A PUBLICATION OF THE INTERNATIONAL FACTORING ASSOCIATION

FEBRUARY 2019 | VOL 21 | No. 1

COMPETITION AND TECHNOLOGY

ALSO INSIDE:

4 Ways Lenders Can Stand Out from Competitors

Take Your Customer Relationship Management to the Next Level

Current Technical Disruptions in Transportation

TABLE OF CONTENTS FEBRUARY 2019 | VOL 21 | No. 1

AN INTERVIEW WITH: ELLIOT EISENBERG , PH.D. ECONOMIC EXPERT, FOUNDER OF GRAPHS AND LAUGHS, LLC, AND 25TH ANNUAL IFA CONFERENCE SPEAKER

4 WAYS LENDERS CAN STAND OUT FROM COMPETITORS By Raul Velarde

COUNTDOWN TO THE 25TH ANNUAL IFA FACTORING CONFERENCE By Heather Villa

TAKE YOUR CUSTOMER RELATIONSHIP MANAGEMENT TO THE NEXT LEVEL By Kristian Dolan

CURRENT TECHNICAL DISRUPTIONS IN TRANSPORTATION By David Jencks

COLUMNS

LEGAL FACTOR: WHEN THE SH*T HITS THE FAN! By Steven N. Kurtz, Esq.

WHAT’S NEW AT IFA

ADVERTISER INDEX

Cirrius Solutions...... 6 International Factoring Association...... 9, 15, 24, 31 Factor Fox Software, Inc...... 11 Tax Guard...... 17 HubTran...... 2 Utica Leaseco, LLC...... 32

The Commercial Factor | FEBRUARY 2019 3 FROM THE MARKETING DIRECTOR

BY TERRI BAKER

Since its inception, the IFA has grown exponentially and surpassed multiple milestones.

With less than two months to go, we are already exceeding our attendance rate from the conference in Miami at this time last year. In addition, we have over 50 exhibitors so far this year that will provide the products and services that you need all under one roof. Due to the increase in cyber-related crimes and the effects it has already had on Factors, we have added an additional session to the conference that will focus on this issue. In the last few months, several Factors have fallen victim to this scam which involves criminals either hacking or imperson- ating email accounts and directing payments to a different account. This session will include a panel featuring FBI Agent John Caruthers who has over 27 years of experience specializing in cyber crimes, to teach you how to protect yourself from becoming a target. To find out more about all of our sessions this year and our conference highlights, you can read Heather’s article on page 20 or visit the IFA conference website. The IFA has been working hard over the last few months to bring relevant, valuable content to your desks at an affordable price with our webinars. We understand that not everyone can travel to training events, so we want to bring the sessions to you. There have been a variety of pertinent topics including confessions of judgment, the latest developments in Notices of Assignment and UCC-9-406, due diligence and recording factoring transactions to name a few. We have seen a record amount of attendees signing up for the webinars, so if you see a topic that you, sign up early before it sells out! As always, if there is a topic you would like to hear, just let us know. We are excited to announce that IFA membership is at an all-time high! With over 490 companies now members of the IFA, we have seen tremendous growth over the last several years. As our associa- tion continues to grow, we remain focused on the needs of our members and how we can tailor our services to benefit you and your organization. The IFA & AFA continues its efforts regarding the California bill SB 1235 that was signed into law late last year. The Department of Business Oversight (DBO) is in the process of developing regulations requiring companies to disclose the APR in each commercial financing transaction. The IFA / AFA along with Factors and attorneys in California have submitted their comments to the DBO on implementation strategies that will be in line with the unique methods of the factoring industry. As you can see, the IFA has had its hands full over the last year. With less than two months to go before the 2019 conference, we are putting our final touches on the event to ensure it is a memorable one. We hope that you will be able to join us in San Diego!

4 The Commercial Factor | FEBRUARY 2019 NEWS

THE INTERNATIONAL INDUSTRY NEWS FACTORING ASSOCIATION 6627 Bay Laurel Place, Ste C HubTran Automation and Verification Products Show Strong Avila Beach, CA 93424 Growth in 2018; Mobile App on Tap for 2019 MAILING: PO Box 39 HubTran grew 150% year over year and welcomed several new Avila Beach, CA 93424-0039 factor customers including Aladdin Financial, Concept Financial, 805-773-0011 Convoy Capital, Engaged Financial, England Carrier Services, Finan- EXECUTIVE DIRECTOR cial Carrier Services, Flash Funding, Freight Collect, Grand Financial, Bert Goldberg Gulf Coast Business , Integra, Momentum Capital Funding, PUBLISHED BY Phoenix Capital, Porter Billing, Rover180, Steelhead Finance, TAFS, The International Factoring Association Tetra Capital, and Thunder Funding. EXECUTIVE EDITORS HubTran introduced its Verifications product, and continued to Lisa Rafter [email protected] • 610-213-9105 reinvest in core automation platform for factors. They are currently rolling out HubTran’s Mobile App—designed specifically for fac- Chelsea Kirtley tors and fully integrated with our automation platform and Client [email protected] • 484-253-2517 Portal. They also closed series A financing in December, which Amanda Koprowski reinforces HubTran’s balance sheet and strengthens their ability to [email protected] • 484-253-2505 accelerate product development. ADVERTISING SALES Susie Angelucci Sterling to Acquire Woodforest ABL & Equipment [email protected] Finance Businesses 484-459-3016 Sterling Bancorp, through its principal subsidiary, Sterling National ADVISORY BOARD Bank, agreed to acquire the asset-based and equipment finance Eric Belk lending businesses of Woodforest National Bank. Match Factors, Inc., Florence, SC As of December 31, 2018, the balance of commercial and Melissa Donald LDI Growth Partners, LLC, Walnut Creek, CA leases outstanding to be acquired was $504 million, with $339 million in asset-based loans and $165 million in equipment finance Kee Kim Finance One, Inc., Los Angeles, CA loans. The portfolio had a weighted average yield of approximately 5.5%, and consisted 24% of fixed rate loans and 76% floating rate John Martin General Electric Company, Atlanta, GA loans. Fred Moss The acquisition will add significant origination capabilities in the Accord Financial Corp., Montréal, QC, CANADA Midwest and Southwest regions to Sterling’s established national Paul Schuldiner commercial lending platform, including a direct lending equipment Rosenthal & Rosenthal, New York, NY finance sales and originations team. Pro forma for the acquisition, Nel Somarriba Sterling will have a combined $1.1 billion in asset-based loans and New Century Financial, The Woodlands, TX $1.4 billion in equipment finance loans. Kevin Wood The transaction consideration will be paid in cash and will result Chesapeake Bank, Cash Flow Division, Gloucester, VA in an increase of approximately $3 million in annual operating

The International Factoring Association’s (IFA) goal is to expenses. Closing is expected for the first quarter of 2019. assist the factoring community by providing information, training, purchasing power and a resource for factors. The Tetra Capital Was Named One of the Best Trucking Factoring IFA provides a way for commercial factors to get together Companies For the Second Year in a Row by the FactoringClub and discuss a variety of issues and concerns about the industry. Membership is open to all banks and finance Over 100 factoring companies were evaluated for the awards and companies that perform financing through the purchase of winners were selected based on contract terms, customer service invoices or other types of accounts receivable. and leadership. The Commercial Factor is published bi-monthly by the International Factoring Association. To You can access the full list of award recipients at https://factoring- subscribe, please email [email protected]. club.com/best-trucking-factoring-companies/ The Commercial Factor magazine invites the submission of articles and news of to the factoring industry. For more information on submitting articles or advertise- ments, email [email protected], or call 805-773-0011. The views expressed in the Commercial Factor are those of the authors and do not necessarily represent the views of, and should not be attributed to, the International Factoring Association. The Commercial Factor | FEBRUARY 2019 5 previous lender and provide working lock the value of their machinery and NEWS capital for the company. equipment with a $200,000 capital lease, bringing their total funding to Cadence Packaging Group designs, Axiom Bank, N.A. Appoints Two date to over $6,200,000. New Area Managers for Tampa and produces and sells point of sale bags, Orlando Markets boxes and packaging to retailers, Liquid Capital Announces Recent Axiom Bank N.A. hired Jennifer while Garven, LLC designs and creates Fundings as of January 31, 2019 Waddell as Vice President, Area custom gift wrap and packaging acces- • $350,000 factor facility to an Energy Manager in Orlando and promoted sories. Company in Naperville, IL to help Dwayne Haugabrook as Vice expand operations Utica Leaseco, LLC Announces President, Area Manager in Tampa. Completion of Two Transactions • $250,000 factor facility to a In their new roles, Jennifer and Totaling $750,000 During the Last Automotive Accessory Company in Dwayne will oversee day-to-day Week of January 2019 Kirkland, QC to help take advantage of operations and sales at each branch Utica Leaseco completed the funding supplier discounts in their region. Jennifer has nearly of a $550,000 Capital Lease secured • $400,000 factor facility to a Oilfield two decades of banking experience. by Machinery and Equipment to a Services Company in Killdeer, ND to Dwayne has been with Axiom Bank for transportation company located in help meet demand for new contracts a decade. Texas. Utica provided the working capital needed for this important • $150,000 factor facility to a Logistics INDUSTRY TRANSACTIONS American company to continue ex- Company in Brownsville, TX to help panding operations. fund day to day operations North Mill Capital Provides $5,000,000 Accounts Receivable A current Utica customer, operating Commercial Finance Partners Credit Facility to Cadence within the oil & gas sector needed Facilitated 16 SBA Closings Packaging Group and Garven, LLC in funding quickly to purchase new for December Totaling Over Minneapolis, Minnesota equipment and expand their daily $23,000,000 in New Fundings The funds will be used to pay off the operations. Within one week of their A few sample transactions are below: initial request, Utica helped them un- • $4,500,000 SBA 7a for a multi- SaleSforce conSulting

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6 The Commercial Factor | FEBRUARY 2019 location optometrist office seeking to Essendant, a leading national distribu- refinance and retire seller notes tor of workplace items to independent ALL CHAPTERS from previous acquisitions resellers, national resellers, and e- • $2,300,000 SBA 7a for a construc- commerce businesses, announced the tion company seeking to refinance acquisition in September. Sycamore April 3 debt and obtain new equipment Partners is a private equity firm that 4:30pm-5:30pm specializes and focuses on invest- • $5,000,000 SBA 7a for a trucking Chapter Meeting & Reception ments in the retail, consumer, and IFA Annual Conference company seeking to refinance vehicle distribution sectors. debt to lower monthly payments and Manchester Grand Hyatt Construction Finance LLC Provides improve cash flow San Diego, CA $500k Credit Facility to an Excavat- • $1,500,000 SBA 7a for a dentist ing Contractor in Kentucky office seeking to refinance an exist- Construction Finance LLC provided a ing SBA loan and high interest cash CANADA CHAPTER EVENTS $500k credit facility to an excavating advance debt contractor in Kentucky. This contrac- TradeCap Partners Supports tor had been in business for a number March 5 Michigan-Based Government of years, and had a solid financial track OTA Speaker Contractor with $635,000 Contract record, but as they grew, they found Award themselves pinched for money. May 7 TradeCap Partners recently closed a The credit facility has allowed them to PO Funding & ABL— $325,000 production finance facility get caught up with regards to suppli- Financial Products to support a Michigan-based govern- ers, and has given them the capital June 4 ment contractor with a $635,000 needed to complete multi-million dol- Fixed-Price Contract Award. lar projects as quickly as possible. Crossborder Issues—Legal TradeCap expedited due diligence, August closed and funded a production Tradewind Announces $5 MM Credit Facility for Garment Manufacturer finance facility in just 5 days ensuring Summer Gathering— Based in South Korea there were no delays in the supply Golf at Angus Glenn Tradewind Bangladesh provided a $5 chain. TradeCap’s solution encom- million post-shipment finance facility Meetings Location: passed payments to 15+ suppliers and to a garment manufacturer based in Mississauga Living Arts Centre provided further availability to pay South Korea. The company sells to for direct labor associated with the Scotia McLeod Room buyers in the US and Europe and is manufacturing and assembly of goods 4141 Living Arts Drive using the facility to meet its working being delivered under the contract. As Mississauga ON L5B 4B8 capital requirements, accommodate deliveries are completed in stages, the its increasing sales on open account For more information, call factor will advance against resulting terms and expand its business. Oscar Rombolà at (905) 603-6284 receivables to repay TradeCap. or email After being introduced to Tradewind With TradeCap’s facility in place, [email protected]. by one of its clients, the garment working capital constraints have been producer turned to the finance firm to Visit IFA Canada’s website at eased and TradeCap’s funding will help it cope with the changes in inter- www.FactoringAssociationCanada.com. bridge the 120-day manufacturing national payment terms in the export- timeline. TAB Bank Provides Construction import industry. Tradewind advanced Supply Company with Operations in cash to the manufacturer, allowing Wells Fargo Leads $1.3 Billion in California and Minnesota with a $15 Financing for the Acquisition of it to support 30-day open account Million Asset-Based Credit Facility Essendant terms with its customer and bridg- TAB Bank provided a $15 million Wells Fargo Capital Finance an- ing the liquidity gap until it received asset-based revolving credit facility for a nounced that it acted as administra- payment from them. Tradewind of- construction supply company with opera- tive agent, lead arranger, and book fered 100% credit risk protection and tions in California and Minnesota. The new runner for a $1.2 billion asset-based collection services as part of its trade facility is extended through a multi-year credit facility and a $125 million term finance package. agreement and will provide for the com- loan facility in connection with the pany’s ongoing working capital needs. acquisition of Essendant by an affiliate of Sycamore Partners as supported by The company is a vertically inte- Staples Inc., which is also owned by grated manufacturer and distributor affiliates of Sycamore Partners. of steel infrastructure products. These

The Commercial Factor | FEBRUARY 2019 7 products are primarily used in the services to Fire Departments, Search Antonio Salas Joins First Business construction of roads, highways, the & Rescue, Police, E.M.S, Military, Growth Funding interstate system, and airports. Coast Guard, General Industry, Film First Business Growth Funding an- Industry, and others from all across nounced that Antonio Salas was hired British Columbia Outdoor Retailing North America as they have for over as Vice President—Business Develop- Business Positioned for Continued 50 years. ment. Antonio joins First Business Growth with $200,000 Facility from They’ve access to a $200,000 credit Growth Funding with over 10 years in Capital Now Inc. business development. An outdoor retailing business in British facility in order to leverage Capital Columbia recently partnered with Now’s rapid, common sense, business CoreFund Capital, LLC Appoints Capital Now to cover costs associated funding. Bonnie Castillo as New President with continued business growth. They Crestmark Provides More Than On January 9, 2019, freight factoring are now able to focus on providing $25.6 MM in Commercial Financing company, CoreFund Capital, and its to 94 Businesses in the First Half of sister dispatch company, HardCore January Dispatch Services, announced the NORTHEAST CHAPTER Crestmark secured a total of appointment of Bonnie Castillo as EVENTS $11,199,163 in ABL financial solutions president over each entity. for 10 new clients; Crestmark Equip- Formerly the Executive Vice President February 26 ment Finance provided $3,599,632 of CoreFund Capital, Bonnie man- in three new lease transactions; aged the growth of the company New Jersey Proposed New Crestmark Vendor Finance provided from inception over 4 years ago. Her Lending Laws $5,268,716 in 80 new lease transac- 20 years in in the factoring industry, Presented By: Richard Simon, tions; and the Government Guar- which included several key positions, Esq.—Mandelbaum Salsburg anteed Lending Division provided has brought experience and leader- & Robert Hornby, Esq.—Chiesa $5,600,000 in financing for one new ship to the younger subsidiary of GMA Shahinian & Giantomasi PC client in the first half of January. Fund, LLC. Along with freight and Offices of Mandelbaum Salsburg oilfield factoring expertise, she shares Roseland, NJ PERSONNEL her skillfulness in sales, underwriting, February 27 process refinement and commercial Bibby Financial Services Appoints credit. Bonnie’s vision has helped Business Leaders/IFA New Managing Director cultivate and grow HardCore Dispatch Northeast Presentation Bibby Financial Services US (BFS) an- Services, LLC. Yardley, PA nounced that David Ciccolo is its new Managing Director for its US Factoring March 5 Greg L’Herault Joins Hitachi & Asset Based Lending (ABL) business Business Development Team Annual Meeting in Conjunction based in Atlanta. Greg L’Herault joined the business with IFA and NYIC David brings over 30 years of experi- development team of Hitachi Business Arno Ristorante ence in commercial banking, factoring Finance, where he will concentrate his New York, NY and asset-based lending. efforts on attracting new asset-based lending, syndication and factoring For more information, call Prestige Capital Announces the clients across the United States. Harvey Gross at (732) 672-8410 or Promotion of Rachel Hersh to the Greg will be based in Denver, CO and [email protected] or visit Position of Sales Director, North be responsible for scaling the compa- www.ifanortheast.org. America ny’s growth plans by connecting with Rachel Hersh was recently promoted business owners and trusted advisors. to Sales Director, North America at MIDWEST CHAPTER Prestige Capital Corp. Rachel has more North Mill Capital Promotes Karen EVENTS than 20 years of experience in the Marino to Vice President factoring industry and will be respon- Karen Marino of North Mill Capital was Events TBA sible for continuing to grow Prestige promoted to Vice President. Karen For information on upcoming Capital’s footprint in North America. has been with North Mill Capital since events, contact: December of 2015 when she started in Robert Meyers her role as Account Executive. Karen IFA Midwest Chapter President has been working in the Commercial Republic Business Credit, LLC Finance industry for 13 years. • [email protected]

8 The Commercial Factor | FEBRUARY 2019 UPCOMING EVENTS INTERNATIONAL FACTORING ASSOCIATION 2/14 Take Notice of Your

THE Notice of Assignment 2019 WORLD’S Webinar - 1pm - 2pm PST LARGEST 3/5 Annual Meeting w/ NYIC & IFA Northeast Chapter ASSOCIATION Arno Ristorante, New York, NY FOR THE 4/3 Factoring Essentials Training Class FACTORING Manchester Grand Hyatt, INDUSTRY San Diego, CA 4/3-6 Annual Factoring ANNUAL CONFERENCE Conference AMICUS BRIEF PROGRAM Manchester Grand Hyatt, San Diego, CA AE CERTIFICATION PROGRAM 800-563-1895 DISCUSSION GROUPS 5/15 Chasing Account Debtors 805-773-0011 LEAD GENERATION All Over the Country www.factoring.org www.factorsearch.org Webinar - 1pm - 2pm PDT [email protected] DISCOUNTED PRODUCTS FACTORING SURVEY 6/17-18 The Law & Business of Factoring & LEGAL FORMS Training Class TRAINING COURSES Planet Hollywood, Las Vegas, NV MENTOR PROGRAM 6/20-21 AE-LO Training Class SOCIAL MEDIA COMMUNITY Planet Hollywood, Las Vegas, NV MEETINGS, FORUMS 9/4-6 Transportation Factoring Meeting & MORE The Driskill, Austin, TX

The IFA offers CLE for upcoming programs. For information on approved programs and states, please contact Heather Villa at The International Factoring Association is registered with the National Association of State [email protected] or 805-773-0011 ext. 301. Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the These training courses have been approved for CAEF credits. acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be For information on approved programs and courses, please submitted to the National Registry of CPE Sponsors through its website, www.learningmarket.org. contact Terri Baker at 805-773-0011, ext 303. INSIGHTS FEBRUARY 2019

An Interview With: Elliot Eisenberg , Ph.D. Economic Expert, Founder of Graphs and Laughs, LLC, and 25th Annual IFA Conference Speaker

WHAT DO WHAT DO YOU THINK ABOUT FACTORS NEED THE PROPOSED LEGISLATION (IN TO KNOW ABOUT CALIFORNIA AND NEW JERSEY) AND THE THE ECONOMY POTENTIAL FOR UNINTENDED CONSE- TO PREPARE FOR QUENCES OF INCREASED REGULATION THE FUTURE? TO ADVERSELY AFFECT FACTORS? One day there’s gonna They’re very different. This is not payday lending be a recession and when here and it’s important that the American Factoring there’s a recession, Association makes this pretty clear. We’re providing a accounts receivable valuable service (factoring)—not that payday lenders build up. Companies aren’t providing a valuable service, but it’s a very don’t want to pay; they different service. They shouldn’t be lumped in. This is a pay slower. Let’s extend very different thing. Firms need this money. They can’t it from 30 to 60 (days) or 60 to 90 or whatever it is; so wait 60 days or 90 days. They’ve got to get it today. If there becomes a need. More companies will want this they’re willing to pay a percent or two to get that money, service. I’m not predicting a recession in the near future, hey, that’s great! Everyone’s a winner here. These are but this is something they should be thinking about, established companies that are going to the Factors, too. certainly, because it’s going to come at some point and These are companies that make good revenue but they one of the early things firms do is they wait longer to pay. just need the money faster.

10 The Commercial Factor | FEBRUARY 2019 DO YOU ANTICIPATE new normal. It was a nice period, but ANY OTHER THREATS TO it’s not the new normal. FACTORS, LIKE FINTECH? Get ready for a WHAT ARE SOME At some level, like everybody else, slower growth you’re a victim of the economy. ECONOMIC ISSUES THAT We’re all victims of things beyond economy. Don’t KEEP YOU UP AT NIGHT? our control. The economy is good. Emerging markets are one of them. If the economy goes into the think that what we We know that Argentina’s in a world ground, suddenly things change experienced in 2018 of hurt. Turkey’s hurting. Their and your business model has to growth is slowing. Argentina’s in adjust. Fintech is certainly part of is the new normal. recession. South Africa’s in reces- the horizon that’s out there but sion. Pakistan is now asking the IMF, the economics of it—I’m somewhat just as Argentina did, for a bail out. skeptical they’re massively going They can’t pay their bills. to change. There may be a little finance and spending increases in So, it’s possible that this emerging more competition in the game February of 2018; both have really market problem, if Indonesia and with Fintech but you’re basically supercharged our economy and the Philippines and Malaysia and lending money. Someone is lending that stimulus will go away and GDP so on become adversely affected someone money and the cost of growth will slow. There’s also other by this, this could really slow down money is the cost of money. A lot things. There’s trade issues. There’s global growth. There are enough of Fintech has hoped to do better monetary policy that’s gonna slow people in these countries—they’re by offering students lower rates down. So, get prepared for a slower small economically, but larger on their student loans. This hasn’t growth economy. Don’t think that population-wise—they could have a been a massive success. There have what we experienced in 2018 is the meaningful impact and the central been some successes but not nearly what they thought. This notion that Fintech was going to upset banks; this hasn’t quite happened either. All this euphoria about it hasn’t really turned out so far. So, it’s not that I’m not concerned about it going forward. It’s possible that something dramatic and disruptive will occur but it hasn’t happened yet.

ARE THERE ANY MYTHS OR MISCONCEPTIONS ABOUT THE ECONOMY THAT YOU’D LIKE TO DISPEL? I think people should be ready for the economy to slow down. The economy is absolutely terrific now. GDP growth in Q2 which is already a quarter behind us—we just finished Q3—was really, really spectacularly good and Q3 will be very good, lower, but very good and it will slow over the next 15 months. There’s a cycle to things but there’s also some policy decisions that have made the growth particularly strong—tax cuts in December 2017 and deficit

The Commercial Factor | FEBRUARY 2019 11 INSIGHTS FEBRUARY 2019

bank here in the states has to be There are lots of things that are WHAT STEPS SHOULD cognizant, and is cognizant, that slowing down growth, not to FACTORS TAKE TO if these countries suffer enough mention rising interest rates—and PREPARE FOR THE negative stuff, it could rebound and the Fed may raise rates too quickly, FUTURE? negatively affect us. That’s what too fast or too high. That could drive They should get their in they’re thinking of. I don’t think us into recession, too, so there’s lots shape, have in the back of their they’ll change their of recessionary fears out there. minds that come two years from hiking process but they might delay Europe—we shouldn’t discount now, a year and a half from now—it it; they might halt it for awhile to see Europe. Britain might fall out of could be as early as then that we how the emerging markets are doing Europe, the EU, in a bad way, a hard have a recession for some reason. but that’s a concern. Brexit. Italy’s now causing problems Do things prudently. Don’t bet the Another concern is corporate debt. for the EU, so the EU remains a work farm. I wouldn’t go on an explosive Corporate debt is getting high. It’s in progress with problems. expansion boom a year from now. been very inexpensive to borrow The emerging markets; Europe; That might be a bit late in the game money for a very long time because fiscal policy becomes contrac- to do that. The risk that it entails of financial repression in the form tionary; monetary policy rates are might be large. of super low interest rates by the rising; trade; tariffs are inflationary central bank, and firms feasted on and growth-sapping. That’s a lot and ARE THERE ADDITIONAL debt and now debt costs are gonna last, but not least, let’s not discount CONSIDERATIONS FOR rise. This is going to, at minimum, complacency. NICHE FACTORING reduce earnings. At worst, it could COMPANIES? do a lot worse than that. And Banks are made at the best of times. The ones that are interest rate- corporate debt quality has gone Times are good and people who are sensitive are the ones that are going down. It used to be much higher but now, let’s say 30, have never expe- to be adversely affected first. So, a lot of low-quality paper is being rienced a recession. They may have you look at automobiles. They’re put out there so this is another area heard about the last recession; they going to be adversely affected. And of concern. may have seen some effects. It may not have affected them personally. housing-related stuff because that’s Trade and tariffs are an area of It may have affected their parents. how monetary policy is transmitted concern, as well. They will certainly But if they’re working for a bank, through the economy; it’s through slow down growth and boost infla- for example, and they’re making housing and autos on the residential tion, which is very negative. Trade loans or working for a loan company, side; on the commercial side, it’s will not drive us into a recession their loans have been good because commercial construction. So, those single-handedly; it won’t. It’s not the economy’s been in a slowly projects will become less frequent. big enough but it can add on to the improving situation for the last 8 or There will be less of them and some other things that are going on and 9 years. But that’s gonna change. of them might not make it all of the that will slow down growth. Complacency itself creates the way through. Some of the firms We’re running out of workers. opportunity for something bad might not make it through the reces- Firms are running out of workers. economically in the future. sion, so keep up on the quality of who you’re working with. Unemployment is remarkably low Risk becomes mis-priced. Interest and population growth—our labor rates are too low because the risk force growth—is very low. If you is not priced properly. That leads WHAT DO YOU THINK THE want to expand your business, to a credit explosion, a big boom in FUTURE OF FACTORING it’s very hard to do if you can’t credit, and that’s a problem. WILL LOOK LIKE? find people to do whatever it is I wonder if factoring will become that’s being done, making widgets a more appealing solution for big or selling mortgages or building companies. As technology improves, bicycles or whatever it is. This the ability to sell accounts receivable gets harder so this will slow down becomes easier. Thirty years ago, it growth. was much more difficult to physically

12 The Commercial Factor | FEBRUARY 2019 move the obligations or or you can find other funds some- liabilities or assets, depending on where. Will your funds go up as fast which side of the balance sheet “When is the as your competitors’ funds? Will you’re thinking of. I wonder if, on the their cost of funds go up faster than flip side, that might make competi- next recession?” yours? There will be some winners tion a little more heavy in the space, and losers inevitably as interest rates the Fintech guys, for example. The rise, so that’s an important thing to profit margins; increased competi- is always the keep in mind, too. tion is going to reduce margin. I would be fearful that I’m going to be question. I don’t WHAT CAN ATTENDEES making less of a return. Some busi- OF THE 25TH ANNUAL nesses may decide it’s not profitable think it will occur FACTORING CONFERENCE enough to stay in this space. EXPECT TO TAKE AWAY prior to 2020 FROM YOUR TALK IN WHAT ROLE WILL BLOCK- APRIL? CHAIN PLAY IN THE but after that, I’ll reassess and, at that point, I’ll give ECONOMY? them my best guess when a reces- Blockchain—as distinguished from anything’s open. sion might occur. We’ll talk about the currency—the technology is what might be the drivers of that unequivocally great. The Bitcoin recession, what could be the causes itself is just some stupid thing. I’m of it, and we’ll look at the general not quite sure what there is there, macroeconomy and try to piece it the economy, that’s what causes a but the technology is just stupen- together. We’ll look at the whole recession. dous. It’s spectacular and it will economy, try to make some over- lower transaction costs and it will WHAT MISCONCEP- arching comments about stability, lead to less intermediation, so you’re TIONS DO PEOPLE HAVE health, ill health, whatever, of the going to need fewer people involved ABOUT PREPARING FOR A economy, but they’ll get a good in the process. Blockchain is cool RECESSION? grounding of what’s going on in the and real. Think of it like automobiles macroeconomy. People think it’s somewhat mechan- or airplanes. Automobiles may not People are so busy in their own jobs, ical. Okay, we’re nine and a half years be a very profitable business. Auto they don’t have time to look at the in; we’re gonna have a recession companies, by and large, don’t big picture. My job is to help them next year or something. People say make a lot of money. Airlines, by and understand the big picture. How that all the time. There’s no reason large, have not made a lot of money many more interest rate hikes will for that to occur. I mean, we’ll have historically but it’s transformative there be at that point? By then, it’ll a recession, of course—you’re gonna technology. be close to two and three-quarter die one day, too—but thinking about percent by then on the Fed funds that at the inappropriate time is not WHAT IS YOUR MOST rate. How many more hikes are we productive. So, don’t keep plan- FREQUENTLY ASKED gonna get at that point? Will there ning for it all the time. Be aware it’s QUESTION? be one more or two more or three going to happen at some point. Be “When is the next recession?” is more hikes that year? That’s an ready. Know that at least for now, always the question. I don’t think important thing to keep in mind. it’s at least a year away. That’s good it will occur prior to 2020 but And they’ll have fun! • enough. after that, anything’s open. But this notion that it’s a cycle—we’re WHAT ELSE SHOULD due—that’s simplistic and stupid. It’s FACTORS FOCUS ON RIGHT the equivalent of saying I’ve been NOW? working 20 years and I’m gonna stop working for a year. That’s not I think the cost of money is going possible. People don’t voluntarily to go up. Interest rates are rising stop working. You have bills to so funding costs are going to go pay. If something bad happens to up, too. Maybe you can find some cheaper funds somewhere. Maybe

The Commercial Factor | FEBRUARY 2019 13 LEGAL FACTOR by Steven N. Kurtz, Esq. FEBRUARY 2019 When The Sh*t Hits The Fan!

Inspiration and ideas for this column come from a wide variety of sources. After a little case of writer’s block coupled with a crazy post-holiday schedule, the impetus for this article came from a social media post I ran across about an old-school punk rock band, with a song matching this article’s title. Unfortunately, the reality of the factoring and ABL business is that deals will go into , some more serious than others. This article will hopefully be of assistance if and when you are faced with this problem.

The first issue when dealing levels, but this “measurement” is assigning accounts, stopped all with a default is to recognize the often fluid and is subjective. The financial reporting, or has refused problem. It is easy for a problem first, and least serious level, is when to report bad news. Finally, there is to fly under-the-radar. Common something happens to the factor the third level of a default, involving examples of an under-the-radar client/borrower which is beyond intentional wrongful conduct, such problem are a covenant default, its control. Examples are bad luck, as misdirecting payments, submis- a small over-advance because market changes, difficult customers, sion of false or exaggerated invoices of an unexpected chargeback, or other snafus. These kinds of for funding, and other acts of fraud. or late financial reporting. Small examples, can fall into the not-so- The reason why categorizing the unchecked problems, often lead to serious category, and typically do level or type of default you are facing something bigger. Many defaults not involve character issues on your is necessary, is because it clues you come completely out of nowhere, factor client/borrower’s part. While in to the action required to correct such as the client whose request for these “first level defaults” all result the problem. Some defaults you an over-advance, or line increase, in contract breaches, these don’t can work out, get back on track, which was turned down six months rise to the level of an intentional and become profitable. Other deals ago, morphs into the dreaded letter breach, rather it’s just bad luck or have no chance of success. Finally, from the merchant cash advance unfortunate circumstances. The there will be deals where you are lender, who is dealing with its own second and more serious level of forced to take a hard and aggressive default, which invariably happens a default is when the factor client/ position due to the character issues when someone not credit worthy borrower actively breaches your on the factor client/borrower side. takes out multiple merchant cash agreement. A common example of Once you identify the nature of the advance loans at 80% plus yields. this second level of breach is the default, there will be several things Then, of course, there’s the dreaded client who takes out merchant cash that you should be doing simultane- big chargeback out of nowhere, a advance loans without your knowl- ously, which is to take stock of the case of bad luck, or fraud. But, the edge or consent. Other examples of situation and make sure that your common denominator in a default a second level breach are the factor agreements and collateral are in situation, is that there is often some- client/borrower who has stopped thing that triggered, or should have, triggered you to action. Sometimes, a problem can be addressed by communication, whether it’s with Steven N. Kurtz, Esq. has represented factors, banks, and your partner, team leader, portfolio asset-based lenders on a continuous basis since 1987, and he is manager, lawyer, etc. Collaboration the Co-general Counsel to the IFA. A founding partner of Levinson and discussion with your team Arshonsky & Kurtz, with offices in California and Oklahoma, he members are good things. practices in the areas of commercial law, , workouts, Once you know that there is a loan documentation and trade finance, in both transactions and default, it’s important to put the litigation matters. He can be reached by phone at 818-382-3434 or by email at nature of the default into a category. [email protected]. I tend to classify defaults into three

14 The Commercial Factor | FEBRUARY 2019 place. Your documents need to be client repay you in full? Partially? Is as a going concern? There are a assessed. You need to make sure this a deal for a new factor/lender? number of business considerations that your legal file is in order. This What is your collateral worth if to take into account. If the factor means, all contracts are executed, liquidated? Will the account debtors client/borrower is being coopera- you have the appropriate resolu- come up with reasons for non- tive, now is the time to get as much tions authorizing the transaction payment if the business stops? Does information as you can, as fast as from the factor client/borrower, any the business have a realistic chance you can. Depending on the size of amendments are in place, and your of making it if you funded on limited the deal, and if there’s a chance it liens assessed. Hopefully, there conditions? What is the situation will continue, it is usually beneficial is some form of a due diligence with the guarantors? Are there to put in a field examiner, or perhaps or underwriting file, or at least competitors, or someone out there the factor client/borrower hire a a truthful questionnaire, which who could possibly buy the business reputable insolvency consultant. states the factor client’s/borrower’s situation. You will need to run lien searches to make sure that your collateral is perfected, and assess think you know your stuff? any junior liens, or determine if there are any federal or state tax liens. For collateral that is perfected Prove it! by a financing statement, that will mean you run a search in the state in Certified ACCount exeCutive in fACtoring which your factor client/borrower is organized in, using the name exactly You are eligible to sit for the Certified Account as it registered in your factor client/ executive in Factoring exam if you have been borrower’s state of organization. involved in Factoring for at least two years and If your lien is reflected in a proper you are or have been in an search, then your financing state- ment is fine. If it is not reflected, Account Executive role, or you then you need to take corrective have managed such a action. For collateral not perfected position. by a financing statement (which would typically be registered tHe ProCeSS iS eASY... copyrights, deposit accounts, motor vehicles that are not inventory for Any qualified candidate can sign-up, there is no need sale, air craft, vessels), if you have for employer sponsorship. Qualified candidates can that collateral, you should perfect schedule the exam at a supervised testing center the lien. The initial self assessment in a nearby city and will take a 100 item, multiple is important, because it ensures choice exam. that everything is in order and lets you know what needs to be fixed. ProudLY diSPLAY tHe CAeF deSignAtion Sometimes, a different strategy is Do taken when the documents or collat- The exam was not designed to you eral perfection are not in order. be easy; many candidates or your While you are assessing the state report that taking the exam employees of your documents and perfection, took every bit of the two you will also be thinking about possess the next steps. Will this be a workout, hours allotted and not everyone who takes the knowledge litigation, collateral liquidation, exam will achieve this prestigious credential. base to become , or something else? Certified? The answer to this question often Candidates who pass the exam can proudly display depends on the level of breach, their CAEF designation by using the Join The Growing but is also a function of the amount CAEF logo and C.A.E.F. initials to Ranks of CAEF’s in default and what it will take to show the world they are proficient become compliant again. If you have and Sign-up Today! in the field of Factoring. not already done so, you need to visit www.factoring.org for more figure out your exit strategy. Can the information or call 805-773-0011

The Commercial Factor | FEBRUARY 2019 15 LEGAL FACTOR FEBRUARY 2019

If you are to continue your financing borrower is in a fish bowl, you have there are likely objections to the relationship with the factor client/ full and complete reporting, obtain individual’s debt being discharged, borrower, at least for the time being, court approval of your agreements, or even objections to the entire you should document the going obtain certain court protections, and discharge in bankruptcy. A good forward status in a forbearance improve your chances of being paid. lawyer who understands the inter- agreement. A good forbearance If the bankruptcy is not friendly, play of bankruptcy and commercial agreement helps both sides because or you are not consulted before finance must be consulted. it makes it clear what is expected, filing, you will need to address the If the defaulting factor client/ and the consequences if expecta- automatic stay. The automatic stay borrower is not in bankruptcy, but tions are not met. The forbearance essentially prevents the creditor the situation is adversarial, then liti- agreement should acknowledge the from taking various steps to collect gation counsel should be consulted. default, contain language that the the debt, perfect liens, or do other However, there are number of items agreements are fully enforceable things which involve taking collec- in your contracts that may provide according to their terms, that the tion steps against the bankruptcy self help remedies.These include, collateral is perfected (even if not, debtor, or property of the bank- but are not limited to, redirecting because if not, it’s certainly being ruptcy debtor’s estate. This is an the mail to ensure that all checks are fixed), contain one way releases important issue because in factoring, received by you, initiating reverse in your favor, and set forth the all transactions are set up as sales ACH or wire transfers (this is a first terms of repayment, or how the of accounts. If the bankruptcy court thing one should do if the factor defaults will be cured. The forbear- determines that a factoring transac- client/borrower has intercepted ance agreement is often the time tion is a true sale, then the accounts payments), and sending out hard to work in certain waivers that can which were purchased are not collection notices to the account only be obtained after a default, property of the bankruptcy estate, debtors. Surprisingly, many of the such as waiver of UCC foreclosure and the automatic stay does not account debtors who have paid over sale notices or the right to redeem apply to collection of the purchased notice freely admit this fact after collateral in a foreclosure sale. If accounts. The issue which most being contacted by a hard notice. there will be continued financing courts look for in this situation, during the forbearance period, then is whether the factor assumed While nobody ever wants to be in that should be addressed and the the economic risk of the account a default situation, it is a fact of life financing documents will likely need debtor’s financial inability to pay, i.e., in this industry. Once the problem some modification. a non-recourse agreement. If the is over, or after things have calmed accounts are property of the estate, down a bit, it’s important to play Many default situations will wind Monday morning quarterback. This up in bankruptcy. Although bank- or if there is inventory involved that is subject to the factor’s/lender’s is where you assess what went ruptcy issues can be the subject wrong, how it went wrong, how of a detailed program or article, lien, then the Chapter 11 debtor will need to seek use of cash collateral it got past you, what could have here’s a few things to consider. If been done differently, or what the debtor is going to continue in from the bankruptcy court. This can be quite technical and will require corrective measures can be put in business, it will file a Chapter 11 place. Hopefully, this will not be you reorganization. If it is a liquidation, that the Chapter 11 debtor provide adequate protection to the factor/ going through this exercise. But, then it will be a Chapter 7 filing. unfortunately, defaults invariably Sometimes, a sole proprietorship in lender. But no factor ever wants the Chapter 11 debtor to be allowed happen. Also, as one prominent a small deal, usually in transporta- well-respected industry veteran has tion, may file a Chapter 13 which is to collect the accounts purchased under the factoring agreement. said, you’re not a real factor until you a consumer reorganization. If you have been burned. But, let’s hope are in Chapter 11, and it’s friendly, This usually never turns out good. If the debtor in the bankruptcy that all of our transactions are happy then this would be the opportunity deals!! • to consider debtor-in-possession has committed fraud, there are a financing. Debtor-in-possession, number of bankruptcy remedies or DIP financing, will require court that the factor/lender will need to approval, but if done right, can be review. If the debtor is an individual a way in which your factor client/ who has committed fraud, then

16 The Commercial Factor | FEBRUARY 2019

COMPETITION AND TECHNOLOGY FEBRUARY 2019

4 Ways Lenders Can Stand Out from Competitors Competition for factors and asset-based lenders was heated last year and is predicted to further intensify in 2019. Many elements are contributing to this, including an increase in online lending, fundamental shifts changing and shrinking the retail and other important industries, new technologies impacting the transportation industry, a potential slowdown predicted in the economy, and more. At the same time, business owners have come to expect quick response and convenience and are more likely to shop around for funding. At any given time, there may be 3 to 5 lenders looking at the same deal.

BY RAUL VELARDE

WHAT CAN LENDERS DO TO SET THEMSELVES APART FROM COMPETITORS?

1 Go Digital. Offer all-digital onboarding for customers. Sound impersonal? Too extreme? This doesn’t mean there’s no human touch but the days when business owners have to fill out an online form for you to contact them or download and send a fillable PDF form just to get the application process started are becoming obsolete. Borrowers have many options for funding and implementing a smart all-digital application and onboarding system allows prospects to easily apply directly from your website or from a link you send to them, allowing them to conveniently interact with you and securely gather

18 The Commercial Factor | FEBRUARY 2019 the information you need while downturn cycle, competition will 4 Boost Analytics Tools. To keeping the deal moving. Prospects further intensify. So even though get ahead of competitors, apply are more likely to choose your the demand for financing shrank by analytics tools to offer higher company because they can more 5%, online lending went up by 24%. advance rates to better compete easily request credit facilities and Further, 40% of businesses applied and win clients. Traditionally, receiv- you can capture business owners to online lenders—nearly the same ables finance companies advance at times when it’s convenient for share that applied to large banks about 80-85% even though they them, when your sales or under- (49%) and small banks (47%). Also, could advance more, depending writing department isn’t available, at the last IFA Conference, over 60 on the client’s receivables struc- on evenings, weekends or anytime. factoring companies we surveyed ture and collections history. To In this digital age, commercial reported that their biggest chal- put you in a more advantageous borrowers have come to expect an lenge is the Speed of Closing Deals position, consider implementing easy and convenient experience and and a further survey of asset-based better analytics tools to allow you the ability to simplify the process lenders in November reported that to effectively analyze and predict by automating it will set you apart. Competition is their biggest pain dilution and ineligibles and be more Further, consider implementing point. To stand out from online competitive on advance rates. Some all-digital onboarding, which allows competitors and respond more areas of the industry such as freight the borrower to upload any required quickly to borrowers, lenders can factoring are already doing this on documents, connect directly to take advantage of underwriting an invoice basis, but this can also be their accounting systems and bank technology to help them close done in other sectors by using better transactions to extract and analyze deals more quickly. Underwriting analytics. information, and get a quick or technology now offers platforms immediate decision. An all-digital that automatically access 3rd party onboarding process makes you data providers (Experian, Ansonia, There’s no crystal ball to predict stand out from competitors by Dun & Bradstreet, etc.) for imme- what 2019 will bring, but traditional elevating the borrower experience diate results on applicants, provide lenders have many tools at their so you can seamlessly gather all the analysis of financials, alert your disposal to help them win more information you need to come up team when information is missing or customers by adopting technology with the best solution to meet their incomplete, file UCC’s and stream- to set themselves apart in an cash flow needs and capture new line the entire process. Underwriters increasingly competitive landscape. • clients more easily. can get an overall picture of a borrower in minutes freeing up their time on busy work to allow them 2 Reduce the Wait. In the quality time to assess risk and come Federal Reserve’s most recent Small to a faster decision. Raul Velarde is Business Credit Survey, business the founder and owners were most dissatisfied with managing director wait times for credit decisions from 3 Offer e-Signature. Implement of Decipher Credit banks and other traditional lenders. e-signature into your agreements Solutions, Inc., The dissatisfaction with wait times and contracts to facilitate faster a technology has created an opportunity for closing. Lenders can adopt many company that offers onboarding, underwriting and compliance online lending, with the survey e-signature systems now available software for the factoring and showing a 24% increase in online or look for a technology partner that asset-based lending industries. He lending across all lending categories incorporates it. Electronic signa- has held executive positions with in 2017 over the prior year and tures are legally binding and offer Claro Finance and Bibby Financial each year it has been growing. timestamp and identity information. Services, among others. He has This increase is more prominent Further, they let lenders stream- taken his knowledge in the lending among non-bank lenders. At the line account openings, document industry and applied an insider’s point of view to help traditional same time, the demand for overall routing and approvals, and increase lenders innovate, better compete, financing in 2017 shrunk by 5% over transparency and efficiency. and thrive. He can be reached 2016. This has not only created Electronic signatures also prevent by phone at (301) 710-5447 or more competition, but if online the hassles of getting documents by email at raul@deciphercredit. lenders continue on a growth path signed, while giving lenders time to com. For more information, please as the Fed increases interest rates focus on relationship building and visit http://go.deciphercredit.com/ and if the U.S. economy enters a closing deals more quickly. technologyforlenders.

The Commercial Factor | FEBRUARY 2019 19 2019 ANNUAL IFA FACTORING CONFERENCE FEBRUARY 2019

Countdown to the 25th Annual IFA Factoring Conference From startups to some of the largest commercial finance companies in the world, the IFA Annual Factoring Conference has more representation of the commercial finance industry than any other event. Attendance numbers are surpassing previous years, which is building the excitement for the 25th annual event. Industry professionals from all over the world will come together on April 3rd -6th to discuss the latest issues, trends, and developments critical to commercial finance.

BY HEATHER VILLA

20 The Commercial Factor | FEBRUARY 2019 STATISTICS: following graph (Figure 2). More today is because of peer-to-peer than half of all attendees are top networking and taking advantage The first IFA Annual Conference executives or managers within each of the resources to meet these indi- was in 1995 with 35 attendees. company. viduals at events like the IFA Annual The following chart shows the Conference. substantial growth that the IFA’s This proves the importance of conference has had and how it has networking events at the confer- transformed into an event with over ence. These invaluable opportunities ABOUT THE CONFERENCE: 850 attendees. The IFA has devel- provide access to some of the Commercial finance companies in oped an impressive industry-driven highest caliber of industry experts 2019 face countless challenges. event that has helped thousands of in the commercial finance industry. From advancements in technology, companies over the past 25 years Sharing experiences and achieve- potential regulations and pres- succeed in Commercial Financing. ments, as well as setbacks, allows sure from Fintech companies, (Figure 1) industry peers to learn and grow modernization is evident in order together. One of the main reasons to withstand the changes ahead. Job classifications of conference why the commercial finance Staying abreast with these topics attendees are divided within the industry has grown to what it is will allow your company to thrive in uncertain times and get ahead of the competition. Companies in (Figure 1) all factoring sectors of the industry, from transportation to staffing to construction, will search for ways to drive profitable growth while staying within their risk limits. The 2019 Annual Factoring Conference will provide an abundance of dynamic, thought-provoking sessions that will allow you to achieve this goal.

SPEAKING SESSIONS: • UNthink (Erik Wahl, The Art of Vision) • Recognizing the Technologies and Trends Transforming Factoring (Simon Anderson, (Figure 2) Venture Foresight) • Searching in the Dark Web: Finding Fraud Online (Cynthia Hetherington, Hetherington Group) • The Current Economic and Financial Outlook (Elliot Eisenberg, Ph.D., GraphsandLaughs, LLC) • Blockchain—How Factors Can Utilize this Technology & Predictions for How it Will Change Factoring (Carol Van Cleef, Esq., LeClairRyan) • Ignite Brilliance in Your Culture (AmyK Hutchins, Business Strategist)

Continued on page 30

The Commercial Factor | FEBRUARY 2019 21 COMPETITION AND TECHNOLOGY FEBRUARY 2019

Take Your Customer Relationship Management to the Next Level Why are so many asset-based lenders and factoring companies moving from traditional software packages to Salesforce.com? What is driving the excitement around this platform and is it deserving of all of the hype?

BY KRISTIAN DOLAN

On the surface, Salesforce.com is pulling PayNet, D&B, Experian, training. What does this mean for simply a Customer Relationship LexisNexis and numerous others. you? Your existing staff can easily Management (CRM) software. There Want to file a UCC? You guessed and quickly be trained to manage are many CRMs available. In fact, it; there are multiple apps that the solution. Salesforce allows, and there are many in existence that can accomplish that, too. Need to even encourages, decoupling your may even be more cost effective establish pricing? Both TValue & company from the dependencies of than Salesforce.com. So, you might others offer plug and play solutions working solely with one vendor. ask yourself, why then are so many compatible with Salesforce.com. lenders moving to Salesforce.com? There are massive economies of 3 Platform. True Configuration We believe Salesforce is a major scale that are driving the availability based product. If you want to add disrupter in the ABL/Factoring of apps on Salesforce. The power of a new screen to manage inventory, industry. Where lenders used to Salesforce versus traditional soft- a non-developer can do this within be limited by a finite set of solu- ware in our market is it’s not limited minutes in Salesforce. If you want to tions, Salesforce has introduced an to ABL/Factoring. Salesforce lever- automate an email to be sent once a entirely different way of looking at ages the economies of scale across deal is credit approved, this can be enterprise software and in turn, it’s all industries. Because of this, we are set up within minutes in Salesforce opening doors for our industry to no longer limited by what has been by a non-developer. The Salesforce execute business in unique ways. done within the finance industry; we platform enables you to dream big While there are many reasons we are able to leverage economies of and execute with little effort. feel that Salesforce is an innovator scale across all industries thanks to within the industry, let us explore Salesforce and its Marketplace. 4 our top 4 reasons in more detail: Future Proof. Have you upgraded your loan origination 2 Open. When you begin working 1 system or servicing system? If Marketplace. Just like we’re with Salesforce you are no longer not, you are lucky. If you have, used to a plethora of apps avail- limited to one software vendor. you are well aware that it can be able for our Android and iPhone The Salesforce platform is open to an expensive and painful process. devices, there are also thousands partners across the globe. Utilize With Salesforce, your framework of apps available on the Salesforce industry-specific specialists or hire is constantly being upgraded to Marketplace. In fact, Salesforce has offshore developers; Salesforce the latest infrastructure and func- the largest enterprise app store in allows you to select your vendors tionality. Because Salesforce.com the industry. Want to pull consumer based on your specific needs. Best proactively does this for you, you credit? There are apps for that of all, it’s possible for almost anyone don’t have to worry about upgrading (multiple). Want to pull a business to become a Salesforce expert your system. This is the true power credit report? There are apps for utilizing publicly accessible data and of utilizing a cloud-based tool.

22 The Commercial Factor | FEBRUARY 2019 Increasing Effectiveness = Better While we believe Salesforce.com is a 5 Mobile. Almost every action Customer Experience + Happier great tool, there are considerations you take in Salesforce is also execut- Internal Staff + Improved Sales. that need to be taken into account able in the Salesforce1 mobile app. More and more lenders are before making the switch: Request credit reports, approve taking the CRM and extending it deals and review analytics, anytime Salesforce by itself is only a well beyond customer service. and anywhere. customer relationship management Salesforce can be used as a full (CRM) system. It requires thorough

Loan Origination System. How does planning to make it work well for What does all of this really mean for Salesforce.com do this? your organization. The good news your business? Using any CRM tool is, this has been done many times effectively should help you increase 1 You are able to maintain all before and you can benefit from sales. Specifically, with Salesforce. of your data in one place in the those with similar experiences. Talk com you are able to more closely cloud. Within seconds, you can see to your peers and talk to industry concentrate on increasing sales credit report data, D&B, PayNet, experts about how to effectively because: UCC data all on one dashboard in implement a solution that will work Salesforce. best for your business. 1 You are able to access your data Keep in mind; you don’t need to anytime and anywhere. If you forgot create the perfect solution right 2 You can see exactly where your computer, no big deal, you only from the get-go. This is a platform. the deals are at in the life-cycle. need your Mobile phone with the As such, you can incrementally turn I.e., have docs gone out? Are you Salesforce1 app. this into a robust solution over time. waiting to hear back from your Start small, but with a strategic plan syndication partners? in place and you can quickly, effec- 2 You can check where your part- tively and affordably build Salesforce ners or customers are in the process into a robust solution that works 3 Effective communication, at any time. Pull up the mobile app perfectly to meet your company’s both internally and externally. and visually see where your vendors needs and ultimately help you better Email isn’t always the most effec- and customers are on a map. achieve your goals. • tive way to manage the workflow of a deal. Salesforce can be used 3 Utilize Salesforce to create to communicate exactly what is cohesive marketing campaigns needed to fund the deal internally which tie together trade shows, and externally to your customers or Kristian Dolan is email marketing and social media vendors. I.e., Salesforce has tools the co-owner and presence. Even capture the success that can serve as a single point of solution architect of these efforts and effectively reference for everyone to be kept up at Tamarack, a measure the ROI on your marketing to date on where the deal is in the Salesforce partner dollar with tracking available in life-cycle. who exclusively works in commercial lending. Salesforce. Kristian has been working in the 4 Mobility. At the last lending software industry for 20 years. He has been focused on providing 4 Fully integrate with Outlook conference, I ran into two of our loan origination solutions for the to more effectively and efficiently clients within 30 minutes and they were reviewing and approving deals commercial lending industries communicate via email. for the past 15 years. Kristian can from their mobile phones. One joked be reached by phone at 612- that they used to be able to leave 5 483-1210 or by email at kdolan@ Create detailed reports that the office and get a break, but now tamarackconsulting.com. are accessible anywhere. Where there is no reason you can’t enter do your deals sit in the pipeline? apps, pull credit, approve deals, Which team members own the deal and generate documents all from and what are the next steps? What the palm of your hand using the deals are coming to term and might Salesforce1 app. have renewal opportunities? These questions are answered via effective reporting.

The Commercial Factor | FEBRUARY 2019 23 WHAT’S NEW AT IFA FEBRUARY 2019

Status Report on Regulatory Changes BY BOB ZADEK, ESQ., ATTORNEY, BUCHALTER

On behalf of the American Factoring California Department of Business require factors to set forth the “cost” Association, I am pleased to provide Oversight has enacted supporting of funds, with the specifics still a a brief report on the status of the regulations. It is expected that the work in progress state and federal legislative efforts regulations may not be finalized New York AB 3638 underway relating to the regulation until the middle of 2020 , The IFA, of small business financing, and the as well as other interested “stake- New York’s law provided for possible effect, good and bad, on holders” have provided input, and forfeiture of principal of a usurious the IFA membership. it is far too early to determine what loan . However certain remedies the final regulations will contain. which are available to consumers California SB 1235 are not available to corporations As you know, California passed New Jersey SB 2262 and other business entities. This its “first in the nation” disclosure Not to be outdone by California, bill seeks to extend those protec- statute requiring lenders and factors New Jersey is working on its own tions to small businesses. The to small businesses (as defined in financial terms disclosure statute. significance of this legislation is the the statute) to disclose key financial Hearings have been held, and beginning of the blurring of lines terms. This legislation has been the legislative committee work is between consumer lending and generally discussed in prior issues of progressing. It breaks down finan- small business lenders. Historically, the Commercial Factor. The statute cial transactions in five categories, the regulatory approach between becomes effective as soon as the including factoring. The final bill will consumer and business lending was quite different. As this and other pending or enacted legislation at the state level is demonstrating, that The IFA makes finding a vendor easier... distinction is quickly disappearing. HR 7354—Small Business Lending Fairness Act Senators Rubio and Brown are promoting this bill, which has been introduced into the House of Representatives as an amendment to Federal Truth in Lending Act to extend certain of its protections to small businesses. Specifically, it seeks to make the use of confessions of judgments, which are extensively used by merchant cash advance For information visit: www.factoring.org companies to the consternation of FEATURING OUR factors, illegal under most circum- • THE IFA’s ANNUAL CONFERENCE is the world’s largest event for Factors, Asset Based stances. While the content of this Vendor Locator Service Lenders & Supply Chain Finance Companies. bill does not seem to offer a threat The IFA’s Vendor Locator Service lists vendors of interest to the • CERTIFIED ACCOUNT EXECUTIVE to factors, as stated above, this is Receivable Finance & Factoring industries, including attorneys, IN FACTORING (CAEF) designation is the first professional certification of its kind. another example of the blurring of UCC search firms, funding sources, and many more. the lines between consumer and • EDUCATION, training courses, meetings, In addition to all qualified Vendors, there SEARCH FOR VENDORS BY: webinars & relevant events for the Factoring small business lending. Industry. are also IFA Preferred Vendors listed that Category New York AB 3636 offer discounts or superior services to IFA State/Province • DISCUSSIONS, MEETINGS & FORUMS members. Country Access to the IFA Member Community This bill has just been introduced Discussion Forum. Keyword in the New York legislature, which

• STORE - Purchase Factoring books, forms, seeks to ban the use of confes- 6627 Bay Laurel Pl., Ste C, 805-773-0011 reports, webinars and more. Avila Beach, CA 93424 factoring.org • JOB BOARD - Search for or list jobs. sions of judgment in commercial transactions.

24 The Commercial Factor | FEBRUARY 2019 The takeaways from this are quite the factor to litigation by a present 4. Ultimately, it is possible (likely?) obvious: or former client, or, even worse, that a collection of dissimilar state 1. Small business commercial lending class actions. This will depend on disclosure statutes will make compli- will be regulated, at first by states. the remedies which a state statute ance costs so much higher that Thus lenders and likely factors will offers to aggrieved factoring clients. the AFA and other affected lender find various aspects of their transac- Although none of the statutes or groups will press for a uniform tions governed by state law. regulations presently be considered federal statute, to usurp the state pose that risk, it is still early in the statutes, thereby entering the great 2. Disclosure regulations will slightly process, and states are only experi- unknown of federal regulation. increase transaction costs, due to menting with legislation at this the expense incident to compliance. Factors will need the AFA and its time. Who knows what will happen effective lobbying and legislative 3. Disclosure regulations have a when class action attorneys start services more than ever, and the AFA potential hidden cost, which the a lobbying effort at the state level? will need its membership to support AFA must work hard to mitigate. The AFA must be vigilant and well- the growing cost. It is possible that compliance funded to confront this challenge. failure by a factor could expose Stay tuned.

2019 Members As of February 1, 2019 Diamond Member ($10,000+) Diana Luoma—Sekady Capital Levinson, Arshonsky & Kurtz, LLP Accord Financial, Inc. Durham Commercial Capital QC Capital Solutions Apex Capital Corp Evergreen Working Capital Mazon Associates, Inc. Crestmark a Division of MetaBank FirstLine Funding Group Michael Ullman—Ullman & Ullman, P.A. D & S Factors Lenders Funding, LLC Nationwide Capital Funding, Inc. Great Plains Transportation Services, Inc. Match Factors, Inc. New Century Financial Gulf Coast Business Credit Prime Capital Group, Inc. Orange Commercial Credit International Factoring Association Prosperity Funding, Inc. Paragon Financial Group J D Factors Rioux Capital Primary Funding Corporation LSQ Funding Group Riviera Finance, LLC Spectrum Commercial Services Company MP Star Financial, Inc. SevenOaks Capital Associates, LLC The Hamilton Group Sallyport Commercial Finance, LLC SouthStar Capital, LLC Viva Capital Funding LLC TBS Factoring Service, LLC Transport Factoring, Inc. Xynergy Healthcare Capital LLC Triumph Business Capital Silver ($1,000—$2,500) Bronze ($500—$1,000) Platinum ($5,000—$10,000) AGR Financial Advantage Business Capital BAMfi LLC Alleon Capital Partners LLC Business to Business Capital Corp. Far West Capital Amerisource Funding, Inc. Camel Financial, Inc. FSW Funding AmeriTrust Capital Corp. Concept Financial Group Goodman Factors, a division of Brookridge Funding Entrepreneur Growth Capital Independent Bank Business Finance Corporation Exchange Capital Corporation Interstate Capital Corporation Capital Solutions Bancorp, LLC Finance One, Inc. Mickey Seeman— Cash Flow Resources, LLC Firmco Business Funding Owner, Sunbelt Finance Commercial Finance Consultants Grace Capital Resources, LLC Millennium Funding Commercial Finance Group Greenback Capital Phoenix Capital Group, LLC Commonwealth Capital, LLC Integrated Logistics & Associates PRN Funding Contractors Capital Solutions MarcFunding, LLC Republic Business Credit, LLC Coral Capital Solutions LLC Other (Under $500) TAFS, Inc. CV Credit Inc. David B. Tatge, PLLC United Capital Funding Corp. David Jencks—Jencks & Jencks, PC FactoringClub Gold ($2,500—$5,000) David Pape—Commercial Business Hawaii Receivables Management, LLC American Funding Solutions LLC Funding Corporation Plus Funding Group AmeriFactors Financial Group, LLC Factor King, LLC Stonebridge Financial Services, Inc. Assist Financial Services, Inc. Gateway Commercial Finance TradeGate Finance, Inc. Bay View Funding J.O.B.E. Services, Inc. Commission Express National, Inc. K.W. Receivables Kiran Ramasamy—Vayana Network The Commercial Factor | FEBRUARY 2019 25 WHAT’S NEW AT IFA FEBRUARY 2019

Our Preferred Vendors have undergone a screening and evaluation process. When you contact the Preferred Vendors, you will need to indicate that you are an IFA member to receive your benefit. If you offer a good or service to the Factoring Industry and are interested in applying for Preferred Vendor Status, please contact the IFA at 805-773-0011.

ASSOCIATIONS CREDIT IFA Member Benefits: 50% cost savings for the monthly membership fee. It is normally Ansonia Credit Data The following trade associations offer member $1,000 per month, but IFA members will pay pricing for events attended by IFA members: With more than 250 Factors and over $800 $500 per month. billion in data, Ansonia provides Factors and ABL Beijing Commercial Factoring lenders an innovative way of managing debtor CREDIT CARD PROCESSING Association (BCFA) and COMPETITION AND TECHNOLOGY risk. Clarus Merchant Services Colombian Association of Factoring Our business credit reports feature current and Clarus Merchant Services offers a custom (CAF) historical days-to-pay information collected program developed specifically for how the directly from the accounts receivable depart- Commercial Factoring Expertise Factoring Industry processes their credit card ments of small and large factors, and other transactions. Our program provides detailed Committee of China (CFEC) companies across all segments. www.cfec.org.cn reporting that allows tracking of each invoice and Phone: 855-ANSONIA • 855-267-6642 x.103 fee transaction for easy account reconciliation Ecuadorian Factoring Association www.ansoniacreditdata.com with their customers and clients. We work with (ASOFACTOR) IFA Member Benefits: Free VIGILANTE™ each member to ensure all processing costs www.asofactoring.org Portfolio Analysis. Try Ansonia’s unique new are covered and that they are doing so within program for monitoring credit portfolio the guidelines of MasterCard / Visa. In addition FCI risk. Call today to receive a comprehensive we provide IFA members direct access to their www.fci.nl review of your entire portfolio. account manager for immediate response and Romanian Factoring Association Credit2B support. (RFA) Trusted by all of the majors because of the sheer David Powers, Member Relationship Manger www.asociatiadefactoring.ro volume of Factor trade and 98% third-party Phone: 540-222-3925, • www.clarusdc.com CERTIFIED EMAIL data coverage of active businesses in North Email: [email protected] America, Credit2B is a cloud-based platform IFA Member Benefits: Any IFA member that RMail that empowers accurate and timely decisions purchases the CardX program will receive a Go Paperless. Switch to RMail to Send your by connecting the experiences of trade credit one-time $200 rebate once the member has Important Notices. RMail services allow factors to grantors around their common business processed a whole month using the program. end disputes attributed to missing, misplaced or customers. We combine this highly valuable ePaymentAmerica denied receipt of notification emails for notices trade network information of approximately ePaymentAmerica is the nation’s leading of assignment, notices of default, borrowing base $700B in recent receivables with live bureau provider of processing services for the factoring, certificates, and other important notifications. It and public filing information to provide compre- A/R financing, and P/O financing industries. They also helps speed invoice collections with proof of hensive financial risk profiles, all in real time. offer IFA members exclusive VISA, MasterCard, invoice delivery irrefutably starting the accounts Our dashboard also provides Factor specific receivable aging clock. scoring, Factor client risk pools, monitoring, peer American Express and discover pricing, a benchmarks and comprehensive trade data pack discount on their virtual gateway, and a discount www.rpost.com/ifa on PCI Compliance Certifications. IFA Members save $300! Subscribe to 1000 solutions for integration into your enterprise units RMail plan for only $390! (Normally software. Phone: 901-385-5327 $690) Phone: 212-714-4500 www.epaymentamerica.com Website: www.credit2b.com Email: [email protected] CONSULTING IFA Member Benefits: Join the largest IFA Member Benefits: Interchange Plus FactorHelp virtual factor community. Receive 10% Pricing* Bundled Monthly Service Fee of $30.00 (includes IRS regulatory compli- FactorHelp has come to be regarded as the price discounts for being an IFA member. ance, account maintenance, PCI compliance, factoring industry’s premier resource provider. Complimentary invitations to our hosted events in NYC. virtual gateway & online management tool.) Their manuals, in use on every continent of *Based on volume/ transaction count. the world, are setting the industry standard, FactorsNetwork and their reputation as the one-call solution DISASTER RECOVERY SERVICES FactorsNetwork provides an online platform for factoring problems is growing. By consis- where Factors share trade experiences Agility Recovery tently introducing innovative, viable products, with each other. Members are able to pull vigilantly cultivating an extensive alliance of For the past 25 years, Agility Recovery has unlimited Credit Reports as well as monitor Strategic Partners and providing the profes- been a premier provider of onsite recovery and analyze their portfolio. Transportation sional expertise demanded of an industry solutions across the United States and Canada. Factors benefit from our CarrierMonitoring and leader, FactorHelp strives to maintain its goal of When disaster hits, Agility will be on the scene, providing the unparalleled service the factoring ChameleonCatcher programs and their clients providing you with any, or all, of the critical industry expects from a solutions partner. profit from our LoadBoard. We even offer a Sales elements you need to keep your business in busi- Tool to help you find new clients. ness: power, space, technology, connectivity. Phone: 972-722-3700 • www.factorhelp.com Membership also includes access to a dedicated IFA Members receive a discount of 10% on Phone: 435-659-4612 their consulting fees and 5% discount on all www.factorsnetwork.com Continuity Planner and secure access to your FactorHelp products in the IFA store.

26 The Commercial Factor | FEBRUARY 2019 myAgility planning portal to assist in building SOFTWARE portfolio management workflows that save and maintaining your business continuity plan. time, improve accuracy and improve the overall NEW! Artis Trade Systems Phone: 866-364-9696 borrowing experience. Artis Trade Systems offers ArtisPay, the www.agilityrecovery.com Phone: 205-972-8900, option 3 revolutionary Supply Chain Finance (SCF) app Email: [email protected] www.profitstars.com that allows banks and lenders to provide buyers IFA members will receive 10% off new IFA Member Benefits: 5% discount to each and suppliers with a flexible, customizable, easy- ProfitStars lending solutions product respective client’s monthly ReadySuite to-use enterprise-grade software. ArtisPay is a purchase. For IFA members who are membership fee. fully cloud-based software-as-a-service (SaaS). currently ProfitStars customers: Free FUNDING Partnering with Artis Trade endows lenders one day FactorSoft refresher course, per year, at ProfitStars’ training facility in with a high-tech innovative partner with deep Liquid Capital Corp. Birmingham, AL. industry experience that will help market and Liquid Capital has been in the Factoring industry grow their SCF program. TAX COMPLIANCE since 1999 and entered into a partnership with Next Edge Capital in 2015. This relationship has Phone: 480-250-8186 • www.artistrade.net Tax Guard IFA members will receive a 67% discount allowed them to pursue an aggressive growth Tax Guard fills a critical gap in a commercial on the registration fee, to $500 from lender’s credit risk management toolset with strategy focused on the following key initiatives: $1,500, a savings of $1,000. • The acquisition of A/R portfolios from Factors efficient, real-time and actionable insight into the true, non-public IRS tax compliance status looking to exit the industry FactorFox FactorFox Cirrus is a cloud application for of their prospects and clients. Our due diligence Member benefit: Trailer fees for the life of reports, tax compliance monitoring and resolution the acquired accounts factors, their clients, brokers, lenders, and others who enter or access data. Entries can be solutions support commercial lenders throughout • Soliciting Factors to join the Liquid Capital every stage of the funding life-cycle. network to gain access to additional capital, a made and reports accessed from any internet- connected computer, tablet, or smart phone. As Phone: 646-502-4478 • www.tax-guard.com robust range of working capital and trade finance a web-native program, there is no extra cost for Email: Rich Porterfield; products, extensive marketing and back office setting up your account or to access your data; [email protected] support further, you receive three hours of free training IFA Members will receive ten free IRS Tax Member benefit: Liquid will pay your IFA online. FactorFox’s various versions make it Return Transcripts within the first 30 days membership or Annual Conference registra- suitable for nearly any size factor. of service. One time offer also extended to current IFA members. tion fee for the following year. Phone: 866-432-2409 • www.factorfox.com • ABL referrals from existing Factors who would In addition to the one-month free trial for UCC SEARCH not normally fund this type of transaction everyone, IFA Members receive an additional Member Benefit: The referring Factor will month to try the complete program. First Corporate Solutions earn an origination fee and have the oppor- First Corporate Solutions is a full service public Finvoice records provider specializing in the research, tunity to participate in the funding. Finvoice offers traditional factoring companies retrieval and filing of public records nationwide Robert Thompson So and asset-based lenders a simple-to-use and and internationally. Their services include Phone: 866-272-3704 comprehensive software solution to help them industry standards such as UCC, lien and litiga- www.Liquidcapitalcorp.com become a modern and efficient online lender. tion searching, UCC and corporate filing services, Email: [email protected] Finvoice came out of a passion to help small nationwide registered agent coverage and businesses who generate 67% of jobs and 50% real property title searching, as well as unique MARKETING of the World’s GDP. solutions such as state and county account 50 Words LLC Andrew Bertolina monitoring designed specifically for Factors. 50 Words is a marketing outsource firm Phone: 310-951-0596 Phone: 800-406-1577 • www.ficoso.com for companies that either do not have a www.finvoice.com Email: [email protected] marketing department or that need to add IFA Member Benefit: Complimentary landing IFA members will receive a 10% discount off of the retail rates of their signature state and more manpower to their existing marketing page review/optimization for digital conver- county account monitoring product. team. They serve as your dedicated marketing sion. 15% discount on pricing for the first department. year. Phone: 610-631-5702 HubTran www.50wordsmarketing.com HubTran is the leading provider of back office IFA CALENDAR OF IFA Member Benefits: IFA Members will automation technology for factoring compa- receive five free hours of marketing services nies. HubTran’s SaaS platform streamlines EVENTS 2019 with the purchase of any marketing service. invoice processing, document management, (Offer to new clients only) and exception handling. Customers increase February 14 productivity 4X, reduce errors and increase RECRUITMENT AGENCY capacity. HubTran’s innovative technology lever- Webinar: Take Notice of Your Notice Commercial Finance Consultants ages Optical Character Recognition and Artificial of Assignment Webinar Intelligence to simplify back office work without Established in 2002, CFC is the premier provider requiring massive investments of time in training 1pm-2pm PST of human talent to the factoring industry. CFC’s and integration. goal is to provide their clients with the best March 5 available human capital and the most current Tinamarie Sulpizio industry information to assist in accomplishing Phone: 928-855-0170 • www.hubtran.com Joint Meeting with NYIC and IFA their growth potential. IFA Member Benefit: 1 week trial and waived setup/integration fees Northeast Chapter Phone: 469-402-4000 • www.searchcf.com Arno Ristorante, New York, NY Email: [email protected] ProfitStars® IFA members will receive an additional ProfitStars® is an industry-leading provider of April 3 60 days added to the guarantee on all portfolio management systems for commercial placements. finance, and offers a common framework Factoring Essentials Training for factoring, asset-based lending, inventory Course finance, and lines of credit. Our dynamic Commercial Lending Center Suite™ incorporates Manchester Grand Hyatt all-digital loan origination, decisioning and San Diego, CA

The Commercial Factor | FEBRUARY 2019 27 COMPETITION AND TECHNOLOGY FEBRUARY 2019

Current Technical Disruptions in Transportation Change in the trucking industry has existed for years, and arguably, change continues to accelerate. The regulatory environment, fuel costs, driver shortages and economic conditions continue to vary.

BY DAVID JENCKS

These issues have a significant efficiency. The ability to monitor 1 Telematics: The integration of impact on overall industry health; location, prove up actual detention information and communication however, they are not technically time, protect against fabricated technology enables vehicles to disruptive. Four trends are currently claim issues by monitoring equip- send, receive and store information disrupting the trucking industry. It ment, and the like, help and project related to a truck and trailer via a is important to recognize both the the motor carrier. telecommunication device. advantages these disruptions offer, • The Threats: New technologies • The Advantages: Complete but also realize the threats they pose add extra cost to the truck, which visibility into every aspect of a to the Carrier, and thus indirectly, can be difficult for smaller fleets tractor and trailer and load move- Factors. or owner-operators to absorb. No ment provides the data necessary matter the size of the Carrier, it to optimize a truck’s revenue and

28 The Commercial Factor | FEBRUARY 2019 must give consideration to the time to the end user as fast as possible. platforms will have to be adopted, and money it takes to install equip- The demand for both services has learned, and will come with costs. ment, train drivers and maintenance exploded with Amazon and other Immediate payment options may workers. retailers chasing fast to deliver to pose a threat to the need for • The Outlook: Carriers need to use homes and businesses. factoring. However, the simple telematics as more than just a way • The Advantages: Carriers will see existence of an immediate payment to stay compliant with the latest savings in time and fuel, reduced option does not mean that standard regulations. The data provided also chances of delivery delays due to industry payment terms will change; gives information that can be used weather or construction, and a it only means that they can. to collect more detention, defend range of other issues that can plague • The Outlook: An incorruptible, against fabricated claims, and keep longer-range delivery. Carriers can instantaneous record of all aspects even the smallest of fleets more do more business and speed of of a transportation transaction will organized and efficient. return is improved. come, but technology standards • The Threats: Will a Carrier have first have to be resolved and agreed to by all parties to such a transac- 2 the right type of fleet to ensure Transportation as a Service tion. This is a serious challenge (TaaS): The uberization of trucking optimization of the use of the vehicles? Will the Carrier be forced and one that will result in delayed is the use of app-based technologies implementation. for making the most use of empty to purchase more and different space in available trucks. This fleet vehicles? The challenge to concept is not new at all. It is a the Factor is that last mile and final For those in the transportation modern form of freight consolida- mile delivery invoices will be much industry, or for those whose busi- tion, pure and simple. smaller and will not come with ness model serves the Carrier, you many invoice “add ons” like fuel must remember the major disrup- • The Advantages: For the Carrier, surcharges. this is a way to potentially monetize tions that began around 2015 can be empty miles. For shippers, it’s a way • The Outlook: The last mile type the norm within a decade. Uber did to reduce costs and also guarantee delivery market will continue to not even exist in 2008 and today freight space for seasonal or other grow and be in demand. Carriers their bookings are higher than the market fluctuations in orders. may diversify with a segment of entire United States taxi industry. their freight movements being Technical disruptions in trucking are • The Threats: Shippers are being represented by this growing busi- not the future; they are changing the asked to put their load in the hands ness but will likely face optimization face of the industry today. Factors of a potentially unfamiliar carrier costs to do so. need to understand and use the or driver. The threat to the Factor technology changes to stay relevant is immediate or near immediate to their Carriers and improve their 4 payment which reduces the need for Blockchain: Blockchain stores own operations. • the Carrier to use a Factor or use the incorruptible blocks of information Factor as much. across a shared digital network. • The Outlook: Shippers and brokers It could be used in trucking to create a new system of completing will look for efficiencies in freight David J. Jencks consolidation in the most efficient transactions, tracking shipments is an attorney ways. The question for Factors and managing fleets. A distributed and consultant is whether such modern freight ledger of records can serve as a to factors and consolidation forms will accelerate network to safely share information lenders in the current industry payment norms. and transmit payment instantly. transportation • The Advantages: An incorruptible industry. He also represents brokers, carriers and forwarders. block of information preserving all 3 David is a member of Delta Nu Last-Mile and Final Mile facets of a transportation movement Alpha, the professional fraternity Delivery: Last mile delivery is promotes truth and fairness and can typically defined as the movement involved in the education of protect the Carrier. Blockchain can transportation professionals. He of goods from a transportation hub be seen as the method of preserva- can be reached at davidjencks@ to the final delivery destination. The tion of all telematics taken in a form jenckslaw.com. final delivery destination is typically not subject to alteration and fraud. a personal residence. The focus of last mile logistics is to deliver items • The Threats: The technology

The Commercial Factor | FEBRUARY 2019 29 2019 IFA FACTORING CONFERENCE Continued from page 21

• Develop Your Sales Team by NETWORKING EVENTS: to describe what makes this city so Overcoming Sales Challenges special; you simply have to experi- • Triumph Welcome Reception (Paula Hope, Coach & Author) ence it for yourself. sponsored by Triumph Business • Report from the Courts (Bob Capital and Triumph Commercial There are endless possibilities to Zadek, Esq., Buchalter) Finance learn, grow and socialize with the brightest minds in the industry • Transportation Factoring (David • Golf Tournament sponsored by at the 25th Annual IFA Factoring Jencks, Esq., Jencks & Jencks, PC) Wells Fargo Capital Finance—Lender Conference. Whether you are a Finance Division • Factoring 101 (Brian Center, Factor, Asset Based Lender, trade Liquid Capital Corp.) • San Diego Food Tour finance professional, bank or anyone • Sales 101 (Mark Baker, BAM • Young Professionals Reception that supports these groups, join Worldwide, LLC) the top industry professionals • Chapter Receptions by attending this unparalleled • Unique Challenges of Factoring • Thursday Reception sponsored networking and educational event. in Latin America (Pedro Armada, by Crestmark Bank, Lenders Funding CFE, Armada Risk Consulting) For more information and to and Saint John Capital Corp. register, go to PANELS: • Tax Guard Dessert Reception www.factoringconference.com. • If I Could Turn Back Time • Breakout Small Factor Lunch • Artificial Intelligence and the • Breakout Transportation Factoring Industry Factoring Lunch • Comparing Bank Owned vs. The • Closing Event at Parq Restaurant Heather Villa Independent Factor & Nightclub is the Managing • Idea Exchange Director of the • Supply Chain Finance International Factoring • Interactive Legal Panel at “AMERICA’S FINEST CITY” Lightning Speed Association. With more than its fair share of She is responsible for managing • Strategic Roles of Factors in sunshine, gorgeous beaches and a and directing the IFA’s external Expanding the Frontier of Trade in newly buzzing restaurant scene, San communications as well as the 21st Century managing the business affairs of Diego, California, is where the 25th • Dealing with Canadian the Association. She assists with Annual Factoring Conference will event planning, speaker selection Litigation be hosted. Enjoy your stay during and contract negotiations for all the conference at the tallest urban training seminars and conferences, ROUNDTABLES: waterfront resort on the West Coast including the annual Factoring • Roundtable for Women in at the Manchester Grand Hyatt San Conference. Heather can be reached at Commercial Finance Diego. People flock to San Diego and are captivated by its amazing 805-773-0011 ext 301 or • Roundtable for Senior weather, laid back people, and abun- [email protected]. Executives dance of activities, which is why • Roundtable for Young it has gained the name “America’s Professionals Finest City.” An ideal climate, 70 • Roundtable for Operational miles of coastline and diverse topog- Issues raphy draw outdoor enthusiasts to San Diego year-round. With lively • Roundtable for Small Factors neighborhoods, an internationally renowned craft beer scene, and one of the world’s most beautiful urban parks, there’s a whole lot of San Diego to explore. It is difficult

30 The Commercial Factor | FEBRUARY 2019 “THE MUST ATTEND EVENT OF THE YEAR!” For Anyone Involved with the Factoring & Asset Based Lending Industries

APRIL 3-6

CHE AN STE M R

G R T T A N D H YA The World’s

Largest Conference for the DON’T MISS OUT Commercial Finance Industry CALL TO REGISTER: REGISTER • Over 60 Speakers 805-773-0011 TODAY! factoring.org • Exhibit Hall with over 50 vendors 6627 BAY LAUREL PL., STE. C, OR REGISTER ON-LINE AT: AVILA BEACH, CA 93424 • Hospitality Suites & Closing Event INTERNATIONAL mail: P.O. BOX 39, FACTORING • Activities including Golf & Food Tour factoringconference.com AVILA BEACH, CA 93424-0039 ASSOCIATION

The International Factoring Association is registered with the National Association of State The IFA offers CLE credits for the Factoring Conference. Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the Information on approved states is available at info@ National Registry of CPE Sponsors. State boards of accountancy have final authority on factoring.org or contact the IFA at 805-773-0011. the acceptance of individual courses for CPE credit. Complaints regarding registered This conference has been approved for CAEF credits. sponsors may be submitted to the National Registry of CPE Sponsors through its website: For information on approved programs and courses, www.learningmarket.org. please contact the IFA. Unlock the

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