CADENCE for A/R Finance and Blended Collaterals
CADENCE provides robust A/R Finance and Daily Rate Finance management...
The Problem:
A struggling A/R Finance lender was managing a large factoring portfolio. They had been buying receivables for over 20 years. They were experts at qualifying business and making purchase decisions on individual invoices. They specialized in working with start-ups and fast growing businesses by providing much needed cash flow.
Often, as their borrower’s businesses grew stronger and more profitable, over time, they would begin to search for alternate, less intrusive financial strategies for their cash flow needs. As businesses grew and matured, the factor would ultimately lose these customers to competitive ABL lenders. Despite knowing more about the borrower’s business than any other lender, the factor lost them because of the inability to offer alternative products.
The Solution:
CADENCE is a portfolio management solution that allows lenders the flexibility to blend products and keep business relationships longer as businesses grow and become stronger and more profitable. The main element is ability to shift the relationship from one product type to another in a seamless transition that implements the controls and pricing strategies that meet the current market conditions and borrower’s business needs. With CADENCE, these lending products are offered on a single lending platform that satisfies all product needs without transferring from one system to another or requiring that special lending accommodations be managed off system.
With CADENCE the lender has the tools to start their client’s off with the appropriate lending product and move their clients along a spectrum of lending strategies that match the level of control with the current risk and pricing which provides the most efficient and competitive lending structure.
After implementing CADENCE, the lender was capable of starting a components manufacturing firm off in a factoring facility then transitioning them to a traditional line of credit in just under two years. The client continued to grow, and last month, the lender offered additional term financing for the purchase of equipment. The lender is currently working on additional financing to help fund new growth opportunities. The strategy with this client was so successful that the lender is now offering a structured program to benefit other clients in the same way.
