Small Business Factors...A Bit Closer to Their Clients

Everyone knows that starting a small business is a financial challenge.  Many times, a small business will have to wait months or years before realizing a profit.  Growth requires cash flow and most small businesses lack the financing required to help manage their cash flow.  A bank will not normally give loans to a business that it does not deem creditworthy based on an stringent set of requirements.  Although invoice factoring can provide a small but promising business with instant cash flow, large national factoring companies can also be a bit restrictive and inflexible.

Factoring companies like Charter Capital remain focused on the small to mid-sized business (SMB) market in contrast to what banks and some of the big national factoring firms do.  Our industry segment can be described a Small Business Factoring or Community-Based Factoring.

Besides being more flexible than the rest of the commercial lending industry, small business factors have many attractive features. Here are just a few:
 

• Customers are small or start-up companies
• Small business factors tend to be small companies too
• Small business factors do business in their own communities
• Small business factors are more in tune to the local economy
• Small business factoring companies tend to provide more service to their customers
• Small business factors often take on deals that national factoring firms and banks are not equipped to handle well.

The consolidation of the financial industry has left many more small to medium sized companies (SMBs) with fewer financing options.  As more mid sized factors and banks merge with bigger institutions, the small to mid-sized business segment becomes more underserved.  This is largely due to their size alone as large financing companies, and banks tend to loose their flexibility as they grow larger.  Whereas small business factors usually have a great degree of flexibility, both financially and operationally, usually giving personal attention to their client's needs.

Small Business Factors like Charter Capital that remain flexible and are able to take a "hands on" approach with regard to their clients, will continue to fund successful start-ups and small businesses.  "Flexibility" and "service" tend to be core principles with Small Business Factors, and are sometime lost with banks and large factoring firms.