are becoming magnets for investment and innovation.

In contrast, parts of the Midwest and Northeast are experiencing slower growth or outright job losses. Aging populations, declining industrial activity, and outmigration are contributing to labor market stagnation.

States with diverse economies and strong public-private partnerships are weathering the storm better. Regions that have invested in education, technology, and transportation are seeing more resilient employment trends.

The Gig Economy and Alternative Work Arrangements

Another notable development is the continued expansion of the gig economy. More Americans are engaging in freelance, contract, and part-time work, either by choice or necessity. While this provides flexibility, it also presents challenges such as income instability, lack of benefits, and limited labor protections.

Platforms offering ride-sharing, food delivery, and home services continue to absorb labor, particularly among younger and lower-skilled workers. Policymakers are grappling with how to regulate this sector while preserving its flexibility.

The rise of gig and freelance work is also influencing how traditional employers compete for talent. Some are adopting hybrid models, offering contract work alongside permanent roles to attract a wider pool of candidates.

Future Outlook and Policy Considerations

Looking ahead, the labor market faces a delicate balance. The positive momentum from May’s job gains could continue if consumer spending holds up and businesses regain confidence. However, downside risks remain.

Global economic uncertainty, geopolitical tensions, and potential domestic political gridlock could weigh on future hiring. The outcome of upcoming elections may also influence fiscal and regulatory policy, further shaping the labor market’s trajectory.

Policymakers will need to be proactive in addressing participation challenges, workforce development, and regional disparities. Investments in education, infrastructure, and childcare could support a more inclusive recovery.

Businesses, for their part, must adapt to changing worker expectations, embrace technology, and foster cultures of inclusion and flexibility. Doing so will not only improve retention but also position them for long-term success.

In conclusion, while the May 2025 jobs report provides reason for cautious optimism, it also serves as a reminder that the labor market is undergoing profound structural changes. The path forward will depend on the ability of employers, policymakers, and workers to adapt to this new reality. The coming months will be crucial in determining whether the economy can maintain its momentum or whether deeper challenges lie ahead.

How Small Businesses can use Factoring as Bridge Financing

How Small Businesses can use Factoring as Bridge Financing

In the world of small business operations, managing cash flow can often be one of the biggest challenges. Business owners frequently find themselves in situations where they need immediate working capital to cover expenses, purchase inventory, pay employees, or invest in growth—long before customers pay their invoices. In such scenarios, accounts receivable factoring emerges as a powerful financial tool that can act as bridge financing, helping businesses stay afloat and even thrive.

In the world of small business operations, managing cash flow can often be one of the biggest challenges. Business owners frequently find themselves in situations where they need immediate working capital to cover expenses, purchase inventory, pay employees, or invest in growth—long before customers pay their invoices. In such scenarios, accounts receivable factoring emerges as a powerful financial tool that can act as bridge financing, helping businesses stay afloat and even thrive.

This article explores the concept of accounts receivable factoring, how it works, the benefits and risks, and why it can serve as an effective bridge financing solution for small businesses.


Understanding Accounts Receivable Factoring

Accounts receivable factoring, often simply referred to as “factoring,” is a financial transaction in which a business sells its accounts receivable (unpaid customer invoices) to a third party, known as a factor, at a discount. In return, the business receives immediate cash—typically 70% to 90% of the invoice value—while the factor takes on the responsibility of collecting payment from the customers.

How It Works

The factoring process generally follows these steps:

  1. Invoice Generation: A business provides goods or services to its customers and issues invoices, usually with payment terms of 30, 60, or 90 days.
  2. Sale to Factor: Instead of waiting for the invoice to be paid, the business sells the receivable to a factoring company.
  3. Advance Payment: The factoring company pays a portion of the invoice value upfront—known as the advance rate.
  4. Collection: The factor then collects the payment directly from the customer.
  5. Remainder Payment: Once the customer pays the invoice in full, the factor remits the remaining balance to the business, minus a factoring fee (typically 1% to 5%).

Bridge Financing Defined

Bridge financing refers to a short-term funding solution used to cover immediate cash flow needs until a business secures more permanent financing or receives expected income. It’s often used to “bridge the gap” between a financial need and a future event, such as:

  • Collecting on outstanding invoices
  • Receiving a bank loan
  • Closing a round of equity investment
  • Selling an asset or property

Bridge financing is crucial in time-sensitive situations and often carries higher costs or stricter terms due to the short-term risk for lenders.


Why Small Businesses Need Bridge Financing

Small businesses often experience erratic cash flows. Even profitable enterprises can run into short-term liquidity crunches. Here are some common scenarios where bridge financing is necessary:

  • Seasonal businesses ramping up for a busy season but needing cash to buy inventory.
  • Service providers waiting 30–90 days for customer payments while needing to pay employees weekly.
  • Manufacturers needing funds to cover production costs before receiving payment for completed goods.
  • Startups between investment rounds but needing funds to sustain operations.

For many small businesses, traditional loans or lines of credit may not be available, especially if they have limited credit history or lack collateral. This is where accounts receivable factoring can fill the void.


How Accounts Receivable Factoring Serves as Bridge Financing

Accounts receivable factoring fits the definition of bridge financing because it offers immediate liquidity based on income that is expected in the near future. Here’s how factoring acts as a bridge:

1. Accelerating Cash Flow

When a business issues an invoice with net 30, 60, or 90-day terms, the funds are essentially locked up for that duration. Factoring unlocks that value immediately, allowing the business to maintain operations or capitalize on opportunities without waiting.

2. Providing Short-Term Relief

Factoring provides funding until longer-term solutions are realized. For example, a business awaiting a loan approval can use factoring to maintain cash flow in the interim. Once the loan is secured, the business can rely less on factoring.

3. No New Debt Incurred

Bridge loans often come with interest and increase the business’s debt burden. Factoring, on the other hand, is not a loan—it’s a sale of assets. This makes it a particularly attractive option for businesses that want to preserve their balance sheets.

4. Flexibility and Scalability

Unlike bank loans with rigid terms, factoring is inherently flexible. The more invoices a business generates, the more capital it can access. This makes it an ideal bridge for growing businesses scaling their operations.


Advantages of Using Factoring as Bridge Financing

1. Quick Access to Cash

Factoring companies can often approve applications and release funds within a few days. This speed is critical in time-sensitive scenarios where traditional financing may take weeks or months.

2. Improved Cash Flow Management

By converting receivables into immediate cash, businesses can better plan and manage their operational expenses without delays.

3. No Credit Score Requirements

Factoring is based on the creditworthiness of a business’s customers—not the business itself. This makes it viable for new or struggling businesses with strong accounts receivable.

4. Support for Growth Opportunities

If a business receives a large new order but lacks the funds to fulfill it, factoring can provide the necessary capital. This allows businesses to say “yes” to growth rather than turning down opportunities due to cash constraints.

5. Outsourced Collections

Some factoring arrangements include credit checks and collections, saving the business time and resources in chasing down payments.


Disadvantages and Considerations

While factoring offers many benefits, it’s not without downsides. Business owners should consider the following:

1. Cost

Factoring fees can range from 1% to 5% or more per month. Over time, this can be more expensive than traditional financing.

2. Customer Perception

Some customers may view factoring negatively, especially if they are contacted by the factoring company. This can affect customer relationships if not handled properly.

3. Qualification Requirements

Not all invoices are eligible. Factoring companies typically only accept invoices from creditworthy customers, which may limit the amount of capital available.

4. Loss of Control

With non-recourse factoring, the factor assumes the risk of non-payment. However, with recourse factoring, the business must repay the advance if the customer fails to pay—introducing additional risk.


Types of Factoring Arrangements

Understanding the different types of factoring is important when considering it as bridge financing.

1. Recourse vs. Non-Recourse

  • Recourse Factoring: The business is liable if the customer doesn’t pay the invoice. This is cheaper but riskier.
  • Non-Recourse Factoring: The factor assumes the risk of non-payment, but charges higher fees.

2. Spot Factoring vs. Full-Service Factoring

  • Spot Factoring: The business factors a single invoice or a few invoices on a one-time basis.
  • Full-Service Factoring: The business enters into a long-term relationship with the factor, often factoring all receivables.

3. Disclosed vs. Undisclosed Factoring

  • Disclosed: The customer is informed that the invoice has been sold to a factor.
  • Undisclosed: The customer pays the business, which then remits payment to the factor (also known as invoice discounting).

Use Cases: Real-World Examples of Bridge Financing with Factoring

Example 1: A Seasonal Retailer

A toy store generates most of its revenue during the holiday season. In the fall, the business needs to order large quantities of inventory. Since customer invoices from previous sales are still unpaid, the retailer sells them to a factoring company and receives immediate funds to stock up. By December, customer payments are in, and the business is flush with cash again—making factoring a perfect seasonal bridge.

Example 2: A Construction Company

A small construction firm wins a contract to build a commercial property but needs to pay subcontractors and buy materials upfront. Bank financing is unavailable due to limited credit history. The company factors its receivables from a previous job, receives 85% of the invoice value in cash, and uses it to fund the new project while awaiting customer payment.

Example 3: A Tech Startup

A software development company with several corporate clients faces a funding gap between seed and Series A investment rounds. Though it has solid contracts and invoices pending payment in 60 days, it lacks cash for payroll and rent. Factoring those receivables helps the startup survive the interim without taking on high-interest loans or diluting equity.


When Factoring Is the Right Bridge Financing Option

Factoring may be a strategic bridge financing option if:

  • You have a predictable flow of accounts receivable.
  • Your customers are creditworthy and pay on time.
  • You need funds quickly to cover essential operations or fulfill new business.
  • You want to avoid additional debt or can’t qualify for a bank loan.
  • You are in a high-growth or seasonal industry that demands immediate working capital.

Selecting a Factoring Partner

Not all factoring companies are created equal. When choosing a partner, small businesses should consider:

  • Reputation and Experience: Choose a factor with industry experience and positive reviews.
  • Fee Structure: Understand all costs, including advance rate, factoring fee, and any hidden charges.
  • Recourse Terms: Know who is responsible in case of customer non-payment.
  • Flexibility: Can you factor only the invoices you choose?
  • Customer Service: Will the factor treat your customers professionally and protect your relationships?

Conclusion

Accounts receivable factoring is a powerful and flexible tool for small businesses facing short-term cash flow challenges. As a form of bridge financing, it offers quick access to working capital without the burden of debt or the wait for customer payments. While it comes at a cost and involves handing over some control, the benefits—especially for businesses with steady receivables and creditworthy customers—can far outweigh the downsides.

In an economic landscape where agility is often the key to survival and success, factoring can be the bridge that helps small businesses cross from financial uncertainty to stability and growth.

Contact Factoring Specialist, Chris Lehnes

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

The Next Conversation by Jefferson Fisher – Summary and Analysis

“The Next Conversation” by Jefferson Fisher focused on improving communication skills, particularly in challenging situations. Drawing on his experiences as a trial lawyer and his personal life, Fisher presents practical strategies for having difficult conversations with greater confidence, control, and connection. Key themes include managing emotional triggers, the importance of pausing to regulate responses, setting boundaries, and reframing conversations to achieve understanding rather than winning arguments. The author emphasizes that effective communication is about connecting with others on a deeper level and prioritizing real growth in relationships.

Executive Summary:

The provided excerpts from Jefferson Fisher’s “The Next Conversation” outline a practical and personal approach to improving conversational skills, focusing on assertiveness, self-control, and genuine connection. The author, a trial lawyer, emphasizes that the book is not about law but about speaking boldly and authentically. Key themes include understanding the “hidden conversation” occurring in others, the importance of personal values as a conversational compass, practical techniques for self-regulation (breathing, quick scans, small talks), the power of strategic pauses, building confidence through assertive language and actions, setting and enforcing boundaries, managing defensiveness, and cultivating connection. The core function for improved communication involves three steps: “Say it with control,” “Say it with confidence,” and “Say it to connect,” focusing on expressing one’s view, needs, and truth.

Main Themes and Key Ideas in Next Conversation

  1. The Nature of Conversation Beyond the Spoken Words:
  • The author highlights that conversations often have a “hidden conversation” beneath the surface, driven by internal thoughts, feelings, and triggers that the other person is not expressing. Recognizing this “tip of the iceberg” is crucial for understanding disproportional reactions. As Fisher states: “Anytime someone takes a level one conversation and jumps it up to level ten, it’s telling. And what it tells you is that there’s another conversation happening inside that person’s head that you weren’t invited to.”
  • Communication is more than just transmission of words; it’s about connection. True connection is achieved through understanding, empathy, and vulnerability, rather than simply conveying information.
  1. The Importance of Personal Values in Next Conversation
  • Values serve as a “compass” in conversations, guiding your approach and ensuring your actions align with what you find important and meaningful.
  • Instead of solely focusing on the other person, conversational values answer the question: “How will I show up for myself?” and “Who do you want to be seen as after the conversation ends?”
  • Identifying personal values can be done through self-reflection or by asking close friends or family.
  1. Developing Self-Control and Awareness:
  • Lack of self-awareness during heated discussions is a significant barrier to effective communication. The author notes the physical phenomenon where the sound of our own voice heard internally differs from how others hear it, illustrating this disconnect. “The sound we hear in our head when we speak actually comes from vibrations through our bones… The sound you hear when you listen to a recording comes from sound waves through the air…” This highlights how we may not “even hear yourself right now?” as others do.
  • Breathing Techniques: Breathing is presented as a fundamental tool for gaining control and calming the nervous system, particularly in high-stress situations.
  • Nose Breathing: Encourages slower, deeper breaths by increasing air resistance and pulling airflow deeper into the lungs, preventing signs of ignition (anxiety/stress).
  • Exhale Longer: Techniques like the “physiological sigh” (double inhale, long exhale) are scientifically proven methods for rapid de-stressing.
  • Rhythmic Breathing: Patterned breathing (like Box Breathing) lowers heart rate and sharpens mental focus, a technique used by Navy SEALs in combat to control adrenaline and maintain motor skills. “The benefit of rhythmic breathing is a lower heart rate, which can sharpen a soldier’s mental focus.”
  • Quick Scans: A four-step process (Breathe, Close eyes, Examine, Label the emotion) for checking in with oneself emotionally and physically during a conversation to identify stress and re-align with goals and values. Verbally acknowledging the emotion identified in the quick scan injects transparency and honesty into the conversation.
  • Small Talks: Concrete, context-tied phrases or positive affirmations used to re-center oneself and build a confident mindset. These are more specific than abstract affirmations and are often rooted in personal history or meaning.
  1. The Strategic Power of Pauses:
  • Pauses are not just silence; they are a powerful communication tool that indicates confidence and self-control. “When well timed, pauses are a sign of confidence and self-control.”
  • Pauses gift you with “control over time,” allowing time to reflect, choose your words, assess readiness, observe the other person, and reconsider your approach.
  • Short Pauses (1-4 seconds): Act like “reading glasses,” adding emphasis to specific words and conveying that what is about to be said has been thought about. Using a short pause before answering questions makes you sound “firmer. More sure of yourself.”
  • Long Pauses (5-10 seconds): Act as “mirrors,” forcing the other person to reflect on their own words and behavior. They are particularly effective when dealing with rudeness, insults, or dishonesty. “When someone is rude to you, insults you, or belittles you, a long pause is your greatest weapon.” Dishonest people often feel compelled to fill the silence and may unravel their own stories. “It’s in the silence that dishonest people feel as if they have everything to prove.”
  1. Building Confidence Through Assertive Language and Actions:
  • Confidence is a feeling that arises from experiences and actions, not something that can be simply willed into existence. “Confidence is a feeling. It can’t be summoned at will.”
  • Using Assertive Language: Removing hesitant or undermining words strengthens your voice. Examples include replacing “I just wanted to touch base…” with “I wanted to touch base…” or “I’m sort of wondering…” with “I’ll…” or “I guess I’m just looking for…” with “I need…” “What assertiveness requires isn’t difficult. You can do this.”
  • Proving it to Yourself: Acting in line with your stated intentions builds self-reliance and confidence. Telling people what you are going to do and then doing it demonstrates that “when you say something, you mean it.” Conversely, failing to follow through can lead to being “walked over” and establishing a baseline of being “all bark and no bite.”
  • Expressing Needs Unapologetically: Advocating for yourself and clearly stating your needs is fundamental to assertiveness. Phrases like “I won’t accept that,” “I want fair expectations,” or starting sentences with “I need…” (e.g., “I need a moment,” “I need to speak with you”) empower you to take ownership of your wants.
  • Replacing Apologies with Gratitude: Over-apologizing diminishes self-worth and suggests you are an inconvenience. Replacing “Sorry I’m late” with “Thank you for your patience” or “Sorry to bother you” with “I appreciate your help” shifts the dynamic and affirms your right to occupy space.
  • Removing Filler Words and Underselling Phrases: “Ums, ahs, and uhs” signal hesitation, while phrases like “I hate to bother you” or “This might sound stupid” undersell your contribution and put the listener in an awkward position. Cutting these “verbal crutches” makes you sound more intentional and confident. Similarly, avoiding “Does that make sense?” prevents sounding unsure or potentially offending the listener.
  • Saying “I’m confident”: Beginning statements with “I’m confident” immediately signals assurance to the listener and builds credibility.
  1. Mind Your Tone, Eye Contact, and Cadence:
  • Tone: Assertive communication balances respect for self and respect for the other person. It is a “steady, even tone,” distinct from aggressive communication which disregards the other person.
  • Uptalk: Ending declarative sentences with a rising intonation suggests uncertainty and should be avoided to sound more confident. Ending sentences with a downward or neutral inflection is key.
  • Eye Contact: Maintaining eye contact, particularly at the end of sentences, reinforces your message. Avoiding prolonged eye contact prevents appearing too intense.
  • Cadence: A measured, clear pace allows words to be fully understood and conveys thoughtfulness and confidence.
  1. Managing Difficult Conversations and Defensiveness:
  • Responding to Rudeness and Dismissiveness: A strategic approach involves a short pause, followed by a question of intent (e.g., “Did you mean for that to sound rude?”). This technique redirects focus and challenges the other person’s behavior.
  • Addressing Bad Apologies: The author provides direct counters to common manipulative apologies:
  • “I was just kidding/joking/messing around”: Counter with “Then be funnier,” “Then find new material,” or “I wasn’t.” This exposes the attempt to minimize harm and shifts responsibility back to the speaker.
  • Stopping Interruptions: Using the interrupting person’s name loudly and clearly can effectively stop them and keep them engaged rather than defensive.
  • Understanding Defensiveness: Defensiveness is a natural reaction to perceived threats (social evaluation, personal identity, loss). It builds a “wall” that prevents listening and connection. “Defensiveness Builds a Wall.”
  • Overcoming Defensiveness:Catch Yourself: Use a conversational breath (pause) to slow down and signal to your body that there is no threat.
  • Let Their Words Fall: Imagine their words dropping to the ground instead of reaching you, allowing you to decide if they are worth addressing. Use the phrase “Put it down, [your name].”
  • Get Curious: Shift focus inward and ask probing questions about the source of their behavior or missing information.
  • Softening “Why” Questions: Replacing “why” with “what,” “when,” or “how” reduces the perceived challenge to autonomy. “It’s not that they’re asking you a question that upsets you. It’s that ‘why’ feels like they’re questioning you.”
  • Acknowledging First: Validating the other person’s feelings or perspective before presenting your own (“Acknowledge first”) keeps the door open for dialogue and avoids creating a defensive reaction like “Yeah but.”
  1. The Power of Saying “No” and Building Boundaries:
  • Saying “no” is a complete sentence and a fundamental act of reclaiming your power and prioritizing your well-being. The fear of saying no can be overcome by embracing the potential consequences and trusting that others are more emotionally resilient than you imagine. “Disappointing someone often means you’re doing something right.”
  • A boundary is not a line, but a “perimeter” – a defined space around what you value. “If you want to know what someone values, look for where the boundary sits.”
  • Building a boundary involves clearly stating what you “don’t” do (e.g., “I don’t accept how you’re treating me,” “I don’t work on weekends”) or redirecting the conversation (boundaries of presence or purpose).
  • Boundaries give others an “operator’s manual” on how to communicate with you. Discomfort from a boundary is often a sign that it is working.
  1. Setting Clear Expectations for Conversations:
  • Before engaging in a significant conversation, it’s beneficial to schedule it and set clear expectations. Ask about the other person’s “capacity” or “bandwidth” (e.g., “Do you have capacity to talk about Monday’s meeting agenda this afternoon?”).
  • Suggesting a narrow or specific time frame allows both parties to prepare mentally and emotionally.
  • Avoid vague requests like “Got a second?” as they create uncertainty about the topic and required time investment. Informing someone how much time you need sets clear expectations.

Important Facts/Statistics (from cited studies):

  • A 2023 study from Stanford Medicine confirmed the powerful benefits of the physiological sigh technique for de-stressing in real time.
  • Navy SEALs use rhythmic breathing (like Box Breathing) to lower heart rate and sharpen mental focus in combat situations.
  • Latest studies in neuroscience and psychology confirm that language (word choice) significantly influences emotions, mindset, and reality.
  • Studies show a psychological link between personal identity and concepts like competence, autonomy, purpose, and values.
  • Research highlights loss as a fundamental human experience with psychological consequences.
The Next Conversation by Jefferson Fisher - Summary and Analysis

Key Quotes:

  • “It’s about how to speak boldly, with your chin up, to embrace the vulnerability that comes with laying all your cards on the table.”
  • “What I became more curious about, however, was the disproportionality of his reaction… what it tells you is that there’s another conversation happening inside that person’s head that you weren’t invited to.”
  • “Values in conversations serve as your compass, ensuring that your goals set the direction of what you truly find important, fulfilling, and meaningful… your conversational values answer the question, “How will I show up for myself?””
  • “No, I mean really. You don’t. The sound we hear in our head when we speak actually comes from vibrations through our bones.”
  • “To slow down your breathing, breathe through your nose… Your nasal passages are of course much narrower than your mouth, so your nose naturally encourages slower, deeper breathing.”
  • “A 2023 study from Stanford Medicine confirmed powerful benefits associated with a breathing technique known as a physiological sigh, noted as one of the fastest ways to de-stress in real time.”
  • “If you don’t think your breath has much to do with controlling verbal conflict, then it’s worth looking at what it means to those who’ve mastered it at the furthest extremes of physical conflict. The Navy SEALs consider rhythmic breathing so mission-critical…”
  • “According to the latest studies in neuroscience and psychology, your language—that is, the actual words you use to form your thoughts—significantly influences your emotions and mindset, and eventually your reality.”
  • “What’s so powerful about a pause. It gifts you with the ability to control time.”
  • “When well timed, pauses are a sign of confidence and self-control. More often than not, the person who controls the pace of the conversation is the person most in control of themselves.”
  • “When someone is rude to you, insults you, or belittles you, a long pause is your greatest weapon.”
  • “Honest people don’t mind the discomfort of a pause… Dishonest people, on the other hand, typically can’t stand it.”
  • “Confidence is a feeling. It can’t be summoned at will.”
  • “What assertiveness requires isn’t difficult. You can do this.”
  • “You’re proving to yourself that you believe in your own abilities—small, assertive actions that accumulate into experiences that build your confidence.”
  • “To be more assertive, set your default to stating your needs. Begin sentences with “I need.” This simple shift in language empowers you to take ownership of your wants and to communicate them clearly.”
  • “Whether you realize it or not, over-apologizing takes a toll on your mindset. You’ll see yourself more as a nuisance or annoyance.”
  • “When you use these sorts of phrases, you also put a social obligation on the other person to relieve or forgive you… It forces the two of you to have a mini conversation about your insecurity before you even get to your point.” (referring to underselling phrases)
  • “If I tell you only what words to use and not how they sound, I’m not keeping my promise. What exactly does confidence sound like? It’s a balance. I imagine hearing music through a pair of headphones, when it isn’t too loud in either ear. The sound is balanced.” (referring to tone)
  • “To sound more confident, end your sentences with a downward or neutral inflection.” (referring to uptalk)
  • “A boundary isn’t a line. It’s a perimeter.”
  • “If your boundary creates discomfort for another person, it’s not a sign that the boundary is wrong. It’s a sign that it’s working.”

This briefing document provides a comprehensive overview of the central tenets and actionable strategies presented in the provided excerpts, offering valuable insights into enhancing personal communication and building more confident and assertive interactions.\


Understanding Effective Communication

Study Guide

This study guide is designed to help you review key concepts and techniques discussed in the provided text excerpts.

I. The Nature of Conversation and Argument

  • Understanding the author’s background and perspective (Prologue).
  • The difference between winning an argument and fostering connection (Chapter 1).
  • The importance of values in guiding conversational goals and self-presentation (Why Your Conversations Need Values).
  • Recognizing and interpreting the “other conversation happening inside” someone’s head (Chapter 1).
  • The impact of your words on yourself and others (Mindset).
  • Transmission vs. communication (Transmission vs. Communication).

II. Controlling Your Physical and Psychological Responses

  • Understanding the physical and psychological triggers that impact communication (Psychological triggers, Physical triggers).
  • The concept of the “ignition phase” and its effects (Chapter 5, The Gift of a Pause).
  • The power of breathing to regulate your physiological response (Control the Moment, When your first word is your breath).
  • Nose breathing vs. mouth breathing (1. To slow down your breathing…).
  • The importance of longer exhalations (2. To maintain calm…).
  • Rhythmic breathing techniques (3. To clear your mind…).
  • The quick scan method for increased self-awareness in conversation (How to do a quick scan).
  • Steps of a quick scan (1. Breathe…, 2. Close your eyes…, 3. Examine…, 4. Label the emotion…).
  • Verbally acknowledging your emotional state (By verbally acknowledging…).

III. Building Confidence and Assertiveness

  • Confidence as a feeling, not a switch (Confidence Is a Feeling).
  • Strategies for building confidence through language and action:
  • Removing “just” and other hesitant words (Lesson 1: Cut the “just”).
  • Proving it to yourself by stating intentions and following through (Lesson 2: Prove it to yourself).
  • Expressing your needs unapologetically (Lesson 3: Express your needs unapologetically).
  • Avoiding over-apologizing and using gratitude instead (Lesson 4: Replace apologies with gratitude).
  • Using clear and concise language (Lesson 5: Be specific).
  • Removing filler words and verbal crutches (Lesson 6: Remove filler words).
  • Avoiding underselling yourself and your contributions (Lesson 7: Never undersell).
  • Cutting excess phrases that clutter assertiveness (Lesson 8: Cut the excess).
  • Refining your vocabulary (Lesson 9: Upgrade your vocabulary).
  • Using the phrase “I’m confident” (Lesson 10: Say “I’m confident”).
  • Mind your tone: achieving balance between respect for self and others (Mind Your Tone).
  • Avoiding uptalk (Mind Your Tone).
  • Using eye contact effectively (Eye Contact).
  • The importance of cadence (Cadence).

IV. Utilizing Silence and Pauses

  • The value of pauses in controlling the pace and impact of conversation (The Gift of a Pause).
  • Pauses as a tool for reflection and reconsideration (Time to reflect, Time to reconsider).
  • How and when to use different types of pauses (How and When to Use Pauses).
  • Short pauses (1-4 seconds) for emphasis and sounding deliberate (Short pauses are reading glasses).
  • Long pauses (5-10 seconds) for reflection and as a “mirror” (Long pauses are mirrors).
  • Recognizing the difference between a long pause and a time-out (Long pauses are mirrors).

V. Handling Difficult Interactions and Setting Boundaries

  • Responding to rudeness, insults, and belittlement (Chapter 8).
  • Using a short pause to weigh words (1. Give it a short pause).
  • Asking questions of intent (2. Ask a question of intent).
  • Employing long pauses as a “mirror” (Long pauses are mirrors).
  • Recognizing and responding to different types of bad apologies (Bad Apologies).
  • The conditional apology (The conditional apology).
  • The no-apology apology (The no-apology apology).
  • The no-empathy apology (The no-empathy apology).
  • The justification apology (The justification apology).
  • Dealing with interruptions (Interruptions).
  • Using their name to regain attention (Step 2: Use their name).
  • Asking for permission to finish (Step 3: Ask for permission).
  • Learning to say “no” effectively (Saying “No”).
  • Saying “no” as a complete sentence (No is a complete sentence).
  • Overcoming the fear of disappointing others (You get over the fear…).
  • A better way to say “no” than starting with gratitude and ending with “but” (Another problem is…).
  • Three steps for saying “no” to simple invitations (To start building your confidence…).
  • Building and enforcing boundaries (How to Build a Boundary).
  • Boundaries as perimeters, not lines (Defining the perimeter).
  • Communicating limits clearly (Give others an operator’s manual…).
  • Boundaries of presence and purpose (Here’s a good rule of thumb…).
  • The discomfort a boundary creates can be a sign it’s working (If your boundary creates discomfort…).

VI. Strategies for Connecting and Effective Framing

  • The three steps for building connection: Say it with control, Say it with confidence, Say it to connect (Say it to Connect).
  • Understanding the concept of “frames” in conversation (CHAPTER 10 Frames).
  • Identifying conversational spikes and behaviors that hinder connection (The Sound of Your Spikes).
  • Recognizing and managing defensiveness (Defensiveness Builds a Wall, Here’s how to stop yourself…).
  • Catching yourself with a conversational breath (1. Catch yourself).
  • Letting their words fall (2. Let their words fall).
  • Getting curious about the source of their behavior (3. Get curious).
  • Replacing “why” questions with “what,” “when,” or “how” (It’s not that they’re asking…).
  • Acknowledging others’ perspectives first to keep the door open for dialogue (3. Acknowledge first).
  • Setting clear expectations for conversations by suggesting a time frame or topic (Setting the Expectation).
  • The importance of meaningful time (While you may like that they suggest…).
  • How NOT to set aside time for conversation (By the way, here’s how you don’t want to set aside time…).

Quiz

Answer each question in 2-3 sentences.

  1. According to the text, what is the primary difference between “winning” an argument and the approach advocated in the book?
  2. How does the author suggest you can identify the “other conversation” happening inside someone’s head?
  3. Explain the concept of conversational values and their purpose.
  4. Describe the physiological benefits of breathing through your nose during a conversation, as discussed in the text.
  5. What is the purpose of performing a “quick scan” before or during a conversation?
  6. According to the author, how does removing the word “just” affect the assertiveness of a sentence?
  7. Why is over-apologizing detrimental to building confidence, according to the text?
  8. What is the difference in purpose and effect between a short pause (1-4 seconds) and a long pause (5-10 seconds) in conversation?
  9. How does using someone’s name help to interrupt them effectively and maintain connection?
  10. What is the author’s definition of a personal boundary, and how does it differ from simply “drawing a line”?

Answer Key

  1. The author suggests that “winning” arguments is less important than fostering connection and understanding. The focus is on effective communication and self-control rather than a competitive mindset.
  2. You can identify the “other conversation” when someone’s reaction seems disproportionate to the current situation. It indicates hidden thoughts or feelings driving their behavior.
  3. Conversational values act as a compass, guiding your behavior based on what you find important and meaningful. They answer the question of how you will show up for yourself in a conversation.
  4. Breathing through your nose increases air resistance, leading to slower, deeper breaths that prevent signs of the ignition phase. It also pulls air deeper into your lungs using the diaphragm, promoting calm.
  5. A quick scan is used to increase self-awareness during a conversation by checking in with your physical sensations and emotions. It helps you identify tension and label your current feeling.
  6. Removing “just” makes a sentence sound more assertive and less hesitant. It signals that you mean what you are saying and are not trying to minimize your point.
  7. Over-apologizing can negatively impact your mindset by making you see yourself as a nuisance or annoyance. It implies that your presence or contribution is an inconvenience.
  8. A short pause adds emphasis and makes your words sound more deliberate and certain. A long pause provides time for reflection for both parties and can act as a mirror, prompting the other person to reconsider their words.
  9. Using someone’s name catches their attention and can stop an interruption without causing them to become defensive. It helps to maintain an open channel for dialogue compared to more confrontational interjections.
  10. A personal boundary is defined as a perimeter, like a circle or rectangle, which is fully enclosed and represents a defined space unique to its owner. It visually communicates limits and signifies what the person values, unlike a simple line which can be perceived as an endpoint.

Essay Format Questions

  1. Analyze the author’s argument for why confidence should be viewed as a feeling rather than something that can be summoned at will. Discuss the strategies proposed for building confidence through language and action, and evaluate how these strategies contribute to cultivating this feeling.
  2. The text emphasizes the importance of self-control in effective communication, particularly in challenging situations. Discuss the various techniques presented for managing physiological and psychological responses to conflict, such as breathing exercises and quick scans. How do these techniques work together to help an individual regain control?
  3. Explore the multifaceted role of pauses in communication as described in the text. Analyze how different types and lengths of pauses can be used strategically to influence the dynamics of a conversation, convey meaning, and demonstrate self-control.
  4. The author presents personal boundaries as essential for self-respect and effective communication. Discuss the concept of boundaries as “perimeters” and how they are built and enforced. Evaluate the potential impact of well-defined boundaries on interpersonal relationships.
  5. The text identifies several “spikes” or behaviors that hinder connection in conversations, such as defensiveness and personal attacks. Choose two of these spikes and explain the author’s proposed methods for recognizing and countering them. Discuss the underlying principles behind these methods and why they are effective in fostering more constructive dialogue.

Glossary of Key Terms

Accountability of Defensiveness: Recognizing the impulse to blame others and choosing instead to look inward at one’s own reactions and choices.

Assertiveness: The ability to speak boldly, with your chin up, embracing vulnerability, saying what you mean, and meaning what you say, while choosing courage over comfort. It’s about respecting yourself and the other person.

Autonomy Triggers: Psychological triggers related to feeling that your choices or actions are being questioned, threatening your sense of independence.

Boundaries: Perimeters that define a personal space, communicating limits on acceptable behavior and signifying what an individual values.

Boundary of Presence: A boundary that re-centers the conversation by stating why you are there when the other person brings up unrelated issues or tries to distract.

Boundary of Purpose: A boundary that corrects the focus of the conversation by stating what you are there to talk about when the other person raises past issues or attacks your character.

Box Breathing: A rhythmic breathing technique involving inhaling, holding, exhaling, and holding, each for a set count (often four seconds), to promote calm and mental focus.

Cadence: The rhythm and pace of your speech, which influences how your message is received and can convey confidence or uncertainty.

Conditional Apology: An apology that includes a condition or qualification, such as “I’m sorry if I offended you.”

Conversational Breath: A conscious breath taken before speaking, particularly in a heated discussion, to slow down and regain control.

Conversational Values: Principles that guide your behavior and priorities in conversations, acting as a compass to ensure your goals align with what you find important and meaningful.

Cooling Phase: The phase in an argument where the heart rate slows down, and logical thinking begins to return, following the ignition phase.

Defensiveness: A reaction triggered by the perception of threat, leading to a desire to fight against or run from the perceived danger, hindering open communication.

Emotional Flood: The overwhelming influx of emotions during conflict, which can make it difficult to think clearly and respond logically.

Filler Words: Words or sounds like “ums,” “ahs,” and “uhs” that fill gaps in speech, often signaling hesitation or lack of confidence in formal settings.

Frames: The underlying perspectives or structures that influence how individuals perceive and engage in conversations.

Ignition Phase: The initial phase in an argument where the sympathetic nervous system is activated, leading to increased heart rate, faster thinking, and a readiness for fight or flight.

“Just” (as a word to cut): A word that can dilute the assertiveness of a sentence and signal hesitation or a desire to minimize one’s point.

Justification Apology: An apology that attempts to minimize the impact of actions by offering an excuse, such as “I was just kidding.”

Long Pause: A period of silence lasting between five and ten seconds, used for reflection, creating anticipation, and acting as a “mirror” for the other person.

Mindset: The collection of thoughts, beliefs, and attitudes that influence your emotions and behavior, significantly shaped by the words you use.

No-Apology Apology: An apology that has the structure of an apology but lacks genuine remorse or accountability.

No-Empathy Apology: An apology that focuses on the apologizer’s discomfort or feelings rather than acknowledging the impact on the other person.

Other Conversation: The hidden thoughts, feelings, or experiences that are driving someone’s disproportionate reaction in a conversation.

Over-apologizing: Apologizing excessively, which can diminish one’s self-worth and imply taking up too much space.

Pauses: Moments of silence in conversation used strategically to control pace, add emphasis, reflect, and demonstrate self-control.

Personal Identity Threats: Psychological triggers that challenge your sense of self, worth, competence, autonomy, purpose, or values.

Physiological Sigh: A breathing technique involving a double inhalation followed by a long exhale, noted as a fast way to de-stress.

Psychological Triggers: Internal factors that evoke emotional responses in conversation, including social evaluation, personal identity, and loss.

Purpose Triggers: Psychological triggers related to feeling that your sense of purpose or goals are being questioned or undermined.

Quick Scan: A four-step process involving breathing, closing eyes, examining physical sensations, and labeling emotions, used to increase self-awareness during conversation.

Rhythmic Breathing: A method relying on a consistent pattern of inhalations and exhalations to lower heart rate and sharpen mental focus.

Short Pause: A period of silence lasting between one and four seconds, used to add emphasis, sound deliberate, and demonstrate thoughtfulness.

Small Talk (as a mindset tool): A short, concrete phrase tied to context that empowers you and re-centers your mindset, acting like a personalized affirmation.

Social Evaluation Triggers: Psychological triggers related to the fear of negative judgment, rejection, or humiliation in social interactions.

Spikes (Conversational): Behaviors that hinder connection in conversations, such as interrupting, raising your voice, or resorting to personal attacks.

Tactical Breathing: The Navy SEALs’ term for rhythmic breathing used to control physiological responses in high-stress situations.

Time-Out: A period of silence longer than a long pause (over ten seconds), which is no longer considered a strategic pause but a complete disengagement.

Tone: The quality and inflection of your voice, which conveys emotion and attitude and is crucial for assertive communication.

Transmission vs. Communication: Transmission is simply sending a message; communication involves the message being received and understood.

Underselling: Using language that diminishes the value of your contributions or yourself, such as “I hate to bother you” or “This might sound stupid.”

Uptalk: The tendency to end sentences with a rising intonation, making statements sound like questions or signaling uncertainty.

Verbal Crutches: See Filler Words.

Contact Factoring Specialist, Chris Lehnes

How Trump’s EU Tariff Threats Will Impact Small Businesses

How Trump’s EU Tariff Threats Will Impact Small Businesses

Trump has revived a familiar playbook—threatening tariffs on international trade partners, particularly the European Union (EU). Trump has suggested imposing significant tariffs on EU goods, which he argues would protect American manufacturing and restore trade balances. While such measures may appeal to some domestic industries and political bases, the potential ramifications for U.S. small businesses are far-reaching and complex. For many of these enterprises, Trump’s EU tariff could usher in higher costs, disrupted supply chains, and retaliatory trade measures that could severely impact their ability to grow and compete.


Understanding the Nature of EU Tariffs

Tariffs are essentially taxes on imported goods. When the U.S. imposes tariffs on EU products, the immediate effect is to raise the cost of those imports. The Trump administration previously imposed tariffs on European steel and aluminum, which led to counter-tariffs by the EU on iconic American products like Harley-Davidson motorcycles and bourbon whiskey.

Now, Trump has floated the possibility of broader and more aggressive tariffs, possibly up to 10-30% on all EU imports. This threat has sparked concerns not only among international trading partners but also within the domestic business community, especially small businesses that rely heavily on imported goods, components, or export access to the EU market.


Increased Costs for Import-Dependent Small Businesses

A significant number of U.S. small businesses depend on imported goods—either as finished products or as components used in manufacturing. These include everything from Italian textiles and French wines to German auto parts and Swedish machinery. If tariffs are imposed on these goods, their prices will rise accordingly.

Small businesses, which often operate on tight margins, are less equipped than large corporations to absorb these cost increases. Unlike multinational corporations, small firms typically lack the scale to negotiate better prices or shift to alternate suppliers quickly. The result is either a reduction in profit margins or increased prices passed on to consumers—both of which could damage competitiveness.

Take, for example, a small wine distributor in California that specializes in European vintages. A 20% tariff on French or Italian wines could significantly raise the wholesale cost, forcing the business either to raise prices or reduce offerings—potentially alienating their customer base. This sort of scenario could play out across thousands of small enterprises nationwide.


How Trump’s EU Tariff Threats Could Impact US Small Businesses

Supply Chain Disruptions

Beyond increased costs, new tariffs often lead to supply chain instability. Many small U.S. manufacturers source precision tools, machinery, and components from the EU due to their high quality and reliability. Tariffs would not only make these imports more expensive but could also delay shipments as companies scramble to navigate new regulations, customs procedures, or seek alternative suppliers.

These disruptions could be particularly damaging for startups and growth-stage businesses that are trying to scale quickly. Delays in receiving essential components could lead to missed deadlines, unfulfilled orders, and damaged customer relationships.

Furthermore, uncertainty around tariffs can be just as damaging as the tariffs themselves. Businesses may delay investment or expansion decisions due to the unpredictability of trade policy. This “wait and see” approach can stifle innovation and limit job creation in the small business sector.


Retaliation by the EU

Another major concern for U.S. small businesses is the risk of retaliatory tariffs. Historically, the EU has not hesitated to respond to American tariffs with measures of their own. During Trump’s first term, the EU targeted quintessentially American products in states with significant political influence—bourbon from Kentucky, motorcycles from Wisconsin, and jeans from North Carolina.

Retaliatory tariffs could directly affect small American exporters that rely on European markets. According to the Office of the United States Trade Representative, the EU is the U.S.’s second-largest trading partner. Many small businesses export products ranging from agricultural goods to software services to Europe.

If retaliatory tariffs are imposed, these firms could see decreased demand, increased costs for compliance, or complete loss of access to certain markets. For instance, a small cheese producer in Vermont that exports artisan products to France or Germany could suddenly find itself priced out of the market.


Increased Administrative Burdens

Tariffs don’t only increase costs—they also increase complexity. Small businesses often lack dedicated compliance departments and may struggle to navigate the paperwork, classifications, and customs processes associated with tariff changes. In a post-tariff scenario, they may be forced to hire consultants or legal counsel to remain compliant, diverting limited resources away from core business activities.

For companies that ship internationally, changes in Harmonized Tariff Schedule codes, documentation requirements, and import/export licensing can become burdensome. While large corporations may integrate these processes into existing operations, for a ten-person firm, it can be a major logistical and financial strain.


Shifting Consumer Preferences and Market Behavior

If tariffs lead to noticeable price increases on EU goods, consumer behavior may shift as well. For example, customers may move away from higher-end European brands in favor of cheaper, domestically-produced or non-EU alternatives. This shift may benefit some U.S. producers but could hurt small retailers and e-commerce stores that have built their brand identities around offering European products.

Moreover, if economic tensions escalate between the U.S. and EU, it could dampen transatlantic tourism, educational exchanges, and collaborative ventures—all areas where small service providers, tour operators, and educational consultancies may be affected.


Potential Long-Term Shifts in Global Trade Alliances

Beyond the immediate effects, Trump’s EU tariff threats could signal a long-term shift in how the U.S. engages with global trade partners. If the EU and other nations view the U.S. as an unreliable or antagonistic trade partner, they may pivot more firmly toward building stronger ties with China or other emerging markets.

This shift could isolate U.S. small businesses from future opportunities in Europe, particularly in sectors like technology, green energy, and digital services, where EU nations are investing heavily and seeking global partnerships. American small tech firms, for instance, could miss out on lucrative opportunities in digital infrastructure or cybersecurity due to strained transatlantic relations.


Conclusion

Trump’s EU tariff threats may be politically expedient in the short term, appealing to those concerned about deindustrialization or trade deficits. However, the fallout from such a policy could be severe for U.S. small businesses. From rising costs and supply chain disruptions to retaliatory measures and lost market access, the risks are broad and multifaceted.

While the rhetoric of protectionism may aim to shield American businesses, the reality is that in today’s globalized economy, small firms are among the most vulnerable to trade shocks. Policymakers must weigh the long-term economic consequences and consider the voices of small business owners when crafting trade strategies. A thriving small business sector depends not only on access to domestic markets but also on predictable, fair, and open international trade.

Contact Factoring Specialist, Chris Lehnes


Main Themes and Key Ideas:

The core argument presented is that while Trump’s tariff threats may be intended to protect American manufacturing and address trade imbalances, they pose significant and complex challenges for U.S. small businesses. The source argues that these challenges could severely impact the ability of small firms to grow and compete.

  • Tariffs as Taxes on Imports: The document clearly defines tariffs as taxes on imported goods, explaining how they directly increase the cost of those imports. The previous imposition of tariffs on EU steel and aluminum and subsequent EU counter-tariffs on American products like Harley-Davidson motorcycles and bourbon whiskey are cited as examples of this dynamic.
  • Increased Costs for Import-Dependent Small Businesses: A major concern highlighted is the vulnerability of small businesses that rely on imported goods or components. Unlike larger corporations, small firms often lack the resources to absorb increased costs or quickly find alternative suppliers. This can lead to reduced profit margins or higher prices for consumers, damaging competitiveness.
  • Quote: “Small businesses, which often operate on tight margins, are less equipped than large corporations to absorb these cost increases.”
  • Quote: “The result is either a reduction in profit margins or increased prices passed on to consumers—both of which could damage competitiveness.”
  • The example of a California wine distributor specializing in European vintages facing significant price increases due to tariffs is used to illustrate this point.
  • Supply Chain Disruptions: The source emphasizes that tariffs can lead to instability in supply chains, particularly for small manufacturers relying on high-quality EU components or machinery.
  • Quote: “Beyond increased costs, new tariffs often lead to supply chain instability.”
  • Delays in receiving essential components can harm startups and growth-stage businesses by leading to missed deadlines and unfulfilled orders.
  • Uncertainty surrounding tariff policies is also presented as damaging, potentially delaying investment and expansion decisions.
  • Risk of Retaliatory Tariffs: The historical tendency of the EU to impose counter-tariffs in response to U.S. measures is a significant concern. These retaliatory tariffs directly impact U.S. small businesses that export to the EU, the U.S.’s second-largest trading partner.
  • Quote: “Another major concern for U.S. small businesses is the risk of retaliatory tariffs.”
  • Quote: “Historically, the EU has not hesitated to respond to American tariffs with measures of their own.”
  • Examples like bourbon from Kentucky and motorcycles from Wisconsin are used to demonstrate how the EU has previously targeted politically influential areas.
  • Small exporters, from agricultural producers to software services, could face decreased demand or complete loss of market access.
  • Increased Administrative Burdens: Tariffs add complexity and administrative hurdles for small businesses that often lack dedicated compliance departments. Navigating new regulations, customs procedures, and documentation can be a significant logistical and financial strain.
  • Quote: “Tariffs don’t only increase costs—they also increase complexity.”
  • Quote: “For a ten-person firm, it can be a major logistical and financial strain.”
  • Shifting Consumer Preferences and Market Behavior: Tariff-induced price increases on EU goods could lead to consumers favoring cheaper alternatives, potentially harming small retailers and e-commerce businesses built around offering European products. Escalating economic tensions could also negatively impact transatlantic tourism and collaborative ventures, affecting small service providers.
  • Potential Long-Term Shifts in Global Trade Alliances: The threat of tariffs could cause the EU and other nations to view the U.S. as an unreliable partner, potentially leading them to strengthen ties with other markets like China. This could isolate U.S. small businesses from future opportunities in the EU, particularly in growing sectors.
  • Quote: “If the EU and other nations view the U.S. as an unreliable or antagonistic trade partner, they may pivot more firmly toward building stronger ties with China or other emerging markets.”

Conclusion:

The source concludes that while Trump’s tariff threats may serve short-term political goals, the economic consequences for U.S. small businesses are potentially severe and multifaceted. The document stresses that small firms are particularly vulnerable to trade shocks in a globalized economy and argues for policymakers to consider the long-term impacts and the perspectives of small business owners when formulating trade strategies. A thriving small business sector is presented as reliant on predictable, fair, and open international trade, not just domestic market access.


Study Guide: The Impact of Trump’s EU Tariff Threats on Small Businesses

Quiz: Short Answer Questions

  1. What is the fundamental definition of a tariff as described in the source material?
  2. Beyond increasing costs, what is another significant impact of tariffs on supply chains for small businesses?
  3. How have retaliatory tariffs from the EU historically affected specific American products?
  4. According to the source, why are small businesses often less equipped than large corporations to absorb increased costs from tariffs?
  5. What administrative burden do tariffs often place on small businesses?
  6. How might shifting consumer preferences impact small retailers if tariffs are imposed on EU goods?
  7. What “wait and see” approach can result from uncertainty around tariffs, and what is its consequence?
  8. How could a small cheese producer in Vermont be affected by EU retaliatory tariffs?
  9. What long-term shift in global trade alliances could result from continued EU tariff threats?
  10. What does the source suggest policymakers should consider when crafting trade strategies related to tariffs?

Quiz Answer Key

  1. A tariff is essentially a tax on imported goods.
  2. Tariffs can lead to supply chain instability by delaying shipments and making it difficult to find alternative suppliers.
  3. Retaliatory tariffs have historically targeted iconic American products such as Harley-Davidson motorcycles, bourbon whiskey, and jeans.
  4. Small businesses often operate on tight margins and lack the scale to negotiate better prices or quickly shift to alternate suppliers, making them less able to absorb increased costs.
  5. Tariffs increase complexity and administrative burdens, requiring small businesses to navigate paperwork, classifications, and customs processes.
  6. If tariffs lead to noticeable price increases on EU goods, consumer behavior may shift away from these products, potentially hurting small retailers that offer them.
  7. Uncertainty around tariffs can lead businesses to delay investment or expansion decisions, stifling innovation and limiting job creation.
  8. A small cheese producer exporting to Europe could find itself priced out of the market due to retaliatory tariffs.
  9. Continued EU tariff threats could signal a long-term shift where the U.S. is viewed as an unreliable trade partner, leading other nations to strengthen ties with different markets.
  10. The source suggests policymakers must weigh the long-term economic consequences and consider the voices of small business owners.

Essay Format Questions

  1. Analyze the multifaceted ways in which potential EU tariffs under a Trump administration could impact the financial health and operational capabilities of small businesses, drawing specific examples from the provided text.
  2. Discuss the concept of retaliatory tariffs and explain how the historical responses of the EU to U.S. tariffs illustrate the interconnectedness and potential vulnerability of small American exporters.
  3. Evaluate the claim that while protectionism may aim to shield American businesses, in a globalized economy, small firms are among the most vulnerable to trade shocks, using evidence from the source.
  4. Explore the non-monetary impacts of tariff threats on small businesses, focusing on supply chain disruptions, administrative burdens, and the psychological effects of uncertainty.
  5. Consider the potential long-term consequences of escalating trade tensions between the U.S. and the EU on the ability of American small businesses to participate in future global opportunities, particularly in emerging sectors.

Glossary of Key Terms

  • Tariffs: Taxes imposed on imported goods.
  • EU (European Union): A political and economic union of European countries.
  • Supply Chains: The sequence of processes involved in the production and distribution of a commodity.
  • Retaliatory Tariffs: Tariffs imposed by a country in response to tariffs imposed by another country.
  • Import-Dependent: Businesses that rely heavily on goods or components sourced from other countries.
  • Tight Margins: Operating with a small difference between revenue and costs, making businesses more sensitive to price increases.
  • Scale: The size or extent of a business’s operations, often influencing its ability to negotiate prices or absorb costs.
  • Administrative Burdens: The requirements and complexities associated with regulations, paperwork, and compliance.
  • Harmonized Tariff Schedule codes: A standardized system for classifying traded products.
  • Globalization: The process by which businesses or other organizations develop international influence or start operating on an international scale.
  • Trade Deficits: The amount by which the cost of a country’s imports exceeds the value of its exports.
  • Protectionism: The theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports.

How Cuts at the SBA Are Damaging Small Businesses

How Cuts at the SBA Are Damaging Small Businesses

The Small Business Administration (SBA) has historically served as a lifeline for entrepreneurs across the United States. By facilitating access to loans, offering training and mentorship programs, and providing disaster relief, the SBA has played a critical role in supporting the country’s economic backbone: small businesses. However, recent federal budgetary decisions and administrative restructuring have led to significant cuts within the agency. These changes are having far-reaching consequences for small businesses, especially those in underserved or rural areas.

Strategic SBA Reorganization or Service Erosion?

In early 2025, the SBA announced a sweeping reorganization initiative aimed at increasing efficiency and aligning the agency more closely with its core missions. Key elements of the plan included a 43% reduction in staff and the decentralization of services from the central office to regional and field locations. The agency maintained that these steps were designed to streamline operations, focus on disaster response and capital access, and eliminate redundant positions created during the COVID-19 pandemic.

While the SBA leadership emphasized that essential services would not be impacted, many stakeholders expressed skepticism. Reducing the workforce by nearly half is likely to limit the SBA’s capacity to respond to the diverse and often urgent needs of small businesses. The decrease in personnel could result in slower loan processing times, fewer outreach initiatives, and diminished ability to provide personalized guidance and mentorship.

Budget Cuts to Core SBA Programs

In addition to organizational restructuring, the SBA has faced deep funding cuts under recent federal budget proposals. These proposed reductions affect multiple programs that are crucial to the vitality and success of small businesses.

How Cuts at the SBA Are Impacting Small Businesses

Entrepreneurial Development

One of the most significant impacts is to entrepreneurial development programs. Funding reductions threaten the future of Women’s Business Centers, Veteran Business Outreach Centers, and mentorship networks like SCORE. These programs have helped thousands of entrepreneurs gain business knowledge, refine their strategies, and connect with experienced mentors. With fewer resources, their ability to serve communities will inevitably diminish.

Access to Capital in Underserved Areas

Cuts to funding for Community Development Financial Institutions (CDFIs) represent another major setback. CDFIs provide critical capital to minority-owned businesses, startups, and entrepreneurs in economically disadvantaged areas who often struggle to secure traditional financing. Reducing this support could curtail business development in communities already facing economic hardship.

Rural Business Support

Small businesses in rural America may be among the hardest hit. Rural Development programs—formerly bolstered through agencies such as the USDA—have experienced reductions that could jeopardize initiatives like broadband expansion and renewable energy improvements. Without these investments, rural entrepreneurs may face increasing difficulty in competing with their urban counterparts.

Real-World Effects: Entrepreneurs Speak Out

The ramifications of these policy shifts are not merely theoretical; they are being felt on the ground by small business owners across the country.

Jacob Thomas, a third-generation farmer in Kansas, has seen his family’s modest farm struggle after the elimination of federal programs that once purchased produce directly from small farms. This loss of income has led to a 10% drop in revenue, threatening the long-term viability of the operation.

Similarly, small manufacturers and food producers in rural areas have made investments in energy-efficient infrastructure based on the expectation of receiving government rebates and support. With those programs now on hold or dramatically scaled back, these businesses are left shouldering costs they hadn’t planned to bear alone.

Additionally, entrepreneurs from underserved communities report increasing difficulties in accessing capital. Many relied on CDFI loans or SBA microloans to start or expand their businesses. With fewer funds and staff available to process these applications, many find themselves unable to move forward with business plans.

Political Responses and Public Pushback

These cuts have not gone unnoticed on Capitol Hill. Lawmakers from both parties have voiced concern about the potential consequences of reducing SBA resources. Some argue that in an already challenging economic environment, it is shortsighted to cut support for the very entities that generate two-thirds of net new jobs in the U.S. economy.

There is also concern about the SBA’s ability to respond effectively to future disasters. In past crises—from hurricanes to wildfires to the pandemic—the SBA was instrumental in providing emergency funding and guidance. With a smaller workforce and fewer resources, the agency’s capacity to respond quickly and efficiently to future events could be severely compromised.

In response to public and political outcry, some legislators are pushing for targeted reinvestment in programs that have shown a strong return on investment, particularly those aimed at empowering women, veterans, and minority entrepreneurs.

The Road Ahead for SBA

For many small businesses, the future is uncertain. The shift in the SBA’s priorities and the associated cuts require business owners to seek alternative support systems. Community organizations, local chambers of commerce, and state-level small business agencies may need to fill the gap left by the federal government.

Entrepreneurs will also need to become more self-reliant, utilizing digital tools and private networks to find mentorship, financing, and business development resources. However, these options are not equally accessible to all, and the risk is that the gap between well-connected entrepreneurs and those in marginalized communities will continue to widen.

At the same time, small business advocacy groups are mobilizing to push for policy reversals and increased investment. They argue that empowering small businesses is not just a matter of economic development but of social equity and national resilience.

SBA Impact Summary

The SBA has long served as a foundation of support for the entrepreneurial spirit that drives the U.S. economy. However, the agency’s recent restructuring and funding cuts are creating ripple effects that threaten to destabilize small businesses, particularly those that are most vulnerable.

Whether these changes result in long-term improvements in efficiency or lasting damage to the small business ecosystem will depend largely on how the government, private sector, and local communities respond. What is clear, though, is that small businesses are facing a new reality—one that will require adaptability, advocacy, and innovation to navigate successfully.

Contact Factoring Specialist, Chris Lehnes

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When I Start My Business I’ll be Happy – By Sam Vander Wielen – Summary and Analysis

When I Start My Business I’ll be Happy – By Sam Vander Wielen

The provided excerpts from Sam Vander Wielen’s book offer a candid and practical guide to online entrepreneurship, heavily influenced by the author’s personal journey from a dissatisfying legal career to building a successful legal template business. The core message is that entrepreneurship is not a magic fix for personal unhappiness, but rather an opportunity for significant personal growth and the ability to navigate life’s inevitable challenges while building a thriving business. The excerpts highlight the importance of self-awareness, embracing challenges, conducting thorough research (especially regarding demand and supply), strategically building and nurturing an audience (particularly through email marketing), and fostering a strong, community-focused customer experience. Mindset plays a crucial role, with the author addressing common obstacles like perfect timing excuses, impostor syndrome, scarcity mindset, the challenges of being a beginner, and the fear of competition and comparison.

Main Themes and Key Ideas:

  1. Entrepreneurship as a Vehicle for Growth, Not a Happiness Fix:
  • A central tenet is that starting a business won’t automatically solve personal problems or bring happiness. The title itself, “When I Start My Business, I’ll Be Happy,” is presented as a common misconception.
  • Instead, entrepreneurship is framed as an opportunity for personal development and confronting one’s “shadow side and flaws.”
  • Quote: “If you’re disappointed because you thought your business was going to fix your life, I’m sorry to be a downer, but it won’t. What it can do is give you the opportunity to make many facets of your life richer and fuller. It will gift you the opportunity to be a better person, one who faces their fears and shadows.”
  • The author emphasizes the importance of a healthy sense of self outside of one’s job or business.
  1. Embracing Challenges and Life’s “Speed Bumps”:
  • The author’s narrative is punctuated by personal difficulties, including a scary flight experience, the disillusionment with her legal career, the passing of both her parents within a short period, and navigating imposter syndrome and other mindset challenges.
  • These experiences are presented as formative and strengthening, both personally and for her business.
  • Quote: “Throughout this book, I will share parts of my own story, as well as a few stories from my colleagues, to demonstrate that life’s challenges don’t just make us stronger; they make our businesses stronger, too.”
  • The author views painful moments as potential “fuel” for action and growth.
  1. The Importance of “Why” – Focusing on Impact and Others:
  • While personal motivations exist, the author encourages entrepreneurs to define a deeper “why” that extends beyond personal gain.
  • This outward-focused “why” involves considering the impact on others and the people the business is intended to help.
  • Quote: “When it comes to defining your why behind starting and running a business, go deeper than what having a business will afford you. How will your business impact others? Who are the people you’re here to help? What do they need help with? What impact will it have on them, the people around them, and the universe as a whole?”
  1. Strategic Planning and Preparation Before “Diving In”:
  • Contrary to common “start before you’re ready” advice, the author advocates for careful planning and preparation to avoid failed businesses and dashed hopes.
  • This includes financial preparation (personal budget, start-up expenses, saving), ensuring necessary qualifications/skills, and developing a viable business plan.
  • Quote: “When it comes to cold plunging, jumping in without thinking is key to success. However, the same is not true when it comes to starting your own business. In this case, it’s crucial to be as prepared as possible and do things right, even if that means going slower than you want to.”
  • The “foot in both worlds” phase, working a traditional job while building the business, is acknowledged as stressful but valuable for testing ideas and building readiness.
When I Start My Business I'll be Happy - By Sam Vander Wielen - Summary and Analysis
  1. Mindset Obstacles and How to Overcome Them:
  • A significant portion is dedicated to addressing common “entrepreneur virus” symptoms.
  • Perfect Timing Excuses: Fear often manifests as believing the timing isn’t right. The author suggests asking practical questions about preparation and recognizing fear’s role in keeping one “safe.”
  • Impostor Syndrome: This involves doubting one’s abilities and feeling undeserving of success. It’s a recurring challenge throughout the business journey.
  • Quote: “I still have a little impostor syndrome… It doesn’t go away, that feeling that you shouldn’t take me that seriously. What do I know? I share that with you because we all have doubts in our abilities, about our power and what that power is.” – Michelle Obama (quoted in the text)
  • The concept of “future-proofing” (acting like the person who runs the business you aspire to have) is offered as a strategy.
  • Scarcity vs. Abundance Mindset: Scarcity focuses on lack and conservation, while abundance sees limitless possibilities and resources. Recognizing scarcity patterns and practicing gratitude and admiration are suggested for shifting.
  • Being a Beginner Sucks: Acknowledging the discomfort of being new and emphasizing the value of learning and continuous improvement.
  • Fear of Competition and Comparison: Discouraging excessive focus on competitors (“cloudy competitors”) as it hinders creativity and fosters comparison.
  1. The Importance of Uniqueness (Personal and Business):
  • Standing out requires embracing personal quirks and unique business approaches, products, vibes, or methodologies.
  • Quote: “Honestly, it’s just flat-out boring to see the same person, voice, personality, and viewpoint expressed on the same issues online… Most people don’t want to dress exactly like my mom. But people were envious of how confidently she carried herself. That’s what got people’s attention…”
  • Businesses should highlight their unique selling propositions, whether it’s a specific skill set, a named methodology, a distinct vibe (e.g., “unstuffy lawyer”), or an innovative product.
  • Educating the audience on the value of qualified professionals (if applicable) is also a form of differentiation.
  1. Researching Demand and Supply for Business and Product Ideas:
  • Thorough research is crucial for both the initial business idea and specific products.
  • Demand research involves confirming that others need and want the product or service, not just the entrepreneur. Methods include online searches (forums, social media), conversation analysis, and attempting to beta sell.
  • Supply research means understanding existing competition. While competition indicates demand, entrepreneurs must identify their unique differentiators or “hole in the market.”
  • Quote: “To determine if outside demand exists ask yourself these questions: Are people asking for it? Are people searching for it? Are there conversations happening about it? Are there already other people out there doing something similar (indicating a market exists)?”
  1. Building and Nurturing an Email List as a Core Asset:
  • Email marketing is presented as a crucial strategy for building an audience and fostering connection.
  • The author emphasizes the value of data derived from email engagement (open rates, click-through rates, unsubscribes) for informing future content and targeting.
  • Welcome Sequences: Automated email series are vital for setting expectations, providing immediate value, and sharing “hero stories.”
  • Weekly Emails: Consistent, valuable content is key to staying “top of mind” and earning trust. These emails should provide value while also centering products as solutions and encouraging engagement.
  • Quote: “I see my weekly email as a way to stay top of mind and continue earning their trust, respect, and time.”
  • Branding newsletters with themes and pitching them based on the value provided is recommended.
  1. Creating and Selling Products (including a “Million-Dollar Product”):
  • The concept of a “million-dollar product” is introduced, emphasizing that success is defined on one’s own terms and doesn’t have to reach that revenue mark.
  • The process involves researching demand and supply specifically for the product, even if the business is already established.
  • Minimum Viable Product (MVP): The approach of launching a basic version of a product to test viability before investing heavily in design and features.
  • Beta Testing: Selling the MVP to a small group at a discount in exchange for feedback is a key step in refining the product.
  • Analyzing Results: Tracking the tangible outcomes customers achieve with the product is vital for marketing and improvement.
  • Pricing: Calculating costs, desired profit margins, and the number of sales needed to cover expenses and pay oneself.
  • Promotions and Sales (Live Launches): Complementing evergreen sales funnels with time-bound promotions or launches using urgency triggers (time, money, bonuses).
  1. The “Olive Garden Effect” – Prioritizing Customer Experience and Retention:
  • Nurturing existing customers is highlighted as a high-ROI strategy that leads to repeat business and referrals.
  • Quote: “Treating your customers like they’re the most special part of your business community is crucial to long-term business success. It is so easy to get trapped in a cycle of thinking about how to get new or more clients. But in my experience, nurturing the heck out of your current customers is a strategy that reaps a higher return on investment…”
  • The “Three R’s” of customer focus are: Retention, Referrals, and Revenue (generated from repeat customers and referrals).
  • Providing excellent service and creating a sense of community makes customers happy and motivates them to share their positive experiences.
  1. Financial Literacy and Discipline:
  • The author stresses the importance of understanding business finances from the outset, including tracking expenses, saving for taxes, and building a “business war chest.”
  • Saving consistently, even small amounts, is emphasized.
  • The decision of when to pay oneself (“owner’s draw”) and the importance of reinvesting profits are discussed.
  1. Navigating Criticism and Building a Strong Sense of Self:
  • Receiving feedback and criticism, especially online, is inevitable.
  • Developing a strong sense of self (“deepening roots”) helps entrepreneurs withstand negativity without being derailed.
  • Recognizing that harsh criticism often reflects more on the giver than the receiver is a key takeaway.
  • Taking time for personal interests, setting internal boundaries (regarding self-judgment and comparison), and finding humor are coping mechanisms.

Most Important Ideas/Facts:

  • Entrepreneurship itself does not guarantee happiness; it’s a vehicle for personal growth.
  • Embracing life’s challenges strengthens both the individual and the business.
  • Defining a “why” that focuses on helping others creates a deeper and more connected business.
  • Careful planning and financial preparation are crucial before launching fully.
  • Common mindset obstacles (timing, imposter syndrome, scarcity, beginner struggles, comparison) are normal but must be addressed for growth.
  • Authentic uniqueness (personal and business) is key to standing out in a crowded online space.
  • Thoroughly researching both demand and supply is essential for viable business and product ideas.
  • Building and nurturing an email list is a foundational strategy for audience connection and sales.
  • Adopting a Minimum Viable Product (MVP) approach and conducting beta testing saves time and resources while refining offerings.
  • Prioritizing existing customers and fostering a community-like experience (the “Olive Garden Effect”) drives long-term success through retention and referrals.
  • Financial discipline, including saving for taxes and building a “war chest,” is non-negotiable.
  • Developing a strong sense of self is essential for navigating criticism and maintaining resilience.

In conclusion, Sam Vander Wielen’s book, based on these excerpts, offers a realistic and empowering perspective on online entrepreneurship. It acknowledges the personal and professional challenges inherent in the journey while providing practical strategies for building a sustainable and impactful business grounded in self-awareness, audience connection, and a strong customer focus.

Contact Factoring Specialist, Chris Lehnes

Study Guide: When I Start My Business, I’ll Be Happy

  1. What major life event spurred the author to reflect on the trajectory of her life and career?
  2. How did the author’s boss react initially to her leaving the law firm, and what did she overhear shortly after that impacted her?
  3. What was the author’s first business “misfire” before starting her current legal templates business?
  4. What was the “dreamlike state” the author experienced during an acupuncture appointment that led to her legal templates business idea?
  5. How did the author financially prepare for her exit from her nine-to-five job?
  6. According to the author, why should entrepreneurs aim to define their “why” beyond personal gain?
  7. What is the author’s definition of a “Business War Chest” and why is it important for entrepreneurs?
  8. How does the author define the “entrepreneur virus” and how does she suggest dealing with its symptoms?
  9. What is the “Minimum Viable Product (MVP)” theory in the context of developing a product?
  10. What is the “Olive Garden Effect” and how does the author relate it to business success?

Quiz Answer Key

  1. The author’s near-death experience on a turbulent flight from Amsterdam to Philadelphia caused her to deeply consider her life choices, particularly her dissatisfaction with her legal career.
  2. Her boss initially seemed supportive and congratulated her, but she then overheard him mocking her decision to start a health coaching business, which deeply stung her but also became a catalyst for her.
  3. Before her legal templates business, the author started a health coaching business, which she later shut down after realizing her legal business idea was more viable.
  4. During the acupuncture appointment, the author had a vision of doors flying open, symbolizing the opportunities that would await her if she pursued the legal templates business idea.
  5. She created a detailed financial plan that involved saving for both personal and start-up expenses, and budgeting carefully during the period she worked both her legal job and her business.
  6. Defining their why beyond personal gain helps entrepreneurs create a deeper, more connected business that focuses on the impact they will have on others and the wider community.
  7. A Business War Chest is money set aside from revenue after taxes and expenses, dedicated to reinvesting in future projects and growth within the business.
  8. The “entrepreneur virus” refers to common mindset obstacles like impostor syndrome and scarcity mindset that affect business owners, and the author suggests recognizing them as opportunities for growth and using prescriptions like gratitude and future-proofing.
  9. MVP is the concept of releasing a basic version of a product to the market quickly to test its viability and gather feedback before investing significant time and resources into developing all features.
  10. The “Olive Garden Effect” describes the phenomenon where creating a positive and welcoming customer experience makes customers happy, encourages retention, and naturally leads to word-of-mouth referrals.

Essay Format Questions

  1. Analyze the significance of the turbulent plane ride and the “cheeseburger comment” in the author’s entrepreneurial journey. How did these difficult moments act as catalysts for change and growth?
  2. Discuss the different “mindset obstacles” presented in the text. Choose two that resonate most with you and explain how an entrepreneur can actively work to overcome them based on the author’s suggestions.
  3. Explain the author’s approach to balancing her full-time job with starting her business. What were the key strategies she employed during this transitional period, and what lessons did she learn?
  4. Evaluate the importance of market research (demand and supply) in the author’s process of developing both her initial business idea and her specific products. How did her research inform her decisions and contribute to her success?
  5. Describe the author’s philosophy on providing value to her audience, particularly through email marketing and freebies. How does she strategically use these elements to nurture leads and build a community?

Glossary of Key Terms

  • Impostor Syndrome: The feeling that one’s successes and achievements are due to luck rather than skill or qualification, often leading to a fear of being exposed as a fraud.
  • Scarcity Mindset: A belief that there are limited resources (money, time, opportunities) and that one must conserve and be stingy, even if basic needs are met. Can be a self-fulfilling prophecy in business.
  • Abundance Mindset: The belief that there are more than enough resources available, leading to optimistic, open, and curious decision-making.
  • Future-Proofing: Making decisions and taking steps based on an imagined ideal future state for your business, rather than solely based on its current size and success.
  • Hummingbird (Entrepreneurial Trait): Describes an entrepreneur with lots of ideas and a tendency to move quickly from one thing to another.
  • Jackhammer (Entrepreneurial Trait): Describes an entrepreneur with a focus on sticking with and deeply developing a single idea or project.
  • Business War Chest: Money set aside from business revenue after taxes and expenses for reinvesting in future projects and business growth.
  • Gross Revenue: The total income generated by a business before deducting expenses.
  • Owner’s Draw: Money taken from a business’s profit by the owner for personal use, which is taxable income and not considered a business expense.
  • Minimum Viable Product (MVP): A basic version of a product released to the market quickly to test its viability and gather feedback before full development.
  • Beta Testing: Releasing an initial version of a product to a small group of buyers to gather feedback and assess demand before a wider launch.
  • Content Pillars: Categories or themes an entrepreneur focuses on when creating content for social media to maintain organization, intentionality, and hit different touch points for potential customers.
  • Live Launch: A real-time sale or promotion in a business with a defined start and end date.
  • Evergreen Sales Funnel: A continuous, automated sales process that is always available to potential customers, unlike a limited-time live launch.
  • Welcome Sequence: An automated series of emails sent to a new email subscriber to introduce them to the brand, set expectations, provide value, and share core stories.
  • Content Upgrade: A freebie offered within a specific piece of content (like a blog post) that is highly relevant to the topic of that content, giving readers a reason to opt-in to an email list.
  • Olive Garden Effect: A term used to describe the positive cycle generated by creating a great customer experience, leading to customer retention, positive results, and word-of-mouth referrals.
  • Scope of Practice: The procedures, actions, and processes that a healthcare practitioner is permitted to undertake in keeping with the terms of their professional license. (Used in the text to highlight the importance of staying within one’s qualified area of expertise).
  • Social Proof: Evidence, typically from customers (testimonials, case studies), that shows potential buyers the effectiveness and value of a product or service.
  • Customer Retention: The ability of a business to keep its existing customers over a period of time.

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What Every Small Business Should Know | Chris Lehnes | Factoring Specialist

Questions? Contact Chris Lehnes | 203-664-1535 | clehnes@chrislehnes.com | www.chrislehnes.com

Small Businesses face numerous challenges, among them is the ability to have access to sufficient working capital to meet the ongoing cash obligations of the business.

While this need can be met by a traditional line of credit for businesses which meet all traditional bank lending criteria, many businesses do not meet those standards and require an alternative.

One such option is accounts receivable factoring. With factoring, a B2B or B2G business can quickly convert their accounts receivable into cash.

Many factoring companies focus exclusively on the credit quality of the customer base and ignore the financial condition of the business and the personal financial condition of the owners.

This works well for businesses with traits such as:

Losses

Rapidly Growing

Highly Leveraged

Customer Concentrations

Out-of-favor Industries

Weak Personal Credit

Character Issues

Listen to this podcast to gain a greater understanding of the types of businesses which can benefit from this form of financing.

To learn if you are a fit contact me today:

203-664-1535

clehnes@chrislehnes.com

www.chrislehnes.com

Press Release: Versant Funds $30 Million Facility – Furniture Manufacturer

Versant Funds $30 Million Non-Recourse Factoring Facility to Furniture Manufacturer and Distributor

(May 13, 2025)  Versant Funding LLC is pleased to announce it has funded a $30 Million non-recourse factoring facility to a company that manufactures and distributes furniture to major brick-and-mortar as well as on-line retailers.

The factoring company this business had relied upon for many years to meet their working capital needs had decided not to renew their facility.  At the time, there was a significant balance outstanding that placed the transaction outside the funding capabilities of most factors.  In addition, due to an imminent corporate restructuring, a short-term facility was required.

Versant Funding LLC is pleased to announce it has funded a $30 Million non-recourse factoring facility to a company that manufactures and distributes furniture to major brick-and-mortar as well as on-line retailers.

“Versant’s ability to fund larger transactions than most factoring companies was instrumental in structuring a facility to meet this client’s needs,” according to Chris Lehnes, Business Development Officer for Versant Funding, and originator of this financing opportunity. “Our capital base as well as our flexibility to craft a bespoke factoring solution set us apart from other funding options the company considered.”

About Versant Funding 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


Executive Summary:

This document summarizes the key information from a press release detailing Versant Funding LLC’s provision of a $30 million non-recourse factoring facility to a furniture manufacturer and distributor. The facility was established to replace a non-renewed facility from a previous factor, addressing a significant outstanding balance and the need for a short-term solution due to an upcoming corporate restructuring. The press release highlights Versant Funding’s capacity for larger transactions and their flexible approach to tailoring factoring solutions.

Main Themes and Key Ideas/Facts:

  • Significant Factoring Facility: Versant Funding has provided a substantial $30 million non-recourse factoring facility. This indicates a significant financial commitment and suggests the furniture manufacturer has a substantial volume of accounts receivable.
  • Addressing a Funding Gap: The facility was necessitated by the previous factoring company’s decision not to renew their agreement. This created a funding challenge for the furniture manufacturer.
  • Large Outstanding Balance: A crucial factor in this transaction was a “significant balance outstanding” at the time the previous facility was not renewed. This balance was too large for “most factors” to handle, highlighting the scale of the furniture manufacturer’s funding needs.
  • Need for a Short-Term Solution: The timing of the facility was influenced by an “imminent corporate restructuring,” requiring a short-term financing solution. This suggests the facility serves as a bridge during a period of transition for the furniture manufacturer.
  • Versant Funding’s Competitive Advantages: The press release emphasizes Versant Funding’s ability to handle larger transactions and their flexibility in structuring solutions. As quoted from Chris Lehnes, “Versant’s ability to fund larger transactions than most factoring companies was instrumental in structuring a facility to meet this client’s needs.” He further adds, “Our capital base as well as our flexibility to craft a bespoke factoring solution set us apart from other funding options the company considered.”
  • Non-Recourse Factoring Focus: The press release explicitly states that Versant Funding’s facilities are “custom Non-Recourse Factoring Facilities” designed to “fill a void in the market by focusing exclusively on the credit quality of a company’s accounts receivable.” This means Versant assumes the credit risk of the furniture manufacturer’s customers.
  • Target Market: Versant Funding offers non-recourse factoring to companies with B2B or B2G sales ranging from $100,000 to $30 million per month. The press release reiterates their core focus: “All we care about is the credit quality of the A/R.”
  • Industry of the Client: The client is identified as a company that “manufactures and distributes furniture to major brick-and-mortar as well as on-line retailers.” This provides context for the type of accounts receivable being factored.
  • Key Contact: Chris Lehnes, Business Development Officer for Versant Funding, is identified as the originator of this financing opportunity and the contact person for more information. His contact details (203-664-1535 | chris@chrislehnes.com) are provided.
  • Date of Press Release: The press release is dated May 13, 2025.

Important Quotes:

  • “Versant Funds $30 Million Non-Recourse Factoring Facility to Furniture Manufacturer and Distributor”
  • “At the time, there was a significant balance outstanding that placed the transaction outside the funding capabilities of most factors.”
  • “In addition, due to an imminent corporate restructuring, a short-term facility was required.”
  • “Versant’s ability to fund larger transactions than most factoring companies was instrumental in structuring a facility to meet this client’s needs,” – Chris Lehnes
  • “Our capital base as well as our flexibility to craft a bespoke factoring solution set us apart from other funding options the company considered.” – Chris Lehnes
  • “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.”
  • “All we care about is the credit quality of the A/R.”

Conclusion:

The press release highlights Versant Funding’s successful deployment of a significant factoring facility to a furniture manufacturer facing unique funding challenges. The transaction underscores Versant’s capacity to handle large deals, their flexibility in structuring solutions, and their focus on non-recourse factoring based on the creditworthiness of accounts receivable. This appears to be a strategic move by Versant Funding to address a specific market need for companies with substantial accounts receivable that may require more tailored and larger-scale factoring solutions than typically offered.


Understanding the Versant Funding $30 Million Facility

Quiz

  1. What is the primary service that Versant Funding provided to the furniture manufacturer?
  2. What is the maximum monthly sales volume that Versant Funding considers for its non-recourse factoring solutions?
  3. Why did the furniture manufacturer need a new factoring facility?
  4. What was a key challenge in providing the factoring facility to this specific furniture manufacturer?
  5. Who is identified as the Business Development Officer for Versant Funding and originator of this transaction?
  6. What type of factoring facility did Versant Funding provide?
  7. What kind of customers does the furniture manufacturer and distributor sell to?
  8. What does Versant Funding primarily focus on when considering a factoring solution?
  9. According to Chris Lehnes, what sets Versant Funding apart from other funding options?
  10. What was the required term for the facility due to an upcoming corporate event?

Quiz Answer Key

  1. Versant Funding provided a non-recourse factoring facility. This service involves purchasing the company’s accounts receivable to provide immediate working capital.
  2. Versant Funding offers non-recourse factoring solutions to companies with B2B or B2G sales from $100,000 to $30 Million per month. This range defines the scale of businesses they typically serve.
  3. The furniture manufacturer’s previous factoring company decided not to renew their facility. This created a need for the business to find a new source of working capital.
  4. A significant balance outstanding from the previous facility and the need for a short-term facility due to an imminent corporate restructuring were key challenges. These factors required a large and flexible funding solution.
  5. Chris Lehnes is identified as the Business Development Officer for Versant Funding and the originator of this financing opportunity. He was the point person for structuring and facilitating this deal.
  6. Versant Funding provided a non-recourse factoring facility. This means Versant assumes the credit risk of the accounts receivable they purchase.
  7. The furniture manufacturer and distributor sells to major brick-and-mortar as well as on-line retailers. This indicates their customer base consists of established businesses.
  8. Versant Funding primarily focuses exclusively on the credit quality of a company’s accounts receivable. They assess the likelihood of their clients’ customers paying their invoices.
  9. According to Chris Lehnes, Versant Funding’s ability to fund larger transactions and their flexibility to craft a bespoke factoring solution set them apart. These capabilities allowed them to meet the furniture manufacturer’s specific needs.
  10. Due to an imminent corporate restructuring, a short-term facility was required. This timeframe was dictated by the furniture manufacturer’s internal business plans.

Essay Questions

  1. Analyze the strategic advantages for a furniture manufacturer utilizing a non-recourse factoring facility versus traditional bank financing, based on the information provided.
  2. Discuss how Versant Funding’s focus on the “credit quality of a company’s accounts receivable” specifically addresses the needs of businesses like the furniture manufacturer described.
  3. Evaluate the significance of Versant Funding’s capacity to handle a “$30 Million facility” in the context of meeting the working capital needs of larger companies.
  4. Explain the implications of a “short-term facility” requirement for both the furniture manufacturer and Versant Funding in this transaction.
  5. Compare and contrast the challenges and opportunities presented by working with “major brick-and-mortar as well as on-line retailers” from a factoring perspective, as suggested by the source.

Glossary of Key Terms

  • Factoring Facility: A financial arrangement where a business sells its accounts receivable (invoices) to a third party (a factor) at a discount in exchange for immediate cash.
  • Non-Recourse Factoring: A type of factoring where the factor assumes the credit risk of the factored invoices. If a customer fails to pay an invoice, the factor is responsible for the loss, not the selling business.
  • Accounts Receivable (A/R): Money owed to a company by its customers for goods or services that have been delivered or provided but not yet paid for.
  • Working Capital: The difference between a company’s current assets (like cash and accounts receivable) and its current liabilities (like short-term debts). It represents the funds available for a company’s day-to-day operations.
  • B2B Sales: Business-to-Business sales, where a company sells its products or services to other businesses.
  • B2G Sales: Business-to-Government sales, where a company sells its products or services to government entities.
  • Corporate Restructuring: A significant alteration in a company’s structure, operations, or debt to improve its business or financial situation.
  • Bespoke Factoring Solution: A factoring arrangement that is customized or tailored to the specific needs and circumstances of a particular client.