Factoring: Working Capital to Survive a Summer of Tariffs

Are supply chain disruptions causing your clients to become hungry for working capital going into the summer months?

Our non-recourse factoring program can quickly advance against Accounts Receivable to provide the funds needed to help absorb the impact of tariffs on all of America’s trading partners.

Factoring Program Overview:

• $100,000 to $30 Million
• No Long-Term Commitments
• Non-recourse
• Manufacturers, Distributors and most Service Businesses are candidates.

We specialize in challenging deals :

• New Businesses
• Fast-Growing
• Leveraged Balance Sheets
• Reporting Losses
• Customer Concentrations
• Weak Personal Credit
• Character Issues

Contact me today to learn if your client can use factoring to survive a summer of tariffs.

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

This document summarizes a brief promotional piece by Chris Lehnes, a factoring specialist, highlighting factoring as a potential solution for businesses struggling with working capital due to supply chain disruptions and the impact of tariffs. The author positions non-recourse factoring as a quick way to access funds by advancing against accounts receivable. The program offered by Lehnes is presented as flexible, with no long-term commitments and an ability to handle “challenging deals,” including businesses with new operations, rapid growth, financial difficulties, and credit issues.

Key Themes and Ideas:

• The Problem: Supply chain disruptions and the impact of tariffs on “America’s trading partners” are creating a need for working capital among businesses.
• The Solution: Factoring, specifically non-recourse factoring, is presented as a method to quickly acquire needed funds.
• Mechanism: The factoring program involves advancing funds against a company’s accounts receivable.
• Target Audience: The program is suitable for Manufacturers, Distributors, and most Service Businesses.
• Flexibility and Accessibility: The program is designed to be flexible, with no long-term commitments, and is particularly focused on helping businesses facing challenges that might make traditional financing difficult.

Most Important Ideas/Facts:

• Factoring as a Response to Tariffs: The core argument is that factoring can help businesses “absorb the impact of tariffs” by providing necessary working capital.
• Non-Recourse Factoring: The program specifically offers non-recourse factoring, which means the factor assumes the risk of non-payment by the client’s customers. This is a significant point for businesses concerned about customer creditworthiness.
• Range of Funding: The program offers funding from “$100,000 to $30 Million,” indicating it can cater to a variety of business sizes.
• Focus on “Challenging Deals”: Lehnes explicitly specializes in and lists several types of “challenging deals” that they are willing to consider. This is a key differentiator and suggests the program is aimed at businesses that may not qualify for conventional loans.
• Quick Access to Funds: The phrasing “quickly advance against Accounts Receivable” implies that accessing funds through this program is a relatively fast process.

Supporting Quotes:

• “Are supply chain disruptions causing your clients to become hungry for working capital going into the summer months?” (Highlights the problem)
• “Our non-recourse factoring program can quickly advance against Accounts Receivable to provide the funds needed to help absorb the impact of tariffs…” (Presents the solution and its mechanism)
• “No Long-Term Commitments” (Emphasizes program flexibility)
• “We specialize in challenging deals:” followed by a list of specific difficulties (Highlights the target demographic and program focus)
• “…use factoring to survive a summer of tariffs.” (Reinforces the program’s purpose in the context of the prevailing economic climate)

Further Considerations:

While the source is brief, it effectively communicates the value proposition of Lehnes’ factoring program for businesses under pressure from tariffs and supply chain issues. It specifically targets companies facing financial or operational challenges, positioning factoring as an alternative funding source when traditional options may be unavailable. The emphasis on “non-recourse” is a crucial selling point for potential clients. The document is primarily promotional and would require further inquiry to understand the specific terms, fees, and application process.

Factoring: Working Capital to Survive a Summer of Tariffs Study Guide

Quiz

1. What specific financial challenge facing clients does this article highlight as a potential reason to consider factoring?
2. What type of factoring program is specifically mentioned in the article?
3. What is the range of funding typically offered by this factoring program?
4. Does this factoring program require long-term commitments?
5. What types of businesses are listed as potential candidates for factoring?
6. What specific types of “challenging deals” does this factoring specialist claim to handle?
7. How can factoring help businesses absorb the impact of tariffs?
8. What is the primary asset advanced against in this factoring program?
9. Who is the contact person mentioned for inquiries about factoring?
10. What is one example of a “challenging deal” related to a company’s financial statements?

Quiz Answer Key

1. The article highlights supply chain disruptions causing clients to be in need of working capital, particularly going into the summer months.
2. The article specifically mentions a non-recourse factoring program.
3. The factoring program typically offers funding ranging from $100,000 to $30 million.
4. No, this factoring program does not require long-term commitments.
5. Manufacturers, Distributors, and most Service Businesses are listed as potential candidates.
6. This specialist claims to handle challenging deals such as new businesses, fast-growing companies, leveraged balance sheets, reporting losses, customer concentrations, weak personal credit, and character issues.
7. Factoring can help businesses absorb the impact of tariffs by providing quick access to funds advanced against Accounts Receivable.
8. The primary asset advanced against in this factoring program is Accounts Receivable.
9. The contact person mentioned for inquiries about factoring is Chris Lehnes.
10. Reporting Losses is one example of a “challenging deal” related to a company’s financial statements.

Essay Questions

1. Analyze how supply chain disruptions can create a need for working capital and explain how factoring can address this need, particularly in the context of increased tariffs.
2. Compare and contrast recourse and non-recourse factoring based on the information provided in the article and discuss the potential advantages of a non-recourse program for businesses facing economic uncertainty.
3. Discuss the types of businesses that are likely to benefit most from factoring, citing examples from the article, and explain why factoring might be a suitable solution for these specific business models.
4. Evaluate the significance of a factoring specialist’s willingness and ability to handle “challenging deals.” How does this broaden the potential pool of businesses that can utilize factoring?
5. Explain the process by which factoring provides working capital to a business, focusing on the role of Accounts Receivable in the transaction and how this differs from traditional forms of financing.

Glossary of Key Terms

• Factoring: A financial transaction where a business sells its accounts receivable (invoices) to a third party (a factor) at a discount. This provides the business with immediate cash.
• Working Capital: The difference between a company’s current assets (like cash and accounts receivable) and its current liabilities (like accounts payable). It’s the capital available to a business for its day-to-day operations.
• Tariffs: Taxes imposed by a government on imported or exported goods. Tariffs can increase the cost of goods and impact supply chains.
• Supply Chain Disruptions: Events that interrupt the normal flow of goods and services from the point of origin to the point of consumption. This can include issues with production, transportation, or sourcing of materials.
• Accounts Receivable: Money owed to a business by its customers for goods or services that have been delivered or rendered but not yet paid for.
• Non-recourse Factoring: A type of factoring where the factor assumes the risk of non-payment by the customer. If the customer fails to pay the invoice, the business that sold the invoice is generally not obligated to repay the factor.
• Recourse Factoring: A type of factoring where the business that sells the invoice is still responsible for payment if the customer fails to pay. The factor has “recourse” back to the selling business.
• Leveraged Balance Sheets: A balance sheet where a company has a significant amount of debt relative to its equity.
• Customer Concentrations: A situation where a large portion of a company’s revenue comes from a small number of customers. This can be a risk if one of those major customers experiences financial difficulties or leaves.