The top firms in terms of estimated annual factoring volume.
As the economy has deteriorated, banks have become increasingly reluctant to provide capital to small or midsize firms — the size of many U.S. apparel manufacturers and designers. Thank goodness for factoring, which keeps many of these businesses afloat. Factoring firms, which advance financing against sales, can be a more accessible source of lending because they are not bound by the banking industry’s financial covenant restrictions. Rather than evaluate the credit worthiness of companies based on net worth, liquidity, cash flow and profitability, factors look for the quality of accounts receivables.
CIT COMMERCIAL FINANCE
1211 Avenue of the Americas
New York, N.Y. 10036
At 90, CIT claims to be the oldest factoring firm the the U.S. CIT’s clients range from small companies with $2 million in annual sales to publicly held corporations with $500 million in sales. The majority have less than $10 million in annual sales.
GMAC COMMERCIAL FINANCE-FACTORING DIVISION
2059 Northlake Parkway
Tucker, Ga. 30084
GMAC’s clients include manufacturers, distributors, retailers and service companies in the aircraft, apparel, automotive, transportation, electronics and grocery industries. Loan facilities range from $5 million to $200 million.
SUNTRUST BANK, ATLANTA
303 Peachtree Street, N.E.
Atlanta, Ga. 30308
$5 billion to $6 billion
Suntrust’s services include credit extensions, accounts receivable management, credit risk outsourcing, which provides protection against credit losses without accounts receivable management, and international factoring. The company is known principally for its work with Southern mills.
CENTURY BUSINESS CREDIT CORP.
119 West 40th Street
New York, N.Y. 10018
Century, a subsidiary of the Foothill Group Inc. and a Wells Fargo company, services firms with annual sales ranging from $5 million to several billion dollars. Century provides credit approval, credit protection, collection and information reporting.
HSBC BUSINESS CREDIT (USA) INC.
425 Fifth Avenue
New York, N.Y. 10018
$4 billion to $5 billion
HSBC, which operates 6,500 offices in 70 countries, provides collection factoring, non-notification factoring and advance factoring, with the ability to obtain secured and unsecured overadvances. There’s also inventory financing and letters of credit.
1799 West Oakland Park Boulevard
Fort Lauderdale, Fla. 33311
Capital is part of the Union Planters Bank group, which has assets of more than $30 billion. Capital has ties to the Apparel Technology & Research Center of California-Polytechnic University in Pomona, Calif. and says that many ATRC graduates that start apparel firms become clients served by its small business division.
GE CAPITAL COMMERCIAL FINANCE INC.
800 Connecticut Avenue
Norwalk, Conn. 06854
$2.5 billionto $3 billion
GE Capital was founded during the height of the Depression, in 1933, as a finance company to help consumers purchase GE appliances. Today, it has $66 billion in receivables. Factoring accounts for a tiny portion of its business, but the company is said to be trying to reestablish itself in the New York manufacturing community.
MILBERG FACTORS INC.
99 Park Avenue
New York, N.Y. 10016
With credit approval/protection, collections, bookkeeping and three different payment options, Milberg says that its clients are able to sell to customers to whom they might not consider selling on their own.
ROSENTHAL & ROSENTHAL INC.
New York, N.Y. 10018
R&R offers a full range of factoring services. Through its Rosenthal Business Credit division, the company provides manufacturers, distributors, retailers and importers unable to secure traditional bank financing with solutions such as customized bridge loans and collateralized loans.
STERLING BANCORP/STERLING NATIONAL BANK650 Fifth Avenue
New York, N.Y. 10019
In addition to traditional factoring, Sterling, which specializes in small to midsize companies, has a hybrid service that provides advances against sales and receivable management services without credit protection; borrowings are capped only by receivables growth. Apparel and soft-goods firms account for 75 percent of Sterling’s portfolio.
359 Fifth Avenue
New York, N.Y. 10018
$250 million to $500 million
A division of the Israel Discount Bank, IDB Factors specializes in midsize apparel, accessories, textiles, electronics, jewelry, food and commodities companies based in New York. Asset-based lending is at the heart of the company’s business and it is one of the few to offer facilities as low as $1million.
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