Anchor Funding Services, LLC

Anchor Funding Services Provides Purchase Order Financing

2010-01-21T00:00:00-04:00

What is Purchase Order Finance? It is very common for businesses to have orders from creditworthy customers but they do not have the funds to pay suppliers to fill the orders. When a business finds itself in this position, it can be in danger of losing the orders and the potential profit they represent. Worse yet is the potential loss of any future orders from that customer. Anchor will provide the money to fill these orders based on certain criteria. AFS has simple criteria for funding PO Transactions: *Management Expertise and Proven Products AFS will finance companies with proven expertise in their field, and products that have been tested *Dependable Sourcing AFS will fund transactions with suppliers who have records of dependability *Valid, Non-cancelable Purchase Orders AFS will fund based upon non-cancelable, valid purchase orders issued by creditworthy companies. Consignment transactions are not funded. AFS will fund by making direct payments to third party suppliers or the posting of Letters of Credit by AFS on behalf of its client. Purchase Order Financing is available to virtually all industry segments, with the exception of construction. For more information, please call one of our financing professionals at (866) 950 ? 6669.

The Fight To Survive, Writ Small. New York Times, December 18, 2008

2009-01-09T00:00:00-04:00

By MICKEY MEECE Published: December 17, 2008 Hoss Boyd, owner of an electrical contracting and solar energy installation company in Texas, was on the road at 3:30 a.m. the other day on business ? but not the usual kind. He was looking for the $48,000 that a contractor owed him so he could make payroll.

The check, it turned out, had been sent overnight. Even though his trip was for naught, he was relieved, he said. ?That gave us some breathing room.?

It was another stomach-churning moment for another small business trying to stay afloat as lenders hoard cash and customers take longer to pay their bills.

Even companies like Mr. Boyd?s, Premier CIRE Systems in New Braunfels, Tex., whose products and services are in demand, are being ensnared in the deepening recession. And while their troubles are not as apparent as those at the Big Three auto companies, for example, small businesses are in a daily fight for survival just the same.

In a way, said Ed Lette, chairman of the Business Bank of Texas in Austin, small businesses today are ?paying for the sins of bankers? who had ?very loose underwriting? and prices that were too low. Now bankers are returning to tried-and-true rules that they had abandoned: requiring 20 percent down, enforcing stricter underwriting.

That is why small businesses are being turned away, Mr. Lette said; they cannot meet those basic requirements. ?Our banking sins are coming back to roost.?

And that is why the Federal Reserve, for all its rapid interest rate cuts, and the Treasury Department have not been able to thaw the credit freeze. In a nod to those tight lending conditions, the Federal Reserve has indicated that it will start a program early next year to ease credit for households and small businesses.

Raymond J. Keating, chief economist with the Small Business and Entrepreneurship Council, a nonprofit advocacy group, argued that any recovery needed to bring along small businesses. ?This is where the real economic action is,? he said.

Some 60 to 80 percent of new jobs come from small businesses, Mr. Keating said, and more than 50 percent of private sector gross domestic product is created by small business. While big banks and automakers have the resources to demand attention to their woes, small businesses, he said, are ?lost in this equation.?

Behind the scenes are entrepreneurs like Mr. Boyd, whose first name is James. He has survived other recessions and knows he has to be proactive about finding fresh financing. To that end, he has been pounding the pavement and working the phones with lenders for months, but almost every one has turned him down.

Credit card companies approved lines of credit, he said, but now he is behind on those payments and faces repayment at 29.99 percent interest.

He knows he is not alone in the daily quest for receivables ? money due his company. ?I got a call today from our print shop. We owe them $400 to $500 for blueprints.? It was the company owner on the line making collection calls, Mr. Boyd said, adding, ?I would venture to say he?s waiting on invoices, too.?

In a one-time survey of 751 businesses with fewer than 10 employees in October, Intuit found that owners averaged $1,500 in overdue customer payments each month. With 22 million businesses of that size, the overdue payments add up to a strain of $33 billion in cash flow.

And while the government has been the lender of last resort to the big banks, small-business owners have no backstop. Even big asset-backed lenders are retreating, said Sam Thacker, a partner with Business Finance Solutions in Austin who has been working on behalf of Mr. Boyd.

There is one avenue of financing readily available ? lenders known as factors, which will extend financing based on money due the company, but they keep a piece of the money collected. And there is a catch. The small and medium-size businesses that are clients of factors must sell goods or services to other businesses, not to consumers.

Business at one such lender, Anchor Funding Services, has tripled in three months, according to Morry Rubin, its chairman and chief executive.

While traditional lenders began tightening credit six months ago, he said, the situation became urgent ?about 90 days ago, as credit deterioration and availability hit catastrophic levels.?

Anchor?s customers are saying that their clients who paid within 15 days are now extending to 30 days, he said. Those who paid in 30 days are well past 60. ?Many of our clients are facing receivables that have aged to more than 90 days,? he said.

Here is how it works: Anchor buys the receivable from a small business and immediately advances a portion of the total, normally 75 to 85 percent. Anchor collects the debt and returns the rest of the money owed to the small business, less a fee of 1 to 5 percent.

Recently, for example, Anchor advanced a truck company $1 million in six business days, Mr. Rubin said.

There are hundreds of factors like Anchor, according to the International Factoring Association. Mr. Rubin said he expected business to be robust for the foreseeable future, ?given that the crisis was not created in one day ? it will take time to heal.?

Not everyone has access to lenders like Anchor, however, Mr. Thacker said.

The Texas Store in Austin, which sells Texas and University of Texas-related items, for example, does not fit the criteria because its customers are consumers, so it has had to look elsewhere for cash.

Richard Horn, an owner, said he and his partner had been in ?lockdown mode? these last few months as they reached the limit of their bank credit line.

When the bank turned them down for an extension, Mr. Horn said, he was forced to pay bills on his own credit cards. He and his co-owner, Bill Mathews, are ordering just the items they are sure will sell in their two mall stores, like ?Don?t Mess With Texas? bumper stickers and ?Keep Austin Weird? shirts and hats, while delaying payments as long as they can.

?I do the cash flow statements,? said Mr. Horn, who bought the business 21 years ago. ?It can wake me up at 3 o?clock in the morning because I?ve never quite been here before.?

Mr. Thacker, a business adviser to the Texas Store and a finance and credit expert for Allbusiness.com, started a crisis management plan for the owners this fall with hopes of a turnaround in 2009 and a push to expand the online store (www.texasstore-austin.com).

?I have seen some tough cycles, but I?ve never seen owners of businesses as scared as they are now,? Mr. Thacker said. ?Across the board, very few small-business owners I talk to are optimistic ? all they can see is the short-term lack of credit.?

Mr. Boyd at Premier CIRE Systems has managed to hang on. He has cut his work force to just five, from 17 last year, and got a small line of credit last week that was enough to pay the rent and keep the lights on.

But, he said, ?I was told today that a new supplier won?t back our contracts.? In addition to the company?s recent history of slower payments, he said, the general contractor it uses, which has been in business for 23 years, has been flagged for paying slower.

?We?re on the mend,? Mr. Boyd said, ?but we have a long ways to go yet.?

A version of this article appeared in print on December 18, 2008, on page B1 of the New York edition.

Accounts Receivable Financing (Factoring) Gaining in Popularity

2008-11-11T00:00:00-04:00

Boca Raton, Fla., - With roots dating back more than 200 years, accounts receivable financing, or factoring, is quickly becoming the new trend in business financing. In fact, at one South Florida factoring firm, business and inquiries have tripled in the last few months. Anchor Funding Services finances businesses all over the country, from small startup companies to those firms with up to $25 million in annual revenues.

With today?s economic downturn and struggling financial markets, bank financing is tougher to come by. Not only that, if approved by a bank, funding can take 60 days or longer until the money is received. An excellent alternative financing source called factoring permits the business owner to convert its accounts receivable into immediate cash to fund its operations. The factor can provide cash to its client in less than five days and usually advances as much as 90-95% up front, with the remaining 5% balance minus its fees, after the invoices have been collected.

?We?ve seen a dramatic increase in interest for our services,? says Brad Bernstein, president of Anchor Funding Services. ?Many people hear factoring and automatically think of the apparel and textile districts in New York City where factoring first became so popular. The fact is, today we are providing Accounts Receivable funding to companies in many different sectors including staffing firms, IT companies, consultants, telecom, distributors, manufacturers, wholesalers and oil and gas companies.?

In addition to receiving money quickly, the flexibility and ease of factoring is also attracting many companies to this alternative form of financing. There is much less paperwork than with a bank loan, and no credit checks, as a factor is only concerned with the credit-worthiness of the accounts receivable. Anchor Fundings unique scoring system, CreditGuard ? evaluates the collectability of the accounts receivable and in several cases, Anchor Funding has advised its clients not to do business with certain firms due to the potential risk of nonpayment.

To grow a small business, companies need continued sources of working capital. Waiting 30- 120+ days for payment of invoices or to obtain traditional bank financing can take too long. Utilizing factoring, companies are able to get the money they need rapidly, without the requirement of pledging personal collateral and preventing the interruption of the business operation.

About Anchor Funding Services Anchor Funding Services maintains offices in Boca Raton, Fla., and Charlotte, N.C., provides Accounts Receivable Funding and Factoring Services to small and medium sized businesses. With Low Funding Rate, No upfront fees and fast approval. The company also operates Truckerfunds.com (www.truckerfunds.com) which is the freight factoring division of Anchor Funding Services.

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MEDIA CONTACT:
Bruce Serbin
Reeves Laverdure PR
bserbin@reeespr.com
(561) 391-8717

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One of Our Transactions: Anchor provides funding arrangement for IT Staffing Firm.

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