Factoring in Miami-Dade

Contributor: Michael Barnes
Over a century ago, Henry Flagler extended the Florida East Coast railway to Biscayne Bay in Miami and a city, if not the whole region of Southeast Florida, was born. Soon, real estate investors flocked to swamp lands and turned South Florida into what Flagler planned as the new American Riviera.

Real estate is still the main engine in the economic train that is Miami and South Florida. The industry is the big player in the area, if not the world. According to a recent report by Christie’s International Real Estate, Miami is ranked 8th in worldwide top luxury real estate markets. (see source)
Currently, real estate is king in Miami and South Florida. The banking market is built to accommodate this reality, according to Marc J. Marin, Managing Director of Florida Business Capital, a Miami factoring firm.

“South Florida is not a dominant C & I (Commercial & Industrial) lending market where customers have receivables and inventory,” Marin says. “Banks here in South Florida are oriented to the real estate market. Banks here typically don’t like to do working capital loans.”

So what’s a traditional business in South Florida with hard assets supposed to do for working capital? Marin suggests such companies, especially newer ones, consider secondary lenders such as an invoice factoring company if they’re “pre-bankable” or too new for traditional bank lending.

“If you’re bankable, go to a bank,” Marin advises. “When you’re not bankable, you have to start looking at secondary lenders like asset-based lenders or factors.”
Both of these secondary lenders base funding on a prospective company’s assets such as receivables and inventory in the case of an asset-based lender. A Miami factoring firm like Florida Business Capital buys a company’s receivables, and in a collateral-based exchange, injects the target business with working capital to fund day-to-day cash flow needs like payroll, suppliers and costs associated with growth.

Miami factoring firms such as Florida Business Capital are increasingly an attractive option for companies in the business-to-business market looking to leverage off their accounts receivables. The ideal client for a Miami factoring firm is one that sells goods or services to another company on terms and is waiting to get paid.
“When you have quality commercial receivables, you consider an asset-based lender, but most of these lenders start lines of credit at $1 million and higher,” Marin explains. “If you have less, I suggest you consider factoring.”

So if you’re a newer South Florida business and in need of day-to-day working capital, Florida factoring companies like Florida Business Capital are your best option for raising funds quickly and hassle free.