Factoring & Purchase Order Financing Combine To Build A Distributor’s Business


When a Canadian distributor for a European manufacturer of innovative ground screws needed funding for large orders they turned to Greg Norris at Liquid Capital in Toronto and Mark Polinsky of Gateway Trade Funding near Chicago.

The distributor’s products are used in construction to establish a foundation in virtually any terrain. As an alternative to concrete slab foundations, the ground screws allow quick and stable foundations to be installed where traditional solutions may not be ideal. However, shipping the product from the Czech Republic meant that there was a considerable lag time between when payment to the manufacturer was due and when the distributor could collect from the purchaser.

Traditional bank financing was not available because of a number of hurdles including international currency conversions, the innovative and non-traditional nature of the product and the involvement of somewhat risky construction projects.

Funding the transaction

Norris was able to structure a solution involving purchase order financing and factoring that worked well for the distributor, allowing them to create the cash flow needed to complete transactions for customers in both the US and Canada.

“This solution was not without several challenges,” said Norris. “Working with multiple players in multiple countries and funding the significant transportation time all complicated the transactions. Working with Gateway Trade Funding outside Chicago, we were able to fund this and then manage all of the logistics and needs of each participant.”

Funding these transactions is expected to exceed $2.5 million (USD). “The financing solution allows this particular distributor to capture business they would not otherwise be able to transact,” said Polinsky. “It’s helping them to grow their business while introducing innovative solutions to their customers.”

How your business can do the same

Liquid Capital may be able to offer your business purchase order financing and factoring similar to this case. If you’ve been denied traditional bank loans because of issues like international currency conversions or what the banks deem as a risky project, then there is another option with Liquid Capital.

BNN finance video

Watch BNN Video: Funding Alternative To Hard-To-Get Bank Loans

You may be one of the many businesses all across the U.S. and Canada that have a hard time getting access to bank loans. Either you don’t have the required assets deemed necessary by the banks, your gross income is deemed ‘too low,’ or you may have a limited operating history.

Without access to capital, your company will have a hard time growing and becoming more profitable.

“Factoring” is an alternative to the traditional bank loan—and it’s not yet widely known. This funding option is already very popular overseas and allows you to increase your cash flow to put your resources towards operating your business the way you want.

Watch Robert Thompson-So, Chief Strategy Officer of Liquid Capital explain to BNN how factoring finance solutions help small to medium-sized business leverage their accounts receivable to get to the next level.

Consider factoring as an option for your business, and make the most of your working capital.

old school marketing

7 Old-School SMB Marketing Tricks To Put Up Your Sleeve

old school marketing

Running a small or medium-sized business isn’t easy. One of the hardest parts is figuring out how to market and promote your company. You’re not alone.

There are traditional methods like newspapers, radio and TV, along with newer media tactics including digital advertising, search marketing and social media. How will you figure out which tactics to invest your time and energy into, and what will give you the most bang for you buck?

There’s no doubt that new-school digital marketing methods are effective, but you might be neglecting traditional tried, tested and true methods that are still valuable. And with everybody rushing to the new strategies, there could be less competition back in old-school marketing.

Here are seven useful tips and tricks you can use to build a successful marketing campaign using those traditional methods of marketing.

1. Get Your Story Published in the Local Newspaper

Newspapers might seem outdated, but there are great opportunities that still exist in your local paper – especially since most papers also have a supporting website where stories are published.

Contact the Editor of the business section and show how your startup is different from all the others out there. Create a compelling story about your history, what you offer the community and how you are raising the bar in the business world. Every publication is interested in intriguing stories, and by offering a cost effective pitch (aka free), you may be able to persuade them to write a profile-raising piece on you.

2. Talk to Magazine Editors

You may be thinking, “What? First outdated newspapers and now outdated magazines?” It’s true – magazines can be a great way to get exposure for your business, and there are plenty around looking to publish your story.

Local exposure is the best, so start with the most local publication possible. It may be a small town or niche business magazine that you target. And make sure you get links to your website included in the online version of the story so that the readers can quickly click to your business site.

Bonus: Ask the magazine if you can contribute to an ‘Ask the Expert’ column. Then provide ongoing expert pieces for them to publish, either in the print version or online.

3. Make Effective Business Cards, and Don’t Forget to Hand Them Out

Business cards are low tech but remain important for networking. Don’t leave home without them, as you never know who you’ll bump into.

Make sure your business card contains all relevant contact information, like your website address and any social media accounts – especially LinkedIn if you’re a B2B professional.

And make use of any blank space on your cards to provide details about your products, services and a reason for people to connect with you. For example, you could include a special discount only to people with your business card. That gives them a reason to hold onto your card.

Bonus: Get their business card as well, and then connect with them on LinkedIn or other social media accounts that same day. Make sure to follow-up with a message to add a personal touch to your new business relationship.

4. Set Up a Referral Program

If you have a large number of suppliers you regularly work with, set up a referral program to get your customers rewards. Imagine being able to offer your customers exclusive discounts on additional products and services? That would be reason enough to keep coming back to you.

And if you take this traditional program into the new-school, you can offer your referral program as part of your company e-newsletter. By signing up for these emails, your customers will have handy access to all the promotions at your business and other partner stores.

5. Offer Seasonal Discounts and Sales

Everyone likes a summer saving or a winter deal! It doesn’t really matter the season, just give your customers a discount for shopping at a particular time of year. Or create a theme around a seasonal holiday like Halloween, to offer Spooky Savings and Frighteningly Low Prices. There’s a certain charm to having specials around holidays, and it shows your customers that you can have a little fun with your business as well.

6. Send Good Old Fashioned Snail Mail

Mail drops are definitely old-school, but don’t underestimate them. Dropping leaflets through people’s mailboxes still has a measurable effect as long as you do this strategically. Keep your radius tight if you have a physical store location, so people will have a better chance of popping in your store.

Make sure your mailer has a clear call-to-action on it as well. Better yet, give them an incentive to hold on to that piece of mail. For example, include a code they need to enter for a website promotion or tell them to present that mailer in your store to receive a free piece of swag.

Bonus: Create a hard copy flyer, then take advantage of the message boards available at other local businesses. A flyer can be a quick, cheap and easy promotion of your company. Make sure you get permission first, and don’t forget your strong calls-to-action.

7. Connect with Your Local Chamber of Commerce

Your local Chamber of Commerce can always offer some valuable help. Make sure you join up so that you can network with other local business owners. It’s surprisingly effective to chat with other business owners in your area and learn the tactics they use to market to their customers and prospects.

Then follow the Chamber of Commerce online and make sure you attend events throughout the year. You may be able to get ongoing support and assistance that would cost thousands of dollars from third party sources.

Do you have an old-school method of marketing your business that has worked effectively? Tell us in the comments section.

cash flow solutions

3 Cash Flow Solutions To Relieve Your Business Funding Woes

cash flow solutions

4 out of 5 businesses fail within the first 18 months!” Sound familiar?

How about, “Companies without experienced managers are more likely to crash and burn.”

You’ve undoubtedly heard these quotes about new business ventures.

Sadly, legions of entrepreneurs have come face-to-face with the realization that the companies they’ve built and nurtured from day one were much more likely to fail than they were to succeed.

This is not necessarily due to the entrepreneur’s lack of business acumen. And it doesn’t mean that the products or services they offered were poorly executed. So what could it be?

The truth of the matter is that many businesses fail because of a lack of funding and irregular cash flow. How do you avoid these pitfalls?

Why Traditional Small and Medium Business Funding Doesn’t Work

Traditionally, if you were looking to build your own business you needed two things: an idea and the money to make it happen.

With a fully fleshed out idea, an eager entrepreneur would then approach an investor or financial institution. Both sides would agree to the method of investment (shares or debt) and then determine how interest or dividends will be paid. That’s a pretty typical scenario we’re all used to seeing.

The problem is that many new companies have incredibly volatile start-up years, and very few businesses experience a regular income stream. Failure to make repayments on loans could not only result in penalties, but also a freeze or recall of capital at a crucial time. Or worse, it could force the business to close their doors altogether.

Owners are finding that this “capital rigidity” is no longer the best way to do business in an economy that is seeing more than 500,000 small businesses emerge each and every month in the United States alone.

Because small businesses continue to represent a growing portion of the economy, it is in everyone’s best interest to ensure fledgling enterprises succeed – and that means securing capital.

Insufficient or unreliable capital can cripple an emerging business. Not having enough cash on hand to purchase inventory or hire employees can result in a delay or inability to fulfill orders. Either way, your company’s reputation can take a hit and you may not recover.

This is where creative cash flow solutions come into play. You may not have even realized these were options for your business, but take a closer look. It just may save your business.

Cash Flow Solution #1: Factoring and Invoice Advancements

Rather than funding your business through the use of credit cards or your own personal finances, many entrepreneurs are adopting a better strategy – factoring.

Factoring your ‘accounts receivables’ is essentially selling a company’s account receivables to a third party firm. The third party gets repaid for those accounts once the entrepreneur’s clients have paid up, but in the meantime you get access to cash flow now.

In this way, factoring and invoice advancements act as a short-term loan that allows the business owner to get around the tough loan requirements from a bank.

With that up-front cash, you can invest money in your business operations and execute on your growth strategies in order to secure new accounts and bring more clients into your company. It’s a win-win.

Cash Flow Solution #2: Demand Dividends through private investors

For the micro-enterprise, debt repayments can place a heavy burden on the business owner. That’s where private investment based on your free cash flow can come in handy.

Demand dividends is a loan system based on repayment only when you enter a more stable period where you have free cash flow. That system helps to align investor and entrepreneur goals in three ways:

  1. Determining a reasonable timeframe for capital return (a grace period may be between 10—24 months until repayment may begin)a
  2. Matching the return to the volatility of the market segment
  3. Tying repayments to the business owner’s ability to make payments (simply put, eliminating fixed repayments)

 Demand dividends tie repayments to cash flow and provides a greater grace period than traditional capital loans.

In plain English, you get a loan, can grow your business, and pay that loan back once you’re becoming more profitable. Just make sure you reach that stage fast enough!

Cash Flow Solution #3: Crowdfunding – Give the People What they Want

Crowdfunding has grown dramatically in popularity among small business owners as a means of raising capital.

If the public finds a business plan compelling and the entrepreneur has motivated potential investors, this can work extremely well.

For example, by offering a significant discount on an awesome new product concept when it goes to market, an entrepreneur can gain huge attention on crowdfunding sites like Indiegogo and Kickstarter.

The risk to investors is much smaller because typical investment levels are small and shared with hundreds or even thousands of other investors.

In fact, many investors may not even think of themselves as an “investor” in the traditional sense. These new sites are set up more closely to e-commerce retailers, and to investors the experience is more closely related to a Black Friday deal where you need to scoop the other shoppers to get the coolest new product.

content marketing

Cash In With Content Marketing

content marketing

Whatever term you use – content marketing, sponsored content, or content strategy – it all comes down to giving buying audiences substantive, relevant, useful information in an easy-to-access format, enabling them to consider doing business with you.

Here’s how Content Marketing Institute (CMI) explains this strategic marketing approach: “Instead of pitching your products or services, you are delivering information that makes your buyer more intelligent. The essence of this content strategy is the belief that if we, as businesses, deliver consistent, ongoing valuable information to buyers, they ultimately reward us with their business and loyalty.”

CMI was founded by Joe Pulizzi, a leader in the content marketing movement. His weekly blog, This Week In Content Marketing, recently explored one of the most frequently asked questions about the practice: How does content marketing differ from advertising? Think of content marketing as an invitation vs. advertising, which is unsolicited information and oftentimes an unwanted interruption.

Understanding the difference between advertising and content marketing is half the battle of implementing a content marketing program. The bigger hurdle for many companies is thinking they don’t have meaningful content to share. Every business does! For example, a golf equipment supplier can create a blog with posts on golf trends, the difference in clubs, or how to choose apparel to ensure a comfortable playing experience in extreme heat. A security company could provide prospects with a whitepaper featuring tips for avoiding burglaries. A staffing firm’s e-newsletters can feature articles on how to develop an employee manual or the difference between independent contractors and employees.

PRNewswire explains how to distribute and drive content in its whitepaper “Why Content Marketing’s Really a Question of Marketing Your Content.” A key takeaway from the report: “Developing and executing a content distribution strategy is important because it can help you from both a search and social sharing perspective. After all, people are more likely to share content that you have actively distributed socially yourself. That sharing generates positive signals that search engines not only detect but could also reward with better rankings, which in turn can lead to more organic search traffic and even more social sharing.”

Take time to brainstorm what content would be interesting and valuable to your target audience; then build messages and delivery methods from there. The bonus: Metrics. The data from website visits, email campaigns, and social media activities will influence your content strategy and efforts as you work toward maintaining long-term relationships with your audiences.

Image via Joe the Goat Farmer

Embrace The Internet Of Things

Is your business ready for the Internet of Things (IoT)?

In your everyday life you may already be a part of the IoT, e.g. thermostats, home alarms and entertainment centers joined together digitally and managed from a computer or mobile device. Businesses also can, and increasingly are, bringing together sensors and cloud-computing with office equipment, factory machinery and order fulfillment/inventory systems, streamlining sales and production processes wirelessly. This improves customer relations, productivity and on-time delivery.

There’s no time like the present to get involved. Knowledge@Wharton is an online business analysis journal of The Wharton School at the University of Pennsylvania. In March its experts in collaboration with Dell posted an article to guide businesses through the ever-expanding digital landscape. Leveraging the Internet of Things for Competitive Advantage describes IoT as an “ecosystem” that “consists of data sensors, networks, cloud storage, applications and devices all working together to help companies and consumers manage their digital lives…”

How hot is the topic? What are the trends? International Data Corporation (IDC) is a premier global provider of market intelligence for IT professionals and business executives. Its infographic Connecting the IoT describes what is and forecasts what lies ahead through connectivity. A few insights from IDC:

  • There are currently 13 billion connected things worldwide, expected to grow to 30 billion by 2020.
  • By 2018 60% of IT solutions will become open-sourced allowing vertically-driven IoT markets to form.
  • Millennials, representing 16% of population, will accelerate IoT adoption.

Now is the time to embrace IoT. Consider what devices you frequently use and what data you would like to leverage. Is there client information you want to capture and share with your sales team? What operational systems could be integrated and managed remotely?

Of course there is cost. cites an Accenture study showing that Internet users worldwide (62%) have concerns that purchasing IoT devices and services would be too expensive. Many (47%) are concerned about privacy and security issues. Businesses might require a cloud-based platform to serve as a data center or eCommerce solution. They might need technical support to set up the network and train employees. Plus, what devices should each employee have: a tablet, a smartphone, a laptop?

When you’re ready to look at IoT capabilities for your business, seek the guidance of an IT expert. Though the upfront investment may seem steep, the savings gained from a connected workforce and improved customer relations quickly prove the value of IoT.


Mentorship Grows Business


What if someone told you that doing one thing – at no cost – would increase your company’s revenue by 83%? It might sound too good to be true but that’s what found in its 2014 Business Outcomes Survey. Whether you’re a mentee in need of a mentor or a company grooming mentees to build your business, there is great value in mentorship.

Luis Velasquez is a leadership coach, employee engagement expert, and management trainer. He says in his blog post “7 Trends In Employee Engagement and What Role Mentoring Plays” that employers must mentor their workforce to be competitive in today’s marketplace. The benefits include higher job satisfaction, increased retention and improved productivity. He writes: “Acquiring knowledge through mentoring and applying that knowledge to their current job will not only increase employee output, but will also increase their level of discretionary effort.”

Creating maximum efficiency among your workers means that you’ll need fewer employees to get the job done as your company grows. You’ll avoid the reoccurring expense of searching for and replacing employees. Experts at ZaneBenefits estimate losing a salaried employee can cost as much as two times their annual salary, especially to replace a higher level executive.

Not only will mentoring increase productivity, it will allow you to expand your business without adding more employees. This, of course, leaves you more money for growing your business via strategic planning, marketing analytics, technology, acquisition, or structural/office space, etc.

As an owner of an expanding business you too can tap into the value of mentors. Perhaps you want to grow sales in a new market. A mentor with experience in that arena can shed light on what strategies would be effective and who the “players” are in the industry.

There are many useful resources ready to pair mentors with mentees and visa versa. One helpful organization that matches those in need of mentorship with mentors is SCORE. Its volunteer mentors bring real-world business experience. They are working and retired business owners, executives and managers who have been through the same challenges and decisions that many entrepreneurs face. In addition, SCORE business mentors offer valuable expertise in specific industries.

Engaging pays off. SCORE reports more than 100,000 businesses increased their revenue in 2014 thanks to its mentoring efforts. Those businesspeople with three-plus hours of mentoring not only achieved higher revenue; they experienced an increase in business growth.

Image by The Blue Diamond Gallery

ABL financing tools

Put This Powerful But Overlooked Financing Tool To Work For Your Company

Asset-based lending can be cost-effective, versatile and discreet

ABL financing tools

For some medium-sized companies in a growth phase, cash flow can become an issue when payables get ahead of receivables. For others, there may be opportunities to buy new equipment, to expand business or to acquire new businesses, but there just isn’t enough cash on hand to make a move. Whatever, the reason, there is a flexible, cost-effective and discreet way to finance these occasions. It’s called asset-based lending, or ABL.

Who turns to ABL? Glen Dalzell, Vice-President of Sales and Marketing for Liquid Capital, says that companies who take advantage of ABL are those who may not qualify for traditional bank lending, which is covenant- and ratio-driven. Others may simply not be getting enough funding through conventional bank lending and they need to augment available funds by getting additional availability from their assets.

“ABL is typically a revolving facility,” Dalzell says, “much like a line of credit from a bank.” The difference, he says, is that it’s more flexible and will generate “greater cash availability.” And like a line of credit, you only use as much money as you need, paying back the principal and  interest as you go along.

Long used by very large firms, ABL may have a place in a medium-sized company’s financial toolbox.  “If you took all your cash from receivables and bought equipment with it, you’d have a cash-flow problem,” Dalzell says. ABL can be used to space out that cash-flow shortfall. Firms who have less-than-perfect credit ratings—and there are many understandable reasons why this happens among the very best firms—may also want to turn to ABL.

Corporate assets, including inventory, equipment and real estate, can be considered and margined to raise cash through an ABL facility or you can sell your invoices to a lender. Subject to appraisal, a lender will lend against raw materials, finished goods and even work in progress. Equipment can be margined up to 75% of its liquidation value while real estate can be collateralized up to 75% of its market value. With invoices, a lender “buys” your receivables and when you collect on them you reimburse the lender.

One of the advantages of ABL over other forms of non-traditional lending such as factoring is confidentiality of the relationship between you and the lender. Some clients may question a firm that uses alternative methods such as factoring. With ABL, your receivables are deposited in a sweep account at your bank in your firm’s own name, from which an ABL lender collects its interest and principal payments. The process is invisible to your customers. In addition, with a better credit rating and demonstrable operations processes that the lender can understand and interrogate, your costs for ABL can be lower than with factoring.

Still, asset-based lending is not for everyone. Dalzell says that ABL is generally for medium-sized firms or larger.  “Typically, ABL comprises a minimum of $1 million to $5 million.” Larger firms, he says, have more complex cash needs and the amount of collateral required has to be large enough to warrant the costs of ABL.

successful small business office

How To Set Up Your Office For Success

successful small business office

Whether your business is growing in a commercial space or expanding its production facility, office set up affects your success.

One of the easiest, most economical ways to transform an office is paint. Select the color carefully. The color you choose will impact behavior. Kim Lachance Shandrow, a senior editor for Entrepreneur, writes about the power of color in her article How The Color of Your Office Impacts Productivity. Whites, taupes and grays can appear as blandor too institutional. Shandrow suggests blues and greens to improve efficiency and focus. Go with yellow to boost innovation and creativity.

Ergonomics make a significant difference in productivity as well. British manufacturer CMD creates furniture and lighting/technology solutions for commercial environments. Its blog post Five Facts You Need To Know About Ergonomics explains how correct ergonomics increase worker productivity by 11 percent. A poor set up can cause musculoskeletal injuries, which account for one-third of workday injuries and illnesses.

Choosing office furniture that is adjustable to the individual is a good start. Ideally when sitting at a desk, employees should be eye-level in front of a computer monitor with feet comfortably flat on the floor and arms at a right angle with wrists straight. Another choice: a standing desk, which experts say reduces the risk of diseases such as diabetes and cancer. The simple act of standing can burn an extra 750 calories over five three-hour workdays.

Lighting is another consideration. Andrew Jensen, a business growth and efficiency consultant, writes in his blog post How Office Lighting Affects Productivity that artificial lighting can cause eye strain and headaches. In fact, it is one of the most likely office features to negatively affect motivation.

Jensen explains: “With light being a key component of vision, and vision being responsible for 80 to 85 percent of our perception of the world around us, it’s not difficult to see why ignoring proper lighting strategies in your office could have a significant negative impact on productivity. Harsh lighting and dim lighting are equally detrimental to the productivity of your workers, and, by opting instead for more natural lighting or other lighting systems that have been proven effective, you stand to not only save energy but also increase productivity among your business’s employees.”

Ready to deck out your office? Begin by benchmarking and peek at other companies’ interiors. highlighted the World’s Coolest Offices 2015 last fall, picking winners for offices from large to small. The common denominator: open concept, functionality, communal spaces and touches that inspire creativity.

financial growth

The Secret To Financing Growth

financial growth

Turn your business into a growth powerhouse with one simple insight.

You’ve just received a terrific opportunity: The sale that will take your business to the next level. Nothing in small business is as exhilarating as a sudden growth spurt that comes from a big order. But after the thrill of the deal, how do you deliver the goods without overstretching yourself at the bank? When you make a big sale you’re going to need supplies to complete the order. But you could well run into suppliers who don’t want to risk sending you supplies without getting paid up front. Consider their position—they may be wondering if you can really deliver that big sale, and whether your ultimate customer will pay in a timely manner. They might not be willing to risk selling to you without payment up front.

What can you do to satisfy your suppliers while getting the materials you need to complete your sale to the big customer? One solution that many smart small business operators rely on is purchase-order (PO) financing, and it can be a genuine lifeline at times like this. PO financing can cover up to 100% of the costs of producing goods by paying your suppliers either with a letter of credit against production or payment against bona fide shipping documents. You and your financial institution arrange for inspection of completed goods before payment goes out, protecting you and the financier.

Robert Thompson-So, Vice-President and Chief Strategy Officer at Liquid Capital, says PO financing typically covers two types of deals. One is pre-sold finished goods shipped directly to an end buyer, to a third-party warehouse or shipped and monitored to a client’s warehouse. A second type of deal is to fund works in progress.

You need to understand that PO financing is not a loan, Thompson-So says. “It is essentially an advance on funds to cover suppliers’ bills. A financier agrees to pay your supplier for goods pre-sold to your customer. They then collect the invoice from the end customer and retrieve the moneys advanced you, minus a fee.”

Another benefit is that PO financing doesn’t require a perfect credit history on your part. The financial institution will, however, be vigilant about your ultimate customer’s creditworthiness because that is how it will get repaid. So if you have average credit, you can feel confident about using PO financing.

Even if you’re using PO financing, always be sure to watch your cash cushion. PO financing is no substitute for vigilance over payables and receivables. Run a simulation on what would happen if your customers got behind in their payments—would if affect your ability to attract the kind of big orders PO financing would help you with? Would it hamper your credit rating? Consider electronic invoicing so you can track your payments at all times. This will be important as your business grows with those big orders coming in.