In 2006, Michael Rothbard and Chris Ann Ernst founded Sleep Studio. The company’s products were focused on helping people sleep better with their innovative memory foam, ViscoFresh.
When Sleep Studio was on the verge of a growth spurt, Rothbard and Ernst needed capital to bring their plan to fruition. However, they understood that a traditional bank would not be able to validate their aggressive business model and provide the money needed to move forward.
A veteran in the industry, Rothbard had worked with a factor before and knew that it might be the right solution for the Company. Shortly thereafter – in 2008 – Rothbard, with guidance from his accountant, engaged Capital Business Credit (CBC).
“When a company is in its infancy stages it is often difficult to get financing from a bank,” commented Lee M. Cohen, CPA, the company’s accountant. “For this reason I knew Sleep Studio would have to turn to a reliable, alternative financing source to get where they wanted to be.”
CBC provided traditional factoring services, lending money against Sleep Studio’s receivables. As a result, the Company was able to obtain credit in advance and no longer had to wait the 30, 60 or sometimes 90 days for its customers to pay. Getting paid early on the receivables, provided them with cash to make quick decisions and investments
“We understood that given the recession and current economy, it’s harder for banks to get a feel for the credit quality of smaller businesses. CBC provides the cushion necessary to allow us to service our customers, as well as make investments to grow,” Rothbard said. “We know that Sleep Studio would not have been able to obtain the services CBC provided with a traditional bank.”
After entering into a relationship with CBC, Sleep Studio experienced triple digit percentage growth in 2009. Today, Rothbard and Ernst attribute much of this growth to the help CBC provided and the confidence they demonstrated in the Company.