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Flexible financing helped SiSTEM Tutoring’s regional and national expansion.

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Phenomenal growth has marked the past year for the SiSTEM Tutoring Agency, founded by Pearl Ubaru. 

Once exclusively focused on private, one-on-one instruction, SiSTEM Tutoring saw an opportunity to grow and began landing large school board tutoring contracts across Texas.

But with government contracts came invoice payments set at net 30 days. Since SiSTEM pays its tutors weekly, Pearl faced a significant gap in working capital that threatened to limit growth and her ability to hire best-in-class tutors.

With Liquid Capital’s invoice factoring solution, SiSTEM has the cash flow to meet payroll on time, remain competitive in the industry, and begin taking the business nationwide.

Laying the groundwork for future generations

SiSTEM Tutoring Services — which stands for Students in STEM (Science, Technology, Engineering and Mathematics) — was established in 2019 as a private in-home tutoring company. They offer online and in-person tutoring and test prep in science, math, English and foreign languages by qualified teachers and graduate students.

When the pandemic increased the need for tutoring services, and local governments began funding school-based tutoring, founder Pearl Ubaru saw an opportunity she couldn’t pass up. She decided to make a move beyond private tutoring, pivoted her company in a new direction and quickly scaled her business. 

In late 2022, she doubled-down on marketing her company’s tutoring services to larger school boards by launching the Campus Immersion Program.

Her efforts were successful, quickly winning bids to partner with several school board clients.  SiSTEM began sending tutors to K-12 schools across Texas, including the Houston Independent School District (HISD) and the Fort Worth Independent School District.

While the move into school-based tutoring was an exciting development for SiSTEM, large, government clients like school districts have vendor payment terms set in stone. In the case of Pearl’s clients, most invoices were paid in net 30 days.

“We hit the ground running for the spring semester in January and we had all these tutors and contracts,” explains Valarie Grant, Chief of Staff at SiSTEM. “Then we ran into problems with our invoices not being paid fast enough for us to pay our tutors weekly.”

SiSTEM maintains a strict weekly payroll and pays an above market rate to remain competitive and recruit high-calibre tutors. But while the business was expanding and thriving, the gap between payroll and the contracts’ monthly payment structure created cash flow concerns for Pearl, Valarie and SiSTEM.

“Pearl had an opportunity to do a lot with HISD (Houston Independent School District). She recognized that she needed some sort of solution to accelerate her cash flow so she could take care of payroll.”

– Liquid Capital

The invoice factoring difference

Cash flow gaps can have wide-reaching effects on a company, filtering down through the organization. And for SiSTEM Tutoring, the mismatch between a school district’s invoice payment and the company’s payroll meant that Pearl needed a more reliable solution to attract and retain the best tutors.

Pearl’s options to increase her cash flow were self-funding the payroll gap through her own earnings and savings, taking out loans, leveraging high-interest credit cards or applying for grants. Her business did win several grants, but with an increasing number of tutors to pay, this model was unsustainable to fund the growing payroll.

“We could have received loans and things of that nature, but we just felt like we didn’t really need a loan per se. We just needed quick access to the money that we’ve earned through our services.”

– Pearl Ubaru, Founder, SiSTEM Tutoring

Through a contact, Valarie heard about invoice factoring. Neither she nor Pearl had ever factored invoices before. After evaluating the process and several providers, the benefits of invoice factoring were attractive. Liquid Capital offered a particularly friendly, hands-on, transparent approach where all expectations were laid out upfront.

The Liquid Capital team was available to walk SiSTEM through the process, answer questions as needed, and offer additional support, including recommendations on record keeping, organizing payments and contract terms.

“I selected Liquid Capital because of how they work and the people behind them. After meeting the Liquid Capital Principal and hearing his thoughts and appreciation for what we do, it was a pretty easy ‘yes’ from me,” explains Pearl.

Scaling the business with healthy cash flow

Within two weeks of submitting her application with Liquid Capital, Pearl was able to pay tutors regularly and fund back-end operating expenses such as payroll systems, subscriptions to video conferencing tools and internal payroll.

“All of those things cost money, so thinking about that was a bit stressful. Working with Liquid Capital really did alleviate that stress and it did make a positive difference for sure. It really allowed us breathing room,” says Pearl.

Between March and June 2023, SiSTEM factored more than $400,000 in invoices. Since the spring, they have taken on tutoring contracts with at least 15 independent school districts and two charter schools in Texas. SiSTEM is also part of a co-operative that provides tutoring to different organizations and institutions nationwide.

“Now that SiSTEM has the capital, it’s really just a function of getting the contracts,” says Liquid Capital. “Pearl is doing really well, the school districts really like her, so she’ll get opportunities. Then she just needs to be able to hire people and pay them. Now she has the ability to pay them, we’ve removed a critical block to her growth, without a doubt,” he adds.

“Even though we have an impactful vision and mission, money speaks — us paying tutors weekly, us paying them an above-market rate, really does allow us to bring in the best of the best.”

– Pearl Ubaru, Founder, SiSTEM Tutoring

Ready to grow in Texas and beyond

For Pearl, securing more than a dozen contracts in early 2023 was just the beginning. The team is looking beyond the Greater Houston area — expanding the company’s reach to the City of Houston and states ranging from Rhode Island to New Mexico.

Looking back, Pearl sees her partnership with Liquid Capital as a key opportunity that has ensured her company’s survival and allowed it to prosper and expand.

“I think the biggest thing is always going to be funding, no matter what, so if you can find a way to always have access to funds, that’s really what will make your business thrive,” says Pearl. “Liquid Capital are personable people and I feel like they definitely understand.”

Up next: Serna’s Trucking: Driving results within the construction industry

Discover how Global Aviation leveraged invoice factoring to reach new heights of business success with the help of Liquid Capital.

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You’ve likely experienced Global Aviation’s exceptional service from one of their customer service agents at one of the many North American airports they service.

Since its inception in 2009, Global Aviation has committed itself to providing high-quality airline staffing services for PAX (passenger, baggage and load control), cabin cleaning, aircraft detailing, ramp handling and mobility assistance. And with the help of Liquid Capital, the company has swiftly evolved into a top competitor in the industry. 

However, when business really took off in 2016, Global Aviation sought additional financing. At first, the bank was able to provide enough funding, but as new heights of success were reached, so was the need for additional cash flow—which the bank could not provide.

Like emergency oxygen masks on an airplane, Liquid Capital has been there when Global Aviation hit funding turbulence, ensuring a soft landing by accessing $40 million since 2016 through invoice factoring, and ultimately helping them become bankable. Now, Global Aviation is ready for takeoff again in a post-pandemic world.

Unlocking the secret to funding business growth

While Global Aviation was able to withstand the cash flow crunch in its first few years—and even experienced modest growth—by July 2016 the company realized it needed additional financing if it hoped to achieve its growth objectives. At that point, its main funding option was self-financing, which was not an ideal situation for Carm Borg, President and CEO of Global Aviation. 

“In this business, 90 percent of our costs are people-related. We have to make payroll every two weeks, but airlines only pay every 30 days,” says Carm, whose company offers a wide range of staffing services to airlines at airports across North America. “When you’re just starting out and ramping up quickly, it doesn’t take long to run into cash flow issues.” 

After a business associate recommended Liquid Capital to Carm, he knew there was another way to discreetly gain access to the working capital he needed to continue the flight path to business success that the company was on.

“Non-notification was a service not many factoring companies were offering—and it was a huge selling point for us. That, combined with the fact that Liquid Capital allowed us to get our money quickly and cleared us to get paid faster, made the decision to go with them a no-brainer.”

Carm Borg, President and CEO of Global Aviation

The company entered a unique alternative funding arrangement with Liquid Capital that gave it access to more than $40 million in working capital funding over the following years—money that was primarily used to make payroll every two weeks. Unlike the line of credit that Global Aviation had through the bank, which was capped at $1.5 million, Liquid Capital provided funding against the company’s $4 million in monthly invoices and its equipment. 

With the combination of invoice factoring and equipment financing/asset-based lending (ABL), the company was able to access the working capital it needed to keep growing. Understanding the need for discretion, Liquid Capital offered Carm the option of a non-notification factoring arrangement. In these kinds of arrangements, Liquid Capital operates in the background rather than collecting receivables directly. 

This arrangement allowed the company to grow in Canada and the U.S. from approximately 550 employees in 2016 to a whopping 2,500 in 2018—and from 20 airline contracts to 55.

With the help of Liquid Capital, Global Aviation swiftly evolved into a top competitor in the airline staffing industry. As it continued to land new contracts, the company also planned to add new people—between 800 and 1,000 and grew its annual revenue from $6 million to $12 million. Because the company could now prove three years’ worth of strong financials, it could make this move forward with a newly obtained traditional bank line by the middle of 2018.

New altitudes mean new funding needs

However, by 2019, the company had once again doubled its revenues to over $24 million and its new bank line was unable to handle the rapid growth. So, in October 2019, Global Aviation returned to Liquid Capital and once again leveraged invoice factoring and ABL to help fund their upwards trajectory. “They gave me the ability to grow the business twice as fast,” says Borg.

On track to bring in $70 to 80 million by the end of 2020, Global Aviation continued winning awards and contracts, adding new employees almost weekly. “We were basically doubling our growth every year, continuously, and 2020 was going to be our best year yet,” says Borg. 

Then, on March 23, 2020, about six months into its new arrangement with Liquid Capital, air travel came to a standstill as COVID-19 swept across the world.

While the pandemic affected every industry, it hit the aviation sector particularly hard. “We went to a bare-bones skeleton staff because there was minimal flight activity. It was basically survival mode,” says Borg. “Our goal at that time was to pay down our outstanding balance as receivables came in.”

“There’s a lot of financial crash and burns going on right now, but this allowed us to come in for a soft landing. Liquid Capital was instrumental in listening to us and coming up with a game plan on how we could repay our facility balance and right side the operations.”

Carm Borg, President and CEO of Global Aviation

Ready for takeoff when travel takes flight

Global Aviation has now weathered the pandemic storm and qualified for bank financing and government support so will be leaving Liquid Capital once again. “I’m sad to leave Liquid Capital, but we’ve survived the worst of the pandemic and are ready to stand on our own again,” says Borg.

When the world starts to travel again, and when the aviation industry takes flight once more, Global Aviation is well-positioned to continue its previous growth trajectory with the expertise, equipment and facilities ready for takeoff.

“The banks want three to five solid years of history, whereas factoring will base their funding solutions off of your current book of business. I’d definitely recommend the team at Liquid Capital—they’re very responsive, transparent and client-focused. You’ll always know exactly where every dollar is spent.”

Carm Borg, President and CEO of Global Aviation

Up next: Learn how a tree clearing company funded its growth and found a trusted business advisor by working with Liquid Capital.

Learn how Best Broadcast was able to save money and grow their business with the help of their local Liquid Capital Principal. 

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Best Broadcast is a thriving audiovisual company with a strong technical team and fast-growing business. Along their business journey, they have generated a lot of accounts receivables (ARs), but have sometimes had slow-paying customers, which has created cash flow shortages.

Since partnering with Liquid Capital, they’ve been able to leverage invoice factoring to consistently inject capital into their business that would have otherwise been tied-up elsewhere. This has allowed Dave Kip, CEO of Best Broadcast, to run his company with less stress — and focus his attention on growing his business.

With a reliable alternative financing solution in place, Dave now has access to the funds he needs to grow his business and no longer has to worry about cash flow to address operational expenses. Due to its affordability and easy access, he advises other business owners to consider invoice factoring when looking to improve their working capital.

“Positive cash flow in my industry has always been extremely important because it eliminates unwanted stress that can come with staffing and managing the day-to-day operations. Having a reliable cash flow allows me to focus my attention on growth opportunities.”
Dave Kip, CEO of Best Broadcast

The backstory: Bursting out of the starting gate

In the spring of 2008, Dave Kip had the exclusive opportunity to work on a major project that would garner a lot of media coverage, and would be the launching point for his broadcast systems engineering and consulting firm, Best Broadcast.

He was asked to build the groundbreaking CityTV Dundas Square station in Toronto, Ontario. With a successful launch putting him in the spotlight, Dave found his phone ringing off the hook with even further business opportunities to work with major companies such as Rogers. In just two short years, he grew from a one-man shop to a team with seven full-time staff.

In 2014, the stage was set for tremendous growth. Best Broadcast purchased an integration company and doubled their headcount, allowing them to provide an end-to-end solution for TV stations including AMI, CBC, TVO, Bell, and even clients as far away as in Trinidad. In 2016, the evolution rapidly continued, branching off into the audiovisual industry with 40+ employees. Best Broadcast was now a dominant player supporting large AV companies such as Samsung, supplying technical manpower that would allow their clients to focus on sales without having to worry about project delivery.

The business was booming, and positive cash flow became increasingly important. But with all this success came challenges that every business owner will face at each growth step. Best Broadcast needed to access more reliable working capital to manage day-to-day operational demands and keep the momentum going.

The issue: Overcoming cash flow challenges with a brilliant solution

While Best Broadcast was a thriving business, occasionally there would be a slow month where finances would be tight. Every business owner can relate to this cash flow problem in their own growth journey. To increase cash flow, Dave started offering clients a five percent discount if they paid their bill in full within 15 days. But this heavy discount was eating into his bottom line.

Fortunately, because the Best Broadcast billing process generated a lot of accounts receivables (ARs), a solution was right under their nose. When he was introduced to Liquid Capital, he realized he could change his approach, speed up his incoming cash flow and save money.

In many cases, when Best Broadcast sends technicians out on the field, they’re on the job for a couple of weeks before a first bill gets sent out to their client. Because they invoice on a net 45-day term, incoming cash flow can slow down. That means they can be waiting for a minimum of 60 days from when they start a job to get paid.

Dave often found that he had hundreds of thousands of dollars tied up in ARs and limited cash in the bank. With the majority of his funds not immediately accessible, he could not see how to keep growing the business.

The solution: Finding immediate cash flow relief

The solution was invoice factoring, and Dave learned it could alleviate his day-to-day working capital problems.

His Office Manager Barbara, who had been with the company since 2015, also took the time alongside Dave to understand and evaluate how invoice factoring could work for them. Together, with their Liquid Capital advisor’s strategic guidance, they were able to forecast the potential savings and financial improvements of this smart lending solution.

“Once we calculated the difference between what we were offering clients for early payment discounts, getting private loans or even dipping into our bank overdraft, it became a no-brainer to use invoice factoring,” Dave explained. “If other companies are offering early payment discounts, then you should consider factoring as a real option. I had always assumed that it would cost much more, but when looking at the calculations, invoice factoring was a much cheaper option.”

When they started using invoice factoring, Best Broadcast immediately saw a world of a difference in their cash flow. With Liquid Capital they now had access to the funds they needed so Dave no longer had to worry about day-to-day operational costs.

“Liquid Capital allows me to operate without stress. If a company is offering early payment discounts, factoring is a cheaper option to gain access to money.”

Dave Kip, CEO of Best Broadcast

The solution continues to help Dave evolve the business and increase their cash flow. Liquid Capital not only provides funding to reduce stress for Dave, Barbara and their team, but is building a lasting relationship they can count on. Their Liquid Capital Principal regularly checks-in with them and is available to discuss matters not just related to funding, but also strategic business moves.

By understanding his industry and unique challenges, the tailored advice from Liquid Capital gives Dave the financial assurance to take on new opportunities.

“Liquid Capital is more than just a source of money. My Principal calls regularly, gives me his perspective and shows me my financial trends so we can discuss what next steps make sense for my business.”

Dave Kip, CEO of Best Broadcast

A bright future ahead

Looking forward, the next couple of years could be an exciting era for the company. Dave has eyes on new industries to add to Best Broadcast’s lineup — including the remote working space, which will no doubt bring next-level business priorities for many clients. He also has plans to open a technical school that would provide formal training to AV technicians, with the goal of introducing more qualified technicians into the workforce.
As the Best Broadcast strategy evolves, Liquid Capital will be proudly by Dave’s side as a funding source and cheer him on as a business partner.

“The next time I need money, the first person I’m calling is my Liquid Capital Principal.”

Dave Kip, CEO of Best Broadcast

Up Next: How this trucking company was put on the road to success with both funding and strategic business advice.

The good fight

Archye Leacock was a professor of political science at Temple University in Philadelphia when he first came up with the idea for the Institute for the Development of African American Youth (IDAAY).

The native Trinidadian, who also earned his PhD at Temple, was dismayed by the low number of at-risk youth in his classroom—youth who, in his opinion, were being neglected by the system. When he looked a little further, he realized his students weren’t isolated cases. The local communities surrounding the university campus were full of kids who were doing what they needed to survive in the city’s rough neighborhoods—and suffering as a result.

Archye wanted to show kids another path, so he started an SAT prep course on the weekends in his spare time.

“We were responding to the needs of young people and their parents who weren’t getting the proper support. They needed to learn how to read and do math,” he says. “So I decided to serve these young people and educate them—and their parents too.”

In 1991, IDAAY was officially born and, over the years, it’s grown tremendously to include innovative new programs. The Intensive In-Home Supervision Program, for instance, works with young people who have been arrested and teaches them how to avoid negative repeat behaviors. Young Fathers United offers workshops to help young men learn about their family history, family trends, basic health and childcare. And, of course, there’s the Main College-Bound Program which helps prepare youth, between the ages of 10-18, for college.

“Many young people believe that the only way to survive in the ‘hood is to be ‘strapped’ (or carry a gun). We focus on teaching them different ways.”

~ Archye Leacock, Executive Director, IDAAY

Cash crunched

Not only is the work “heavy”, according to Archye—two local youth were recently shot at the time of writing, and others are sitting on death row—but it’s often made more difficult due to lack of cash. While the organization is funded by city and state grants, including contracts through Health and Human Services of the City of Philadelphia, timely payment is a challenge.

“When you get a contract, you only invoice at the end of month and then you aren’t paid for another 90 days. So, it typically takes four months after we’ve performed a service before we’re paid,” he says, adding that the organization isn’t paid at all during the contract’s renegotiation period, which takes place over three months every summer. “We’re a non-profit—and we ain’t rich. So, for a while there, we were scrambling.”

“We were collecting donations, but still coming up short on payroll, rent and insurance—the three critical items you need if you want a good program.”

~ Archye Leacock, Executive Director, IDAAY

In 2012, the program had grown large enough that the funding shortage was a substantial problem. Archye explored getting a line of credit with the bank, raising debt, merging with another agency, but nothing worked out. Finally, the board president of IDAAY knew of someone at his church who knew someone at Liquid Capital and suggested a meeting.

Beacon of hope

When Archye sat down for dinner to meet with Liquid Capital, they already knew about the amazing things IDAAY was doing for the community—and they believed in the organization. More importantly, Liquid Capital said they could help.

Shortly after their meeting, IDAAY entered a factoring arrangement with Liquid Capital. The way it works is relatively straightforward: After the organization provides services to clients, IDAAY bills Health and Human Services and sends the invoice to Liquid Capital. Liquid Capital then wires IDAAY the funds and, when IDAAY is repaid by the city, it pays Liquid Capital back. During the summer renegotiation period, Liquid Capital advances the funds and is paid back months later.

It’s not a typical commercial arrangement—and there’s a lot of trust involved—but after years of trial and error, both Liquid Capital and IDAAY believe they’ve found an arrangement that works. IDAAY’s tremendous growth and success since 2012 seems to prove it.

“Because of Liquid Capital, we’ve been able to run more programs, especially our intensive in-home monitoring program. We couldn’t have served this constituency at all if we weren’t able to normalize cash flow,” Archye says.

The factoring arrangement allows IDAAY to pay for the insurance it needs to qualify for government funding—an expense that often lands between $60,000 and $70,000 per year. It’s also used to pay for the additional 11 staff needed to run and grow its truancy program (which Archye estimates has allowed the organization to serve an additional 200 people thanks to Liquid Capital’s help).

«When I’m in a crunch, Liquid Capital comes through. Recently we needed money wired to our account on a Friday but we didn’t communicate that properly. However, I was sending 50 young people to an event sponsored by Microsoft on Saturday and we needed the funds to make that happen. My Liquid Capital Principal literally drove down to pay for the lunch, pay for buses. I had no money but they made it happen and I returned the funds to him once I received the wired money. I can’t say how critical that was.”

~ Archye Leacock, Executive Director, IDAAY

A promising future

What Archye finds most valuable, however, is the ongoing support provided by Liquid Capital and the peace of mind the factoring arrangement brings. After going blind at the age of 14, running the non-profit has been anything but easy. But knowing the financial side of things is taken care of has allowed him to keep persevering—which he believes is important for the community as well.

“It’s good for people to see a disabled person not only run an organization like this, but thrive. As long as I have the opportunity to help, and the necessary support, I think we can make a real contribution.”

~ Archye Leacock, Executive Director, IDAAY

IDAAY has already been honored with the 2018 International Men’s Day Lt Henry Mentorship Award and the GSK Impact Award—which has, in turn, won the attention of other organizations across the country interested in learning from the non-profit. It’s also working toward applying for additional federal grants. And thanks to the success of IDAAY, Archye has also raised his community profile—and is working toward a run for public office, which he believes will allow him to make a true difference.

“Liquid Capital has given us the courage to move forward and build our program. Money is needed for everything—and the company has been an enormous help. It’s not just a resource. Unlike the banks, Liquid Capital actually cares. They work hard to build a relationship.”