How The Credit Junction Stacks Up

TCJ has been able to eliminate requirements that have historically troubled borrowers. We finance profitable businesses and utilize in-house technology to understand company performance and capital availability in real-time.

 
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STRUCTURAL DIFFERENCES:

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Feasibility

Factors require a lockbox, verification of customers, notification of customers, or daily payments. TCJ does not.

 

 
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Availability  

Factors focus on invoices and deposits, leaving borrowers cash strapped or in need of multi-party solutions. TCJ leverages a wide asset base (A/R, Inventory, M&E, POs, IP).

 

 
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Transparency

Factors have complex pricing structures and requirements; TCJ does not alter pricing and makes availability governance clear to borrowers.


CASE STUDY: Importer and Distributor of Biodegradable Cutlery

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About the Company

This company is located in Northeast, United States, and has been in business for over 10 years. Their experienced management team provides biodegradable cutlery to a wide variety of US-based product redistributors. 

Challenges

Lack of Availability: The company had a financing relationship with a factor, which did not lend on inventory, creating significant cash constraints.

Compromised Relationships: The company had worked hard to build strong customer relationships. The factor began contacting major clients to demand payment, which caused the company to lose many key customers.

Cost Confusion:  The factoring facility had complex terms and hidden collateral management fees. The company's CFO had trouble calculating the effective yield given the structure of the facility.

Restrictive Borrowing Base: The company had many large, long-term customers that would routinely have longer payment terms. None of these customers were included in the borrowing base. 

The TCJ Solution

The Credit Junction worked closely with the company and its management to craft a financing solution that met both their short and long term needs.

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