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Contact:
Pieter van Tulder
Phone: 203-424-3849 Fax: 888-501-7379
Email:
[email protected]
A Victim of his own success
By Pieter van Tulder
This is a scenario we hear many times every week from our potential clients. The story goes
something like this.
“I started my own business about 18 months ago. It was fairly slow going at first, but in the last 7
or 8 months business has really picked up.
Initially I used my savings to finance the start-up, and subsequently I have ‘raided’ my pension
fund that I had built up while working for someone else prior to opening my own business. What
I’m seeing is that as my business grows it needs more working capital to constantly fuel that
growth.
Recently I have even resorted to financing some business purchases with credit cards, and now
I find that I have some permanent credit card debt. I was somewhat reluctant to call my bank for
help, as I didn’t know what sort of reception I would receive. In the end I made the call only to
find out that I didn’t really qualify for any programs - seems that I don’t have enough track record
and naturally my financials don’t meet the bank’s criteria at this point in time. They suggested
that I slow down my expansion plans, reject some of the order, and basically plateau out my
business at a lower level.
They did suggest that most banks would take the same position as theirs and that I should
explore the secondary finance marketplace. They talked about such things as factoring,
purchase order financing, invoice discounting and venture capital. I don’t know too much about
any of these areas, so I did the research and found out that I’m too small for the factoring
companies that I contacted. My business, it seems, is not well suited to using purchase order
finance as a growth approach.
The venture capital people that I spoke to all wanted a business plan, several years’ financial
statements, cash flow projects and more - none of which I had. For me, it turned out that invoice
discounting - a service that I had never heard of - was the only viable solution.”
That’s how many of our clients arrive on our doorstep - either through patient research or
because their bank recognized their need and our ability to help, and made the introduction.
Invoice discounting allows growing companies the luxury of, basically, turning their business into
a ‘cash-on-delivery’ business. Once the cash flow is accelerated, the growth of the business can
easily be handled and financed.
In the current economy, most small and medium-sized businesses will become victims of their
own success. They can create the product or service, they deliver it but as the order book
grows, they can’t finance the growth and either have to slow down or go out of business.
With services such as invoice discounting there are options to help small businesses climb to
the next plateau.
Pieter van Tulder is Senior Partner of The Interface Financial Group in Riverside, CT, a provider of invoice
discounting services. For more information, call 203-424-3849 or email Pieter at
[email protected], or go to our website www.interfacefinancial.com
For Immediate Release Current Date