Last week I experienced the Chicago Home Show for the first time. It had quite an impressive turnout, with an estimated 60,000 people in attendance to see the latest in home furnishings. The show’s halls were filled with the latest in accessories, kitchenware, bathroom items and decorative accents ranging from the utilitarian to the extravagant.
The mood at the show was upbeat and conversations with exhibitors indicated there is increased optimism in the air, when compared to 2012. Attendees definitely left with the sense that business was pretty good, or at least getting better.
Compared to the apparel industry, factoring is a lot less prevalent in home furnishings. However, in my discussions with many of the companies at the show, they felt that factoring was a great way to outsource many of the functions they are currently doing in-house like:
- Credit – Factors allow you to outsource your credit services to enable you to concentrate on running your business effectively, with the peace of mind that comes with knowing that your customers are credit-worthy and pose no risk. At CBC, our credit department can screen your customers for credit worthiness, and assume full credit risk on approved sales.
- Collections – A factor can handle the entire collections process for a company so they do not need to be following up with their customers for payment.
As for those companies who may have hit a few bumps in the road over the last couple of years, factoring is a financial instrument that can provide capital in a way that takes a less restrictive approach than a bank. A non-bank factor does not only look at a company’s balance sheet when making a lending decision, it takes into account a company’s full story, business plan and management team.
Over the next year we expect that more and more home furnishing companies will explore the use of factoring to help them grow.