Charter Capital is a non-bank provider of working capital funds and accounts receivable factoring services to small businesses. Commercial bankers regularly refer to Charter Capital their small businesses customers constrained in their ability to qualify for conventional financing. By employing its factoring services, Charter Capital quickly becomes a predictable source of working capital for many such referrals.
The lending and funding problems that have beset retail banking are spreading into small-business banking as well. Overextended on credit lines that often were based on home equity, small businesses are increasingly hard-pressed to service debt in an atmosphere of slowing sales. Working capital, often held in bank deposits, is coming under strain as well.
Shifting into protective mode, banks are ratcheting up the emphasis on credit quality and core funding in their small-business portfolios. And this has created a particular problem for small-business banking officers, who are being redirected from a former bull market for loans to what increasingly is a bear market for deposits.
Problem Solved – Charter Capital provides incentives to small businesses to maintain their deposit relationship with the referring bank. The banker helps the small business establish an alternative source of funding and preserves the deposit business it would otherwise most certainly lose to the competition.