Considering the current economic climate, the rate of inflation and a potential recession looming, preparing workable solutions to implement ahead of financially stringent times is imperative for small and mid-sized businesses (SMBs) who don’t have the resources and financial stability of larger organizations. Because of these limitations, traditional financing options from bank loans to lines of credit aren’t always accessible or sufficient.
Small to mid-sized businesses (SMBs) make up 99.9% of enterprises in the U.S., according to a report by ForwardAI, and the majority (a reported 60%) of those businesses fail due to poorly managed cash flow. It’s a challenge businesses face on a global scale, and providing SMB owners with more sustainable funding solutions begins with educating partners and local businesses on effective cash flow management and available alternatives.
In the past, the term “factoring” has been associated with a negative connotation, a taboo word in the business funding world. The misconception developed from the idea that factoring is only leveraged when a business is in desperate need of cash or in a poor financial state – but that’s not always true. In fact, factoring is an impactful solution for companies to rely on to support a period of rapid growth.
“The demand for subcontractors and general contractors from the crush of 5G build projects snowballs into the need for cash flow or capital to continue to run these businesses,” John Minnis, Kompass Funding Director of Operations said. A critical resource helping companies to make payroll and cover operational expenses during this time is alternative funding, a solution offered by Kompass. This engine keeps companies moving forward at full speed.
For this week’s blog post, we feature a team spotlight on our newest member, Ben Hagenkord! Ben recently graduated from Kansas State University (Go Wildcats!) and joined Kompass Funding as our account executive. In his role, Ben will be focusing on building and managing client relationships across our factoring division, while also assisting with portfolio management and underwriting new opportunities.
Kompass Funding, based in Overland Park KS, recently added Ben Hagenkord to the team. Ben will serve as their lead account executive.
Covid-19 changed the landscape for small businesses around the country and especially in Kansas City. “The Payment Protection Program (PPP) was a good band-aid, but now small businesses are really looking for that growth capital and it’s been a challenge for them to find that,” according to John Minnis, CEO of Kompass Funding.
As members of a large industry, we want to help clients find the right financial partner with the right solutions to ultimately help their business grow. With hundreds of different options out there, we are often asked by potential clients “what should I be looking for in a lender?” As a lender ourselves, we want clients to look for 3 key characteristics before entering a relationship: curiosity, mutual benefits, and multiple funding options.
Applying for an invoice funding program can seem like a daunting task, especially if you do not know what information and documents you need to apply. From the first interaction all the way to initial funding, we compiled every action and documents required during each step below. Keep in mind, some applications may be different but generally request the same information.
In the trucking world, there are lots of moving parts (literally and figuratively). Literally in the sense that goods are being shipped across the country and figuratively because shippers and carriers are constantly being matched to determine optimal routes for shipments.
Another important moving part is cash. For many carriers, sometimes it can take a couple weeks for brokers to pay for their loads. This can cause a buildup in invoices and a gap in cash flow, especially if truckers are hauling every single day.