It’s not uncommon for bankers to be unable to qualify certain businesses for financing, whether due to the business’ start-up nature, weak financial picture, the perceived riskiness of its industry or a number of other issues. In these situations, it can be extremely beneficial for lenders to have an established partnership with an alternative lender like First Vancouver Finance.
FVF offers Full Service Factoring, Accounts Receivable Financing (PrimeLine), Purchase Order Financing Solutions, and a No-Advance Accounts Receivable Management Service. Our typical client is a small business with annual sales of between $150,000 and $10 million.
Why We’re Not Competitors
The services we offer provide business owners with access to working capital so they can focus on more important things, like sales and profitability. We work well with traditional lenders because we do not offer banking services-we stick to what we do best. Our prospects are either pre-bankable, non-bankable, turnarounds or very fast growth companies.
Here are the top 8 reasons why it pays to establish a referral relationship with FVF:
1. You can say “no” nicely. Declining a line of credit request can be both unpleasant and time-consuming. By offering these businesses a viable alternative instead of just a denial, you become part of the solution, not the problem, from their perspective.
2. You can grow your deposit base. Attract new clients to your bank by introducing them to FVF for their financing needs and offering them banking products until they can qualify with you. This can be a useful tactic when you run into rapid growth situations.
3. You can retain existing clients. Instead of losing a client to a competitor, you can offer them a solution that actually works. Ideally, you will be given the option to keep the client’s non-lending business, follow their success and be positioned to offer them financing down the road.
4. You can strengthen client relationships. Clients willappreciate the fact that you go the extra mile to offer them a solution instead of giving up and saying “no.” This helps position you as a true advisor instead of just their banker, and clients will be more likely to come to you in the future when they need new financial and banking services.
5. You can help clients grow. Unlimited access to working capital will only help your clients grow, and a growing business presents opportunities for everyone, including your bank. As the business grows, it will need more financial and banking services your bank can provide. The services that FVF provides help keep businesses from making serious mistakes and allows them to focus on what they do best.
6. You can increase your efficiency. Rather than waste a lot of time on businesses that you know will not qualify for a line of credit, you can refer them to us instead. We will keep you posted on their progress and you can schedule a follow up to offer your services.
7. You can help build a better client. When you improve accounts receivable and accounts payable and increase cash flow, it simply makes a company look better on the balance sheet. We provide complete back-office A/R management services, so you know the client will follow a good credit policy and maintain a formal document trail, thus increasing their chances of success.
8. You can provide clients with a reality check. Some businesses have unrealistic expectations of their bank-for example, they want unreasonably low interest rates or they only want to offer receivables (not hard assets) as collateral. When you refer them to FVF, we will explain our need to manage their A/R and thus charge higher fees. This just might cause them to return to you with the collateral you require.
Becoming Bankable Again
It’s important to note that alternative lenders should not be considered a permanent source of financing. Instead, the client should be encouraged to have an exit strategy. Ideally, the plan should be to turn around the business, improve the financial statements and make the business bankable once again.
Here at FVF, we want to be your preferred vendor when it comes to A/R financing situations. We would also be interested in a more formal arrangement that could include inter-creditor arrangements, mutual referral fees and ongoing training programs.
To learn more about the benefits of referring non-bankable clients to FVF, call us at (604) 988-1490 or send an email to TKlausen@fvf.ca. Also visit www.fvf.ca for more information and articles on alternative financing.
To learn more about FVF and the financing options we can provide to clients, please visit www.fvf.ca us at (800) 663-0721.