The issue was whether to interpret certain contract clauses as eliminating a claim for fraudulent inducement. The facts are bad. The Plaintiff signed a lease with the Defendant to open a restaurant in Dallas. The Plaintiff signed a lease with the following clauses:

Representations. Tenant acknowledges that neither Landlord nor Landlord’s agents, employees or contractors have made any representation or promises with respect to the Site, the Shopping center or this Lease except as expressly set forth herein.

Entire Agreement. This lease constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no subsequent amendment or agreement shall be binding upon either party unless it is signed by each party…

After opening the restaurant, the Plaintiff became aware of a foul odor that turned out to be sewer gas. The odor greatly affected Plaintiff’s business. Plaintiff was unable to remedy the problem, and had to close. Plaintiff then sued Defendant for a number of causes of action including fraudulently inducing them into signing the lease.

Before signing the lease, Defendant had made statements to Plaintiff that it was not aware of any problems with the space and that the space was in perfect condition. Plaintiff presented extensive evidence showing that Defendant was aware of the odor problem, but had concealed it from Plaintiff.  After considering the evidence, the trial court concluded that Defendant had lied and rendered judgment for the Plaintiff. The appellate court, however, reversed and found that the above clauses negated any reliance for fraudulent inducement. Plaintiff appealed to the Texas Supreme Court. The issue was whether the contract clauses prevented Plaintiff from being able to rely on Defendant’s untrue statements as a basis for a fraudulent inducement claim.

The dissent pointed out that the clauses explicitly state that there were no representations other than in the contract. There can be no statements for Plaintiff to rely on if the parties agreed in the contract that there were no other representations. If Plaintiff, who was represented by counsel, did not like the clauses, then it should not have agreed to them. As a result, Plaintiff should lose on its fraudulent inducement claim.

The majority of the Court, however, disagreed. They reasoned that the clauses did not expressly disclaim reliance. They just state that no representations were made other than are in the contract. Since the clauses did not disclaim reliance, Plaintiff wins.

The Italian Cowboy Partners opinion is a classic example of where the facts were so bad, that the Court felt compelled to find a remedy. Now, unfortunately, the law is less clear. The lesson is to be careful what you put in contracts when you are relying on someone else’s statements or someone is relying on your statements. Many of you negotiate your own intercreditor agreements. Be especially careful of the clauses in these agreements.

This article is not intended to render legal advice for any specific matters or situations. It is merely intended for informational purposes. You should contact your attorney for advice about any specific matters.

About the author: Scot Pierce is a partner with the lawfirm of Bracket & Ellis, P.C. located in Fort Worth, Texas.  He has represented a number of factors with commercial litigation and bankruptcy issues.  He also regularly writes articles and presents speeches on creditor issues.  He can be reached at 817/339-2474 or spierce@belaw.com.

Wishing you continued success. The Factor Guru.

Facts of the Case

In 2002, Jersey Tractor Trailer Training, Inc. entered into a loan agreement with Wawel Savings Bank for $315,000.  To secure the loan, Wawel took a blanket security agreement against all assets including inventory, equipment, accounts, instruments, documents, chattel paper and other rights to payment including general intangibles.  Wawel filed a UCC-1 on May 24, 2002.  Wawel put no restrictions on Jersey’s use of its accounts and the proceeds unless there was a default on the loan.

In 2003, Jersey entered into an agreement to factor its receivables with Yale Factors NJ, LLC.  According to the court, Yale never asked Jersey about any prior encumbrances and never reviewed Jersey’s books or records.  Dun and Bradstreet ran a lien search for Yale, but instead of using Jersey’s exact legal name, they left off “Inc.”  Because of this, Dun and Bradstreet did not find Wawel’s senior lien.  And, of course, the client concealed Wawel’s loan from Yale and concealed Yale’s factoring agreement from Wawel.  Yale filed their UCC-1 against all present and after acquired accounts in 2003.

Jersey continued having cash flow problems.  In December 2005, Wawel and Yale finally learned about each other and began litigation.  By April 2006, Jersey Tractor declared bankruptcy.  Yale and Wawel promptly filed an adversary proceeding in the bankruptcy court to determine who is entitled to the proceeds of all of Jersey’s accounts.  Yale argued that this case was an exception to first to file priority rule and that it should win over Wawel.

2007 Opinion

In 2007, after a two day trial, the bankruptcy court held that Wawel wins.  Yale argued that under New Jersey’s version of UCC 3-302, 9-330 and 9-331, it should have priority over Wawel to the proceeds because it was a holder in due course and purchaser for value of invoices.  For Yale to qualify for protection under either of these statutes, the court must find that the invoices are “instruments.”  The court must also find that Yale took the instruments in “good faith” which means that Yale observed “reasonable commercial standards of fair dealing.”  Although the court held that the invoices are instruments, the court denied Yale relief because Yale did not observe “reasonable commercial standards of fair dealing” when it entered into the factoring agreement because its due diligence was lacking and because it did not run the lien search using the exact corporate name of the debtor.

2008 Opinion

Yale appealed to the district court.  In 2008, the district court issued an opinion upholding the lower court’s ruling.  Wawel wins again.

2009 Opinion

Yale then appealed to the Third Circuit Court of Appeals.  In 2009, the Third Circuit affirmed most of the district court’s decision, but found that the bankruptcy court could not conclude that Yale’s lien search was commercially unreasonable as a matter of law just because it omitted “Inc.” from the name.  In fact, the Third Circuit Court seems to believe Yale’s search was commercially reasonable.  But instead of reversing the bankruptcy court, the Third Circuit sent the case back to the bankruptcy court to redetermine commercial reasonableness.  No one wins, but Yale gets another chance.

2010 Opinion

This year, the bankruptcy court issued a ruling in favor of Wawel . . . but for a different reason.  The bankruptcy court reconsidered the issue of whether an invoice is an “instrument” for purposes of 3-302, 9-330 and 9-331.  The court concluded that an invoice is merely a record of a transaction and not an instrument.  Yale Factors, therefore, cannot avail itself of any of the holder in due course or purchaser for value protections regardless of whether it acted with commercial reasonableness.  Yale attempts to argue that it was not just invoices, but also checks from account debtors that it purchased, therefore, the court should analyze whether these checks are instruments.  At trial, however, Yale never introduced any checks into evidence.  Without these checks, the bankruptcy court held that it cannot even begin to consider this issue.  Wawel wins again.

So what should we learn?  There are lots of lessons, but I want you to consider how much time and money these parties have spent litigating this issue.  Better due diligence and lien searches could have saved everyone a lot of time and money.  Or, to say it another way, an ounce of prevention is worth a pound of cure.

About the author:

Scot Pierce is a partner with the lawfirm of Bracket & Ellis, P.C. located in Fort Worth, Texas.  He has represented a number of factors with commercial litigation and bankruptcy issues.  He also regularly writes articles and presents speeches on creditor issues and has been a speaker with the International Factoring Association.  He can be reached at 817/339-2474 or spierce@belaw.com.

Wishing you continued success. The Factor Guru.

What is NFG?

For the past six months, we have been working on expanding our brokerage business, the Business Group of Brokers. We established The National Factoring Group as a separate entity and factoring brokerage website, designed to combine servicing the financial needs of the small and medium sized business owner with the exposure that the internet brings.

We wanted to present our collective prospective clients options that would make it easier to find you, the factoring company. We looked at factoring companies across the country and thought, “How can we present this information to the prospective client in the most organized and concise way, while still maintaining equality amongst these factoring companies?”

The website groups factors by the state (or states) in which direct representation exists, either by an operations’ center or business development office. To maintain an equal playing field, each factor then describes their range of services, niche features, and what makes them different. We believe that this strategy helps equalize local and national factoring companies amidst a competitive marketplace.

Through the website, business owners can educate themselves on factoring and determine which factoring company best meets their needs. The prospective client enters specific financing needs, industry information, and other data to help target an appropriate funder. Based on the preselected parameters by both the business owner and the factoring company, a set of matches are created.

What input does NFG have into choosing which factoring companies are sent information?

The National Factoring Group has no input into which factoring companies are chosen and does not see any client information until they are sent to the factor.  These emails occur simultaneously to the factor and to NFG.

Each factoring company is represented by certain aspects of their company such as their industries serviced, size range, and the way they describe their company.  Descriptions provided range from very simply saying, “Here is what I do…” to more in depth descriptions with a brief history of their company and why their clients stay their clients.

What makes NFG different than other brokerage businesses or websites?

The National Factoring Group strategy allows the prospective companies to decide. By inputting information about their business, their search results produce only factoring companies where a match would exist (i.e., size, demographics, other niche financing, etc). This process saves the company time in their search for financing.

More importantly, however, is that a portion of all commissions earned through NFG will go back into the factoring industry through advertising, articles, or other announcements that promote factoring for small and mid-size businesses.

Does the NFG select where to spend those funds?

Actually, no. We have set up an advisory board including factoring companies and other factoring professionals. These advisors will help to provide guidance on where these monies should be spent.

I often have people ask me if this is a website that is used to rate factoring companies in any way.

No, we do not rate the factoring companies. Every factor stands and is represented purely on what services they provide and how they choose to describe themselves. We do, however, have a code of conduct that requires all factoring companies to be honest in how they represent themselves to prospective clients.

Do factoring companies need to provide any information to NFG?

Yes.  Each factoring company provides an application or information package. This basic information focuses on their company, preferred industries, targeted size ranges, and other items. No reporting or confidential information is requested.

This application process is to ensure that the factoring company is represented appropriately to the businesses seeking factoring services. For an application, you can email me at brandi@nationalfactoringgroup.com.

What does a prospective company seeking factoring need to do?

The process for prospective clients is very simple. They provide general information about their company and their needs and select a local or national resource option. From there, they are presented with a matched list of factors that fit their company’s needs. The company can then read through some general information and select up to three factors that they would like to hear from directly. To complete their request, the company then completes more detailed information and the lead is then sent to the factoring company contacts listed.

In summary, it is also important to note that the funding transactions and relationships are directly between the factors and the clients. The role of the NFG is as a brokerage arrangement. For additional information on NFG, please contact Brandi Bauer at brandi@nationalfactoringgroup.com.

Wishing you continued success. The Factor Guru.

Personally, I know many factoring companies using this service as part of their due diligence to ensure prospective clients are up to date on their payroll and other related taxes. Further, since Tax Guard provides an ongoing tax monitoring service, many factors are using this service to eliminate additional client reporting internally while still gaining the value of early detection for such taxes. Jason Peckham with Tax Guard has provided an article about how to address these past due taxes with your clients. However, if you are like me, you would just call them… it’s just that much easier…

Not all representatives are created equal.  Many do not work with the IRS Collections Division on a regular basis and the quality of representation can vary widely.  The client’s perspective as to the progress of negotiations with the IRS can differ substantially from the actual situation.

Upon learning of an issue with the IRS, the Factor should follow up with the client and representative, if applicable, to see if there is a legitimate plan in place to address the liability.  It is never safe to assume that everything is okay simply because the client has a representative.  The basic issues are simple – are your client and his/her representative effectively negotiating with the IRS and how am I (the Factor) affected?  The answers are not always clear.  However, by asking a few simple questions, the actual situation can begin to emerge.  There are some specific questions you should ask the client and/or the representative.

1. What is the strategy? Once the liability has been assessed by the IRS, it is a race to resolve the issue before the lien is filed and 45 days pass.  There is no time for learning on the fly or exploring how the IRS Collections Division works through trial and error.

Typically, the best strategy to protect the client / taxpayer and the Factor is an Installment Agreement in conjunction with a request for Subordination of Federal Tax Lien (subordination).  The IRS cannot take enforced collection (levies) while a proposal for an Installment Agreement is “pending,” an Installment Agreement is in good standing, or for thirty days after an Installment Agreement has formally defaulted.  Additionally, a subordination can only be issued if there is a formal Installment Agreement in place.

2.  Have financial statements been prepared and sent to the IRS? Almost every resolution strategy with the IRS (except for personal liabilities less than $25,000 or business liabilities less than $10,000) requires completion of two financial statements – forms 433-B (business) and 433-A (personal).  The Automated Collection System or Revenue Officer (the two arms of the IRS Collections Division) will use these forms to determine an “appropriate” resolution.

A taxpayer gets one chance to make a first impression with the IRS.  It is important that the 433-B and 433-A accurately reflect the taxpayer’s actual ability to pay.  A list of assets without corresponding encumbrances or an income and expense analysis that demonstrates the taxpayer can afford more than the requested payment (or cannot afford a payment at all) will likely result in rejection of the proposal and substantially delay the process.  If the representative submits poorly prepared forms, the 45 days will likely pass without a resolution (the time will be spent trying to provide support/clarification of the financial information provided), which means the Factor will have to cease funding.

3. Will a proposal be submitted with the financial statements? Too many representatives (inexperienced or otherwise) submit financial statements to the IRS without a formal proposal.  The IRS can use the information provided on the 433-B to levy the taxpayer’s bank accounts and accounts receivable.  A proposal is necessary to facilitate a resolution and protect the taxpayer and Factor from levy (the IRS cannot levy so long as there is a “pending” Installment Agreement).

4.  How am I (the Factor) protected? Generally, there are several ways to address an IRS liability.  The existence of a factoring relationship severely limits those options because of the federal tax lien and its impact 45 days after it is filed.  Don’t assume that your client’s representative is aware of the factoring relationship. In many cases, the client will fail to disclose important information to the representative.  If the representative is unaware of the factoring relationship, a strategy could easily be pursued that does not take into consideration the Factor’s issues and concerns.  Additionally, don’t assume that the representative knows how to quickly address these issues. Many representatives address issues with the IRS in a reactive rather than proactive manner.  It is much less likely that a local representative who only occasionally works with the Collections Division of the IRS will be familiar with factoring and the implications of an IRS liability on Factors.  Finally, keep in mind that a representative answers to the client, not to the Factor (unless other arrangements have been made).

Making assumptions is generally not advisable.  This is especially true when the IRS is involved.  By taking a few minutes to speak with your client’s representative, you can verify that your concerns are being addressed as well as protect your client’s business from a less than helpful representative.

For additional information on Tax Guard, please contact Jason Peckham, Director of Business Development, (800) 880.7318, Email: jpeckham@tax-guard.com.

Wishing you continued success. The Factor Guru.

While working with customers in foreign jurisdictions can generate substantial rewards, such trade also comes with great complexities that are uncommon in domestic transactions.  One must consider foreign credit, political, currency, extended payment term and legal enforcement risks before engaging in business abroad.  Despite the aforementioned challenges, the number one difficulty in cross border transactions is finding a lender who understands these risks, yet is still willing to provide the working capital needed to fund foreign transactions.  Cross border financing is often the key factor in growing or turning around an international business.

What are some of the common solutions for financing cross border transactions?

US banks often exclude international sales from the available borrowing base unless the client obtains credit insurance or working capital guaranty through the Export-Import Bank of the United States (Ex-Im) or through private insurance providers.  While each seems a viable option, each carries its own restrictions.  Although Ex-Im is designed to promote trade between the US and foreign countries, it has certain exclusions including, but not limited to, the suppliers’ locations and the buyers’ countries.  Another issue to consider with Ex-Im is the extensive underwriting process that may take months to obtain approval for a transaction.

Private credit insurance also has its downfalls.  Insurance providers help exporters extend competitive payment terms by protecting their foreign receivables against almost all non-payment risks.  Almost is the operative word here, as it is limited to political and insolvency risks.  It is important to remember that an insurance company can decline or reduce coverage at any time.

Both insurance options can prove costly and time consuming. Also important to note, is that if the insurance policy is cancelled, subsequently the loan will be as well, leaving nothing to show for the time and hard work obtaining this loan in the first place.

What are some of the most effective solutions for cross border financing?

Confirming, Forfaiting and Factoring are the most effective solutions for cross border financing.

Confirming is a financial service in which an independent financial entity offers to discount an export order in the seller’s country and makes payment for the goods.  For the exporter, confirming means that the entire export transaction from the manufacturing to the delivery stage is coordinated and paid for over time by the bank.  This type of financing is available in Europe, mainly in Spain, and has yet to be adopted in the US.

Forfaiting is the selling of long term promissory notes or negotiable instruments of the foreign buyer.  These instruments may also need to carry the guarantee of a foreign government or a highly rated bank.  Forfaiting is often used in medium and long term transactions and is normally very paperwork-intensive.

Factoring, another popular solution for cross border financing, is the discounting of a foreign account receivable and is used in short term financing.  In the factoring of foreign accounts receivable, the exporter sells its foreign accounts receivable to a factoring company for cash at a discount from the face value.  Factoring of foreign accounts receivables is less frequently used than factoring of domestic receivables.

Factoring of foreign accounts receivables is complex and only a few banks and firms have the knowledge to work with such complex asset classes. Factoring of foreign receivables requires extensive knowledge with foreign laws, advanced understanding of previously highlighted risks and building an effective platform to manage it all.

As the world opens its borders through the use of Internet, financing solutions for open trade continue to evolve.  My advice is to always seek a lender that is knowledgeable in foreign transactions and who can take your business to the next level.  Seek a lender who has experience in foreign markets, in all of its complexities and one who is willing to partner with you to achieve your goals while mitigating risks.

About the Author: Elizabeth L. Hastings is a Senior Vice President of Business Development at FGI Finance (www.fgifinance.com), global commercial finance group with offices in New York, Dallas, Chicago, and Los Angeles. Ms. Hastings sits on the board of the Dallas CFA.  She is a member of ACG, TMA, WFE, the Finance Forum, and the International Factoring Association. She can be reached at the Dallas office at 214.295.3216 or ehastings@fgifinance.com.

In April, after being a factor all of these years, I set out to start a brokerage company.  This experience has given me a different perspective, as now I am helping businesses in various areas of financing while also working more closely with companies that were once my competitors.  This new perspective also has reaffirmed what I already knew: factors are definitely doing business and helping our economy.

The economy has, however, changed. Sadly, not all small and mid-sized companies have changed quickly enough to save their businesses.  These small to medium sized businesses and start ups are what will help rebuild our economy.  For many of them, factoring is the best way, or the only way, for them to maintain their cash flow.  Since there are a variety of factoring companies within different markets, industries, niches, size ranges, etc., I can now introduce my clients to the factor that best suits their needs and their situation, thereby being able to say ‘Yes’ a lot more. Being able to say ‘Yes’ allows me to make a greater impact in the small and mid-sized market.

After all, factoring is the lifeblood of many of these small and medium sized businesses; it enables these companies to grow and saves many businesses that have been hit hard by the economy.  With factoring, business owners and their businesses are also able to purchase more inventories, accept more orders and jobs, pay vendors on time, and hire new employees.  This trickles down allowing their vendors to do the same.  By helping one company, we are helping many. We are all helping to rebuild the economy.

During these past months, I have rediscovered the joy of factoring.  Recently, I was able to help a company that was struggling to find a way to make payroll at the end of the week.  With the funding provided through a factoring facility, twelve families did not have to worry about how they were going to put food on the table.  Our client was so happy, he cried. To me, that is worth all the early mornings and late nights.

While I don’t know if this is the nature of what my article was supposed to be, I felt it was important to share these thoughts and to say to all the factors and their dedicated teams, “Keep up the good work.”  You have a direct impact on the people and companies with which you interact. You are doing more good than some may realize. Thank you.

The Business Group of Brokers, LLC was created to provide a multitude of alternative financing options, utilizing the strengths of different finance companies to make sure clients find the best financial match for their specific needs. Businesses benefit from expertise and years of experience in helping them find the working capital needed to grow and expand their company.  Since every finance company and their clients are unique, The Business Group of Brokers strives for complete satisfaction on both sides of the transaction and plays an intricate role in creating a good match for the financier as well as for the company. To find out more, visit www.mybgb.com.

Tax forfeitures affect an entity’s liability protection.  You are all familiar with the various entity forms.  You know that some entity forms provide limited liability for owners, shareholders and partners.  These include limited liability companies, S corporations, C corporations, limited liability partnerships, and professions corporations.  You also know that sole proprietorships, general partnerships, joint ventures and DBAs have no limit on liability.  Entities can lose their liability protection by failing to pay state franchise taxes.

Using Texas as an example, entities have three levels of standing.  They are (1) “Good Standing,” (2) “Not in Good Standing,” (3) and ‘Temporary Good Standing.”  Most states have the same or similar designations.  “Good Standing” means the entity has filed all franchise tax reports and paid its franchise taxes in full.  This allows the entity to continue doing business in the state.  “Temporary Good Standing” is really no reflection on the entity itself.  This simply means that the state has not yet processed the franchise tax reports. Until it does, all entities are granted temporary good standing.

“Not in Good Standing,” however, is very different. “Not in Good Standing” is a red flag for factors.  It means that the entity has not paid its state franchise taxes and has, therefore, forfeited its right to do business in Texas.  In practical terms, this means the entity is now operating as an assumed name or DBA so any shareholders, owners or partners are not protected personally from liability for debts incurred while the entity was “Not in Good Standing.”  Or, to be more direct, you are now factoring a sole proprietorship or general partnership.  My experience is that this not only can affect how you factor the client and perfect your security interest, but it is also a red flag that you may very well be factoring into a liquidation.

Because of the effect of failure to pay state franchise taxes, I recommend factors be vigilant in checking this.  Usually, the state comptroller’s office will have this information.  If you have a client whose account status changes for the worse, you should immediately contact the client to learn why this has happened and whether the client intends to correct the problem.  This may allow you to catch a failing business early on and take appropriate steps to protect yourself. Or, it may allow you to avoid factoring a business that just wants your money while intending to file for bankruptcy protection. The bottom line is factoring a client who is not paying its state franchise taxes can be a recipe for disaster.

About the author:

Scot Pierce is a partner with the lawfirm of Bracket & Ellis, P.C. located in Fort Worth, Texas.  He has represented a number of factors with commercial litigation and bankruptcy issues.  He also regularly writes articles and presents speeches on creditor issues, including an upcoming teleconference on Issues to Consider when Litigating against Account Debtors.  He can be reached at 817/339-2474 or spierce@belaw.com.

BY RICHARD EITELBERG, CPA, FOUNDER-PRESIDENT OF HARTSKO FINANCIAL SERVICES, LLC, A SEVEN-YEAR-OLD PURCHASE ORDER FINANCE FIRM WHICH HANDLES ABOUT $150M IN ANNUAL TRANSACTIONS, BASED IN BAYSIDE, NEW YORK (WWW.HARTSKO.COM)

“The Great Recession” has left a lot of asset-based lenders and factors weak and lame.  Their inability during this period to access credit lines from banks, hedge funds, and equity investors often means they must restrict money to existing customers or refuse prospective clients.

Purchase Order Financing and Letters Of Credit generally looked upon as a last-resort bitter pill have seen increased acceptance as a way for a business owner to preserve a transaction opportunity.  With up front honesty, PF is expensive because of the very high risk issues involved and the intensive servicing requirements.  However, if a deal has the potential to yield a 30% profit or more—why should the business owner be concerned about sacrificing a few more percentage points over and above a traditional lender?  Is losing the opportunity to do the deal altogether, a better alternative?

Factors and asset-based lenders should realize that if they are at the end of their line with their client, referring the PF route can keep their relationship and income opportunity alive.  PF is a fast way for their client to secure funds needed to fulfill customer purchase orders and expand their business without giving up equity or trying to borrow additional funds (an option which no longer exists).

Here’s the process:

1.   The customer submits a purchase order to the client with all documents

2.   The client submits the customer purchase order to the PO financier for approval with all costs associated with transactions

3.   The PO financier will then will make direct payments to the client’s vendors so that the merchandise for the customer PO can be produced

4.   The client’s vendors deliver final product directly to the end customer or to a third party warehouse until shipped to end customer

5.   The seller then invoices the shipment and sends invoice and corresponding copy of customer PO to the factor

6.   The factor funds the invoice at his discount, paying the PO financier their loan plus fee

7.   The factor (or bank) collects from the end customer and pays the client their residual left from the advance

PF is taking a piece of equity in a client’s deal on a temporary basis, perhaps, thirty, sixty, ninety days, or 120 days.  A PF firm earns a fee on a precise part of the deal.  The PF firm doesn’t really “lend” a business money.  Most times, PF firms do not actually give a business any money or hard cash.  The PF firm’s money and equity backs up and supports the integrity of said purchase order.  It makes transactions work by opening up an LC usually overseas to procure merchandise, products, and materials for businesses.  (Or, wires are sent to domestic manufacturers to make purchases in behalf of businesses.)

PF is only transactional and temporary with the money going to fund the goods or merchandise in that specific transaction.  PF funds are not allocated to fund payroll, rents, cars, or any other business operations. Therefore, PF enables start-up companies to grow and troubled companies to survive.  Even bankrupt companies are generally able to access PF because the fees are guaranteed by the court.

Finally, in terms of the relationship, PF firms are not offended that a business owner may use this process one day, while returning to the factor or traditional lender the next day.  The PF community recognizes that PF is only going to be used when it is absolutely necessary and all other lender options have been exhausted.  The PF firm accepts that business owners and their lenders will only use it when they need it!

For more information on purchase order financing, feel free to visit www.Hartsko.com, or contact the IFA directly.

More about the author.

Richard Eitelberg is the Founder, President of Hartsko Financial Services, LLC., with offices in Bayside, New York and Deerfield, Illinois.  Mr. Eitelberg, was graduated from Michigan State University with a BA in Accounting.  He earned his license in certified public accounting (New York State).

Mr. Eitelberg has been the Chief Financial Officer for two garment industry companies: Adrian Landau Designs, and B. Lucid.  He was a Senior Auditor for Josephson, Luxemborg & Kantz, CPA’s, PC. He began Hartsko about seven years ago, assembling a group of private equity investors.  Today, Hartsko handles purchase order financing and letters of credit with some $150m in annual outstandings. (www.hartsko.com)

Mr. Eitelberg, a resident of Plainview, New York is a member of the Commercial Finance Association, the International Factoring Association (preferred vendor) and the Turnaround Management Association.