Imagine a world where the owner of a nurse staffing agency could offer his/her receivables to a dozen different invoice factoring companies at one time and then he/she gets to sit back and watch a bidding war unravel as factors compete to win the nurse staffing firm’s receivables. In the end, the business owner walks away with the advance rate and factoring fees that meet his/her expectations.
That is precisely the scenario that could be played out on The Receivables Exchange (TRE), a new accounts receiveable marketplace set to launch in the first quarter of 2008. Founded by Justin Brownhill and Nic Perkin, TRE’s goal is to increase competition among factoring companies to make it easier and cheaper for growing companies to raise working capital.
“It’s almost like Ebay–post you invoice and let everyone bid on it,” Larry Cheng, a partner with Fidelity Ventures, who has invested heavily in TRE’s operations, said in an article that ran in the January edition of Inc. Magazine.
In theory, TRE would work best for companies looking to “spot factor” receivables. TRE proposes that business owners stop wasting time and energy shopping factoring firms when it only has one aged receivable and instead turn to the bidding marketplace to receive cash fast.
Of course not all of the kinks are worked out so early in the game, and business owners and factors alike have their reservations about TRE. Check out the entire article: Short on cash? There’s a new way to sell receivables: on an exchange, and let us know what you think about it!