Hedge Funds, Banks and Other Accredited Funding Sources Offer Diversified Source of Funding Through Innovative Online Receivables Marketplace
After months of efforts to stay afloat, CIT Group's filing for bankruptcy Sunday sent shockwaves through the small and midsize business community, particularly retailers and manufacturers. Many CIT customers have been contractually bound to CIT even as the nation's single largest lender to small and midsize companies struggled on life support. Now, those companies have a reliable alternative as The Receivables Exchange announced today that it stands ready with more than $20 billion in liquidity to help CIT customers to fill their liquidity gap. The Exchange allows companies of all sizes and from all industries to post their outstanding invoices on its real-time auction trading platform where a global network of accredited institutional investors competitively bid to purchase the receivables.
“The Receivables Exchange's market-based solution is perfectly positioned to help CIT customers gain quick and easy access to a reliable, competitive source of capital so they can continue to fund their day-to-day operations,” said Bill Andersen, founder and portfolio manager of Andersen Capital Management. “As a receivables Buyer on the Exchange, we have seen firsthand the value of the Exchange's centralized marketplace. The Exchange helps Sellers turn their receivables into cash quickly and easily on their terms while providing Buyers with a reliable, short-term investment opportunity.”
Many of the nearly one million businesses that rely on CIT for working capital, including manufacturing and retail companies, had been legally bound to continue working with CIT as a single funding source, even though they were left vulnerable due to the lender's ongoing struggles. However, with the recent bankruptcy filing, those companies are now eligible to utilize alternative funding sources and many are actively seeking additional sources in order to stay afloat.
“The bankruptcy filing of CIT Group represents a historic and regrettable turn of events for the small business community and for our economy,” said Justin Brownhill, co-founder and chief executive officer of The Receivables Exchange. “Thousands of business owners are seeing their single source of liquidity evaporate before their eyes. Sunday's filing underscores the fact that companies can no longer rely on one primary source of liquidity. It is imperative that they have broad access to competitively-priced capital. The Receivables Exchange stands ready to provide a diversified source of liquidity to help CIT customers maintain the strength of their businesses.”
The Receivables Exchange, which has seen an increased use of receivables financing by businesses of all sizes and across more than 40 industries, reported quarter-over-quarter growth of nearly 200% in the third quarter 2009. Businesses are signing on to tap into the $20 billion of liquidity available on the Exchange's transparent, centralized marketplace for receivables financing.
Most businesses wait 60+ days to receive payment on their outstanding invoices - many even longer as their larger customers are slowing down payments to meet their own cash flow needs. Members of The Receivables Exchange no longer have to wait for prolonged periods for their outstanding invoices to be paid. On the Exchange, companies can post their receivables one day and receive their funds the next business day.
About The Receivables Exchange
The Receivables Exchange (www.receivablesXchange.com) is the world's first online marketplace for real-time trading of accounts receivable. Changing the landscape of small business financing, The Receivables Exchange provides a new dimension in working capital management. The Exchange connects a global network of accredited institutional investors (Buyers) to the nation's millions of small and mid-sized businesses (Sellers) in search of capital to grow. Buyers get direct access to an $18 trillion new investable asset; Sellers gain access to a new competitive working capital management solution by having their receivables bid on in real-time by multiple Buyers.
The Receivables Exchange
Laurie Azzano, 415-786-3317