Industry Focus Finance: How Will Mergers in the Factoring Business Affect Clothing Manufacturers?
By Deborah Belgum - Thursday, July 30, 2015
With the recent mergers and acquisitions between banks and factors, how do you expect this to affect the factoring business? Will it make it more difficult or more expensive for manufacturers to get factored?
When a bank owns a factor, bank regulation can dictate what deals can get approved or not. Decisions are not necessarily based on the collateral or the people, which are two very important criteria for factoring and lending money.
As an independent factoring and finance company, Rosenthal & Rosenthal looks at the totality of the deal—not just the balance sheet and not just the profit and loss. We also take into account the story behind the deal, the people behind the deal and the performance of the collateral.
Over many years, banks have owned factors and banks have sold factors. For any individual deal, it may become more expensive or more difficult as that manufacturer needs to find replacement financing/factoring should the bank-owned factor want to exit the relationship—or not be able to increase the support as the business needs change.
However, Rosenthal has seen a large increase in our factoring business over the years, being able to provide the factoring and financing when the bank-owned factors are unable or unwilling to.