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- Fraud Corner - Too Much to Sweep under the Rug?
- Introducing CarrierGuard - A Must Have if you
Finance the Transportation Industry
- Latest News in the Factoring Industry
- IT Corner - Protecting your Online Data
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A Factor had the opportunity to take on a longtime rug manufacturer/distributor as a new client. The Client was losing money and under-capitalized, but some well-known retailers were a part of a pretty good account base. For the first 6 months everything ran like clockwork. The Factor knew his business- he expected the deductions and the dilution taken by the retailers, he did verifications, and he maintained the notification process.
The Client had the opportunity to supply a massive amount of rugs to a large retailer. The rugs would be imported from overseas, instead of manufactured at the plant, as was standard operating procedure. The Client had no open terms with the overseas manufacturer and needed financing to make the sale. The Factor did not do purchase order financing, but decided to "pre-fund" the purchase order that would lead to the ultimate invoice. So they funded the P.O. like it was an invoice, the goods came in and were shipped to the retailer and the Factor funded the ultimate invoice and paid off their advance on the P.O. Wow, two discounts on the same transaction! We can do that again!
The Factor began to finance other P.O.'s. The retailer returned the goods from the initial order, because the cardboard cores were too weak. The Factor didn't know. The Client took some of those rugs, shipped them to satisfy a P.O. the Factor had funded on a different account, but didn't let the Factor know it was a P.O. that had already funded, so the Factor funded the invoice without paying off their former P.O. advance.
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The client began submitting P.O.'s they could satisfy with goods on-hand and with imported goods. Most of the time the client got advanced on the full invoice without offsetting the P.O. advances.
Things used to run like clockwork, but time had run out. The client had over $500,000 of unsupported advances. The account debtors were returning the rugs with weak cores. The Factor could not figure out which P.O.'s were still open, which had been shipped and what to do with a Client who was "rotten to the core".
There is a moral to this story. Do what you do best. Get additional outside expertise or bring in a specialty lender if a deal develops new "weaves". If you are making money on the deal, be satisfied to make your money and stay with what you know how to do, otherwise, you are liable to have the rug pulled out from under you.
Credit Support International, the umbrella organization of FactorHelp, has a Collateral Auditing Division with over 20 years of experience in professional collateral auditing.
For any questions, please email Jon Eckhouse at jon@creditsupport.com or call (972) 231-6572.
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CarrierGuard is a Web-Based Compliance Monitoring System which tracks the changes to your registered carrier's Insurance, Authority & Safety Ratings 3 times per week and notifies up to 5 people at your company of any changes via email or fax. This is done automatically so you will never again have to worry about where your carriers stand, whether they are borrowers or debtors.
Because we capture all of the 400,000+ DOT data on our system, CarrierGuard also provides information that you simply can't get anywhere else. This is what we call our Fraud Protection Feature. As you validate carriers initially, by using our system instead of going to the DOT's website, you can not only see the current status, but by using our Fraud Protection Feature, you can also see:
• If there are any similarly named carriers in the system. One of the fraud tricks is to have two companies with almost exactly the same name and then let one run up debt while the other siphons all the cash.
• If there are any other registered carriers at the same address. Again, if you've had trouble with a carrier, it's a safe bet that the people behind it will give you trouble again, but use a different name. You'll know upfront if there are multiple entities.
• If there are any other registered carriers at the same phone number. Sometimes the new or different name will use a PO Box, but the phone number will stay the same.
• If your carrier has multiple DOT #s, meaning that loads you think were hauled directly by your carrier, could have been hauled under broker authority instead. Brokered loads have a different legal status that direct hauls.
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You can use this feature on any carrier, whether they are a presently monitored carrier or not, and you can do so as many times as you want. So if you begin sniffing out a problem, you can have one additional tool to turn to!
CarrierGuard also can be used as a Marketing Tool, with our Company Locator feature. Again, because we get the entire database sent to our system, you can find all carriers registered with the DOT in any geographic location you choose at the click of a button. You can also search for Pending Authority in any particular state. So you can see who is entering the Transportation business.
Finally, for those companies that are interested in the Safety Ratings of their carriers, CarrierGuard also tracks and monitors those changes as well.
CarrierGuard is a yearly subscription based service, and the service costs as little as $2,000 per year for those firms monitoring fewer than 250 carriers. For those firms monitoring thousands of carriers, the cost is just a little over $1 per carrier per year. AND by signing up NOW, you can try the service for one month, and if it doesn't meet with your expectations, cancel it and only pay for the one month.
You can go directly to CarrierGuard.com to sign up or email jon@creditsupport.com to schedule a time to do a 10-15 minute demo. The system is very easy to use & we can show you how it works- live.
CarrierGuard provides the most protection available to those firms with exposure in the Transportation Industry! Period.
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North Syracuse, New York - July 11, 2005 - The Hamilton Group (Delaware), Inc., a commercial finance firm providing alternative finance solutions for America's growing businesses, announces the opening of its West Coast regional office in Los Angeles, and the appointments of Richard Kort and Robert Kort as the area's Regional Vice Presidents.
Richard Kort and Robert Kort bring to Hamilton strong credentials in the alternative finance market and a combined 25 years of experience in the factoring industry. As Regional Vice Presidents, the Korts will be responsible for marketing Hamilton's financial products in California and the western states while facilitating new strategic partnerships.
"Speaking on behalf of my partner, Michael Howe, we are extremely excited to welcome the Kort brothers to our team," says Ken Walsleben, Principal of Hamilton. "The Korts' proven industry experience makes them ideal candidates to further Hamilton's continued momentum. We look forward to their leadership, perspective and motivation. With their expertise, we expect an extremely successful entry into the western U.S. market."
The opening of the West Coast regional office offers Hamilton a greater reach into the California and western region, and marks Hamilton's continued expansion throughout the U.S. The Korts can be reached directly at 805-370-9200.
About The Hamilton Group (Delaware), Inc. - Hamilton specializes in factoring accounts receivable for rapidly growing businesses. By converting accounts receivable into immediate capital, Hamilton helps businesses meet various financial demands. Hamilton has clients throughout the nation, and its factoring program is recognized as having the industry's most flexible terms. Hamilton is headquartered in Syracuse, New York, and has regional offices in Boston, Baltimore, and a new office located in Greensboro, North Carolina.
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Leading US Commercial Finance firm, CIT Group, has announced plans to locate its worldwide Aerospace Leasing & Finance Business in IFSC, Dublin. The company is expected to announce that its new facility will oversee assets of some 1.8 Billion Euros.
The Group already employs over 300 people at CIT House in Blackrock as part of its Specialty Finance division.
Bank of America Business Capital has provided a $25 million revolving loan to Cobalt Finance LLC, a leading direct lender that finances used commercial trucks and trailers nationwide. The asset-based loan will be used to refinance existing debt and provide for ongoing expansion.
According to Cobalt president Jason Rush, "The loan from Bank of America Business Capital provides us with the financial flexibility to continue to grow our portfolio and expand geographically. This capital will allow us to maintain our high level of customer service to the dealerships we work with and the owner-operators we finance."
Cobalt Finance LLC originates commercial finance contracts for commercial trucks and trailers to independent owner-operators and small trucking companies. Cobalt Finance currently operates in 30 states.
Factorhelp offers a complete suite of Investment Banking Services for companies in the Factoring Industry. Call, email, or visit our website today for all of you M&A and/or portfolio brokerage needs!
Thomas G. Siska, Managing Director (847) 498-9136 or tsiska@factorhelp.com
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A few years back, a select group of Factoring organizations wanted to distribute transaction reports (such as collections, reserves, aging reports) via the Web. The usual response for not deploying such a service was "our customers do not need this service." Today, however, things have changed. Your customers are increasingly asking for information online. What's more, they want customized reporting, drill-down reporting, and other valuable information readily available on the Web.
Technology vendors have responded to this demand, and have introduced newer products or services to get organizations online. Today, getting data online is not just for larger, well established Factoring companies. Technology vendors indicate that all you need is a web server, high speed Internet and you are set to go. True- getting online is now much simpler than it used to be.
However, the simplicity of deploying your data on the Internet comes with a risk that is quite often overlooked. This is the risk of online customer data falling into the wrong (unintended) hands. In order to keep your online resources safe, there are certain routine and regular maintenance steps that have to be taken. Such steps involve costs, starting with the labor costs involved in maintaining these online resources.
Companies who are looking at investing into the sharing of data over the Internet or the companies who have already deployed such a service, need to look at the "total cost of ownership" since the cost of just hardware and software is usually a smaller portion of this solution. They need to be aware of the potential risks and solutions available which may help reduce some of those risks.
There are certain "must do" items that a needed to maintain a safe and secure online service.
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a.) Install a Firewall.
b.) Backup data, and have redundancy in case of failures.
c.) Ensure that your Web servers are patched up with the most current software updates and Web server patches.
d.) Ensure that your software vendor helps you with SSL - Secure Socket Layer transmission of data across the internet.
e.) Ensure that all the computers accessing the web servers internally have updated virus packages. Run anti-virus protection on the servers often.
f.) Ensure that you have a strong user id/password protection and dissemination policy.
Quite often companies opt to keep the Web servers in a separate "zone" than their operations systems. This completely isolates the Web server, and also minimizes the risk of intrusion. Some companies elect to host their data on an external service. Such external services specialize in hosting data and programs and as such have monitoring tools to keep their web sites and data intact and well protected.
This article is meant to generate awareness to the security issue and basic steps required to protect your online resources. Organizations need to have an Internet-data maintenance and security procedure outlining list of maintenance items, and backup procedures. There are several resources on the web that will help formulate such a strategy. A good starting point could be the Microsoft's website. They know - it is one of the most popular hacker attack sites!
-Santosh Kalkar
Santosh is the Managing Director of SedTec, LLC. SedTec hosts online reports, and deploys credit score-cards, and online lookup for Commercial lending organizations. Please see below for more information.
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Online Reports - Factoring companies, both small and large, can stand-out from their competition by offering their customers 24x7 access to their account via Online Reports. There is no software, server or firewall required to instantly make this service available. This secure service has over 5 years of proven results with Factors, Banks, and commercial lenders of all sizes and specialties. The service is available for all Factoring software, including Distinctive, Bayside, and Stucky programs, and is offered as a pay-as-you-go service, with no long term contract obligations, starting at as low as $200/month.
Online Debtor Credit Auto Approval - Established Factoring Companies can leverage their historic data to attract new and retain old customers while increasing operational efficiency.
You can offer your customers a way to get automated credit decisions & view historic credit limits without the involvement of Underwriter's time. Online Credit application is offered as low as $75/month for Online Reports subscribers.
New Client Application Processing and Portfolio Alert - Operationally, you can process almost 80% of your credit decisions through an automated Credit Scorecard and Credit Application system. The automated Scorecard and Portfolio Alert system can be installed for as low as $7,500 and integrates with all major Factoring software.
For information on these technology tools, or any of the other products that FactorHelp offers, please email Jon Eckhouse at jon@factorhelp.com or contact him via telephone at (972) 231-6572.
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