Women’s History Month Spotlight – Susan Chavez

11:43 24 March in Blog

The first International Women’s Day was held over 100 years ago in March of 1911.  Since then it has transformed into a month-long celebration of the contributions and accomplishments of women around the world.   To commemorate Women’s History Month, Capstone is pleased to highlight an amazing woman’s contributions and innovative leadership success.

This year, we recognize and honor the woman behind one of the most accomplished companies in our portfolio: 

Susan Chavez, Vice President, Business Development & Operations for Recommerce Group, Inc.  

Susan Chavez is Vice President of Business Development & Operations at Recommerce Group, Inc. She has an extensive resume with over 20 years of experience in financial services and operations management. Based in North Carolina, Susan is responsible for business development, project & client management, forecasting/reporting, recruitment, and strategic planning.

Prior to joining Recommerce Group, Inc. in 2016, she held several executive-level roles in manufacturing and the banking sectors.

Outside of work, Susan has positively impacted many people in her community by teaching at-risk youth, mentoring incarcerated women, organizing various fundraisers, coaching baseball & soccer, and being involved with elementary school PTA. She is a mother and an avid Red Sox baseball fan striving to visit every major league baseball stadium in the U.S.


We interviewed Susan to honor her career accomplishments and celebrate Women’s History Month. She is an accomplished businesswoman and has had a major impact on the growth of Recommerce Group, Inc.

You have worked with a variety of companies over the years. As you have progressed in your career you must have had a number of bosses. Some may have been just managers while others were leaders. In your view what makes you a good leader?

The characteristics of a good leader that I focus on emulating include: versatility, adaptability, and understanding the importance of every role in an organization from the janitorial staff to the CEO.  Taking a stand with a fact-based approach. Having the ability to make decisions while collaborating. Always learning. Dressing for the job you want (not the one you have). Waking up every day and proving why you deserve the role you are currently in with moral and ethical work.  Always giving the “Good, Bad and Ugly” to each client, internal & external, to build trust and open communication.  But most importantly, always mentoring the next you – your successor.

What advice would you offer to women just starting out in business that have a desire to work their way up the corporate ladder into a leadership position?

Learn the industry through leveraging professional associations, such as RLA (Reverse Logistics Association) and various tradeshows (RLA, Consumer Returns, International Housewares, etc.).

Learn your company through taking the time to understand each role, interdependency, clients’ perspective (how do they view you), barriers to success, and what is the “Good, Bad and Ugly” view from associates’ perspective within your Company. 

Build your path by evaluating what roles, skillsets, etc. you need in order to get to the leadership position you strive for (including dressing the part).

As a successful woman have you run into barriers, and if you have please describe them and the tools you used to overcome them?

Barriers are a constant in business, but typically they are just tension/conflict points between various groups within an organization.  For example, Business Development vs. Operations; we both want growth, it’s just a matter of how quickly it can happen.

Most successful people have a mentor or other influential person in their life that they model their behavior on. Is there a particular woman who either mentored you or you modeled your behavior on?

I believe every woman is influential in their own way depending on the topic at hand.  As I look back through my life, an individual I have admired and desire to live like is Princess Diana. Not for the fame or lifestyle, but these simple tenets:

  • Be kind to all. 
  • Serve a purpose beyond work and your home.
  • Always have a servant’s heart and be willing to take a stand.

Some women have to make stark choices to succeed in their business careers.  Can you provide any secrets to our readers on how you have successfully balanced your work and family responsibilities?

As a working Mother, candidly it is a constant struggle. However, I have set boundaries and priorities. Some weeks I am good at keeping them, and other times I fail. I never want to miss a school activity, sporting event, extracurricular activity, field trip, etc. My priorities and what drives me have changed drastically over the last eight years.  

How has Invoice Factoring with Capstone impacted Recommerce’s business growth?

The ability for a startup company, like our situation, to see immediate access to cash flow is what drew us to invoice factoring.  Factoring is more important with larger clients that typically have longer terms. It enhances cash flow stabilization and utilization.  Capstone has provided the ability to increase client mix through funding to support expansion and improved cash flows with larger Fortune 100 companies that expect longer terms. 

The partnership/relationship we have built with Capstone from essentially Day 1 of onboarding some of the Fortune 100 clients we service today has been phenomenal. Recommerce is accountable for ensuring no dilution and presenting credit-worthy clients to be factored. Capstone assisted with not only factoring. They also provided purchase order financing support during expansion phases of our business.


About Recommerce Group, Inc.

Recommerce Group, Inc. is an industry leader in returned product management, return center services, remanufacturing, reprocessing, repairing, and recycling of consumer products. For over two decades the management team at Recommerce has been servicing some of the world’s leading consumer product manufacturers.

Understanding Account Debtor Evaluation Criteria

12:23 14 March in Blog, Broker Resources

A factor company’s underwriting process evaluates new clients for factoring programs and takes into consideration the financial strength of the prospective client’s customer base. The financial strength of the client’s customer, or account debtor in factoring terminology, is a good indicator of the likelihood that the account debtor will pay the client’s invoices within the agreed-upon payment terms, which in turn repays the amount advanced to the client. 

Importance of Account Debtor Evaluation Criteria

It is important for factoring brokers to know the account debtor evaluation criteria that factoring companies use in underwriting. Knowing the evaluation criteria will give you a better understanding of the profile a potential client’s customer needs to have in order to meet underwriting criteria. It will also help you to avoid time wasted pursuing prospective clients that are unlikely to be approved because their customers do not meet evaluation criteria. It will give you more time to prospect for potential clients with customers that are more likely to be approved in the underwriting process.

The following are some of the criteria used to assess the current and future health of an account debtor. The weight given for each criteria may vary on a case-by-case basis depending on the circumstances.

Account Debtor Evaluation Criteria

  • Financial Statements
  • Key financial indicators such as profit margin, working capital ratio, and quick ratio.
  • Appropriate values for assets, particularly accounts receivable and inventory.
  • Reasonable cash reserves and working capital. 
  • Credit Ratings 
    • Business credit reports from credit bureaus such as Dun & Bradstreet (D&B), Experian, and Ansonia provide information on credit scores, years in business, high trade credit amounts, payment history, key financial ratios, as well as litigation, lien and bankruptcy history.
  • Trade References
  • Payment history – A newer relationship may not be acceptable as a trade reference.
  • Highest amount of credit used – Low credit amounts may not be a good indicator of the account debtor’s payment history.
  • Amount owing – Large amounts may indicate slow payment, cash flow problems or over reliance on one supplier.
  • Total past due – Dependent upon length of time past due, frequent and large past due amounts may jeopardize the evaluation.
  • Terms of sale – Limited payment terms, deposits, or cash in advance may indicate prior payment problems.
  • Date of last sale – An old reference may not be useful for an evaluation.
  • Bank References
  • Length of the account debtor’s relationship with their bank – A newer relationship may indicate prior financial problems at another bank.
  • Type of collateral – secured or unsecured.
  • Credit facilities – Facility amount, and current and high balance. Having a high balance or not being in compliance with covenants may indicate cash flow problems.
  • Checking account – Current and high balance, and NSFs. Low balances and NSFs may indicate cash flow issues.
  • Client’s Internal Pay History
    • Length of time the client and account debtor have been doing business.
    • Previous payment history the client has with the account debtor – High credit, total volume, average payment days, past due amount, and write-offs.
    • Concentration – A client having a large portion of its invoice volume made up by only a few account debtors may affect the approval decision. 
  • Public Filings
    • Public companies are required to regularly submit public filings and financials -information may be more accessible on the internet by using websites such as YAHOO Finance or EDGAR on the SEC.gov website.
    • Things like stock performance, financials, existing lines of credit, disclosures, etc. are evaluated.
  • Bond Claims – applicable for construction industry contractors
  • Surety bonds – amounts and terms
  • Claims against surety bonds – Claims may compromise accounts receivable eligibility for factoring.
  • Web Presence
  • The account debtor’s website, social media, and news articles may all contain information relevant to the underwriting process.


The following are some potential red flags that may indicate problems for an account debtor evaluation.

Potential Red Flags

  • Low bank account balances – Low balances may indicate a cash flow and working capital problem.
  • Lack of existing credit facility – May indicate problems obtaining credit in the past and/or insufficient investment capital.
  • Limited trade references – Limited trade references may indicate past credit problems and insufficient working capital.
  • Very limited operating history – Companies with a very limited operating history tend to be higher credit risks due to the increased likelihood of operating problems and the financial difficulties they create. 
  • Prior bankruptcy – May indicate a risk of continuing operating and financial problems.
  • Excessive litigation – More litigation than normal, and a reputation for being difficult to do business with, may increase the risk of operating and financial difficulties.
  • Contra-accounts – If the prospective client and the account debtor have account payables and receivables with each other, the account debtor could offset the payment of the client’s account receivable, which would compromise the factor’s collateral.
  • Affiliates and arm’s length transactions – Accounts receivable from related party transactions are usually ineligible for factoring. 
  • Credit terms – If the account debtor offers extended terms, it may create an unacceptable level of financial risk.
  • Consignment sales – Consignment sales distort the account debtor’s financial statements – accounts receivable, sales, and profits are overstated and inventory is understated.

Account debtor evaluations are an integral and important part of the underwriting of a new client. Understanding account debtor evaluation criteria will help you to identify prospective clients with customers that are more likely to be approved in underwriting. It will help you to focus your marketing and prospecting efforts more effectively to increase business volume.

Capstone has the experience and resources to help you build your business volume. For more information on Capstone’s broker resources, please read Broker Resources – Capstone Capital Group

Capstone Celebrates 10 Years of Success with its Diverse Funding Program

10:25 10 February in Blog

At Capstone, making sure all businesses have sufficient access to business financing options is at the core of our business strategy.  That’s why in 2012, Capstone created its Diverse Funding Program which is designed to give MWDBEs the financing tools they need for growth and to be successful.  Capstone began their program before “Diversity” was a buzzword thrown around by politicians and certain interest groups.  We have been a leader in the space because it made good business.  

Through this program, Capstone provides minority, women, and disadvantaged business entities, or in short “MWDBEs,” with access to financial and professional development support.  Those businesses participating in Capstone’s program avail themselves of many non-funding benefits including:  

  • Local and personalized services all over the United States
  • One-on-one business consulting and mentoring
  • Customized training, leadership, and executive development  
  • Procurement guidance
  • Relationship building between MWDBE clients and larger corporations as well as access to governmental and municipal markets 
  • Non-legal contract review
  • Access to bonding
  • Bid support letters
  • Budgeting and forecasting development and support 
  • Referral services for accounting, estimating, legal, engineering, payroll, and other professional services 

These additional benefits also make sure our clients are able to take advantage of the programs that have been set up for them by Fortune 1000 companies as well as state, city, and federal agencies.  Capstone has served as a primary or secondary financing source for a variety of MWDBEs.  In the last 10 years, we have seen much success with this program and have provided funding in excess of $100MM+ to qualified MWDBEs. 

Client Spotlight

Capstone is proud of the contributions it has made assisting MWDBEs with custom-tailored diverse funding programs, mentoring, and coaching over the last decade.   The below case study highlights the success and level of community improvement achieved by one of our MWDBE clients participating in the program. 

Fostering a Chance in the World through Invoice Factoring

In 2016, Capstone began working with a Pennsylvania-based non-profit advocacy organization dedicated to improving the futures of children in foster care.  Their mission was to provide a safe and caring home for all at-risk children in foster care in the Philadelphia, PA region. The organization also provided food, clothing, and therapeutic services to households of up to six children.

This client, a minority woman-owned business, came to Capstone because they were having a very difficult time accessing working capital as a non-profit organization.  Without sufficient cash flow, the client would struggle to manage cash due to irregular payment schedules.  In an effort to sustain operations, have the ability to expand, and open additional homes so they could get more children adopted, the organization sought out Capstone’s assistance for their funding program.  Invoice factoring would be the fastest way to generate immediate cash flow.  

Capstone’s solution was to provide a factoring facility to inject the necessary working capital required while providing the flexibility needed for a non-profit organization.  The client was able to factor invoices as they needed to.  Capstone also helped the client by increasing their advance rate to give them as much funding as possible and worked with them through contract extension periods.   The client contracted with state agencies and oftentimes there were a few weeks when the agencies delayed payments while they reconciled accounts at the end of their fiscal year.  The factoring solution helped keep the client stabilized during this period.  

After a few years of using Capstone’s factoring facility, the client was able to open additional homes and increase the number of children they are able to foster.  As a result, the client has been able to invoice more as they fostered and tutored additional children, thereby creating more cash flow for them to continue expanding.  They also went on to be awarded a seven-figure public agency project with the City of Philadelphia, which has been renewed for 2022 and is expected to be renewed in future years.   

Since working together, additional homes for boys and girls have been opened and there are plans to add more homes.  The client has maintained an invoice factoring relationship while utilizing other non-funding benefits of the Diverse Funding Program and has chosen Capstone as the preferred funding source.  Capstone’s factoring facility was integral to the organization maintaining operations throughout the COVID-19 pandemic while many others in the industry were stretched thin.  Many state agencies across the nation delayed payments as they struggled to manage the effects of the pandemic.  However, with factoring, the main portion of the payment is provided up-front, so any delays in payments aren’t as harmful. 

About Capstone

Capstone offers flexible factoring options for businesses in many industries. In particular, we understand the unique challenges faced by MWDBEs and we have been able to structure a funding platform specifically to support the working capital needs of these types of businesses. Capstone has experienced professionals on staff to custom tailor financing solutions for MWDBEs, and provide consultation and assistance to help them attain their goals and enrich their communities.  Whether it is a single invoice or full-contract factoring, Capstone can supplement these facilities with its Diverse Funding Program.  If you are part of one of these groups, we encourage you to contact Capstone to discuss your specific financial needs and learn more about our program.

Initiating Your First Factoring Deal

15:23 01 February in Blog, Broker Resources

At Capstone, we work closely with our financial brokers to make sure the deal submission process goes as smoothly as possible. We want you to close more deals and build a book of business that will earn residual commissions for many years to come. Getting started is easy.

Here are the steps to follow in initiating your first transaction with Capstone.

Identify a Business Prospect

Identify prospects that do business on a B2B basis and invoice customers for goods or services. Make sure they are in an industry served by Capstone. Prospects can be identified through networking, internet research, and purchased call lists.

Business development is time-consuming so use the methods that are the most successful for identifying a business prospect. Contacts developed through networking are more likely to be successful.

For additional discussion of networking, please read: Tips to Generate Lead Opportunities as a Factoring Broker – Capstone Capital Group (capstonetrade.com)

Initiate Contact with the Business Prospect

The purpose of the initial contact is to introduce yourself, explain the services you provide and determine if there is a need and interest in invoice factoring.

Take notes on the company’s background information so that you can better judge if the prospect is likely to be a good fit for the services being offered.  Here is some information you may want to jot down at this stage.

  • Business name and contact information
  • Description of business activity
  • Sales volume
  • Accounts receivable balance and if they have money tied up in slow-paying accounts receivable
  • Largest 4 or 5 U.S. customers by sales volume
  • The method by which current operations are financed (and amount owed if applicable)

There is other information that will be needed to complete a profile for the prospective client but that can be gathered in the due diligence process after the prospect has been qualified by Capstone.

Avoid Common Factoring Broker Mistakes

Be careful not to get ahead of yourself and start to talk specifics of a factoring program. Capstone will often have to restructure the program you presented. Avoid making misleading statements on topics such as the turnaround of transactions and the length of due diligence and underwriting.

For additional insights on avoiding common factoring broker mistakes, please read: 7 Common Mistakes Factoring Brokers Should Avoid – Capstone Capital Group (capstonetrade.com)

Qualifying the Prospective Client

Request an Accounts Receivable Aging Report and copies of relevant forms used in the prospective client’s business such as a service contract or subcontract. Identify any additional items that Capstone needs at this point.

Make sure that the information needed by Capstone is as complete as possible. This will help to expedite the process of qualifying the prospect.

Schedule an initial phone call with the prospective client, Capstone, and yourself. Capstone will review the documentation and determine if the prospect is a qualified lead.

Beginning the Process

If the prospective client is a qualified lead, have the prospect fill out Capstone’s Application Packet and compile the items listed in the Documents Required Checklist. Forward the completed packet and additional documentation to Capstone.

It is important to follow up with the prospective client to make sure that the packet is completed and additional documentation is provided promptly to avoid delays in the due diligence and underwriting process.

Due Diligence

Upon receipt of the application packet, due diligence material, and due diligence fee, Capstone will begin legal documentation due diligence, account underwriting, and file a UCC-1 lien. Capstone will send an email directly to the new client acknowledging receipt of the due diligence fee and outlining any remaining due diligence items needed.

Proposal or Term Sheet

A favorable review of the application and supporting documentation will result in a proposal (or a Term Sheet if the transaction involves PO financing) being sent to the client.

Seamless Internal Transfer

A call is scheduled for the new client and Capstone to create a seamless internal transfer to make sure transactions will flow smoothly. Capstone will work with the client to ensure that the transmission of documents and modes of communication between the client and Capstone are ready for the first transaction.

Proposal Acceptance

The new client accepts the proposal (or signs and returns the Term Sheet for transactions involving a PO financing facility.)

Contract Preparation

Capstone prepares and sends contracts to the new client for signature for ongoing invoice factoring programs and PO financing facilities. This is not applicable for single invoice “spot” factoring transactions.

Signed Contracts

When the signed contracts are returned and the initial underwriting process has been completed, Capstone will be able to proceed with the first transaction.

Your first transaction with Capstone will flow smoothly when you follow these deal submission steps. Capstone has experienced personnel who will work with you and the prospective client to be sure the qualification, approval, and onboarding processes are handled professionally and efficiently every step of the way.

Capstone has the experience and capability to tailor factoring programs and PO financing facilities to meet your client’s working capital needs and help you close more transactions.

7 Common Mistakes Factoring Brokers Should Avoid

12:46 18 January in Blog, Broker Resources

As a broker in the factoring industry, you know that business development takes a lot of time and effort. So, when you find a potential client, you want to be sure you are prepared. It will save you and your client a lot of time and help to avoid mistakes that may result in lost business.

Don’t let the excitement of landing a prospect divert you from the preparation successful factoring brokers use to develop business.

Here are 7 common mistakes factoring brokers should avoid in order to close more deals.

Not Networking Enough

Prospecting for new clients by contacting leads from call lists, internet searches or other data mining techniques is time-consuming, tedious, and has a low probability of success. Make sure you are investing enough time networking to increase your chances of locating and developing clients.

Joining professional, civic and fraternal organizations gives you the opportunity to network with CPA’s lawyers, business executives and owners. Networking can result in leads and contacts for new business prospects. It helps you to learn about a prospect so the contact goes smoothly. Contacts developed through networking are more likely to be successful.

For additional discussion of networking, please read: Tips to Generate Lead Opportunities as a Factoring Broker

Using Outdated Technology

Many new business opportunities come in the form of start-ups and early-stage companies. These business owners are often tech-savvy entrepreneurs, who conduct their business and communications on the internet and smart phones. If you want to pursue these prospects, you should have a website and a social media strategy to attract and draw entrepreneurs to your services.

Factoring transactions are now in a digital and electronic format. You need to have the necessary technology infrastructure to effectively do business with clients and factors. Make sure you have up-to-date technology for electronic transactions and communication by voice, text and email.

Not Using a Script

When you connect with a prospect don’t just wing it when you make a presentation. Based on what you know about the client, prepare and practice a script for discussions. Whether you are on a Zoom conference, Skype or a phone call, a script will help the discussion flow more smoothly and ensure that you have covered all the important points. A script will also help you to avoid digressing and making statements that are not relevant to the factoring program and may confuse or mislead the client.

Clients appreciate well-organized presentations that don’t take more time than they should. Using a script will improve communication, reduce back and forth, and avoid unnecessary emails which slow down the due diligence and underwriting process.

Not Knowing a Prospective Client Well Enough

Not knowing a client well enough can leave you open to surprises in the due diligence and underwriting process that may result in the factor declining the business. Your time is wasted unnecessarily and it may affect your relationship with the factor and the client.

Prepare a thorough client profile and make sure that you understand the industry, business and client’s customers. Review the client’s financial strength, credit history and business reputation. A little homework will help you avoid misunderstandings and delays.

Not Speaking the Lingo

Like other forms of financing, factoring has terminology that has specific meaning. Not knowing the correct factoring terminology can create misunderstandings and problems with the client and factor. For example, confusing PO financing with factoring. These two financial products are very different and yet many brokers will use the terms interchangeably. You should understand and use the same terminology the factor uses as well as avoid using lending terms that do not apply in the context of factoring.

For additional insights on factoring terminology, please read: Common Terminology Used in Factoring

Create False Expectations

Statements like “When you factor your invoices, you can literally receive cash the same day you invoice”, or telling a client their customers can be automatically credit approved for a certain credit line can give the client false expectations. Misleading statements may cause confusion and strain your relationship with the client and the factor which can ultimately be a deal killer.

Avoid misleading statements on the turnaround of transactions and the length of due diligence and underwriting. Never provide a client with a proposal; that is the factor company’s responsibility. A factor will end up needing to restructure the program you presented, which further hinders the closing of the deal.

Handing Off the Transaction at the Improper Time

Speak your piece, then be quiet. Once you have found the client a suitable factoring company for placement, it’s important you hand the transaction off to the factor at the proper time. Many times brokers will remain overly engaged with the deal and some may even continue to shop it around to other funding sources. More parties involved can mean more confusion and it creates inefficient communication. This slows down the due diligence and underwriting process which can ultimately prevent the transactions from ever closing. Follow the factor company’s directive when they tell you “We got it from here.”


Avoiding these common factoring mistakes will save you time, increase your success in developing and closing deals, as well as enhance the relationships you have with your client and the factor. Putting in the time upfront to increase your knowledge and hone your skills will return the investment many times over.


Common Terminology Used in Factoring

14:48 10 January in Blog, Broker Resources

Invoice factoring is a widely-used form of working capital financing. Like all forms of financing it uses terminology, and this terminology has specific meaning when used in a factoring context.

If a client of yours is thinking of using factoring to increase their working capital and accelerate their cash flow, it will be easier for the client to understand the terms of the factoring agreement if the client knows the meaning of factoring terminology.

The following list of commonly used factoring terminology will help clients be more comfortable when they discuss a factoring agreement with factoring brokers and factor personnel.

Invoice Factoring: A form of debtor financing that businesses use to accelerate cash flow by selling their invoices to a third party (factor) at a discount. Businesses receive cash immediately for their unpaid invoices instead of waiting for their customers to pay.

Advance Rate: This is the percentage of the invoice amount that will be advanced. The percentage depends on certain criteria including the client’s customers’ credit quality and financial condition. The advance rate percentage is generally around 70% – 80% of the gross invoice amount.

Advance: This is the amount of money that the factoring company advances to a client when it buys an invoice.

Account Debtor:  A client’s customer.  This is the business that owes payment on a client’s invoice.

Customer Credit Limit: The maximum amount of credit applicable to a specific Account Debtor.  A client may be unable to receive an advance against an invoice if their customer’s credit limit has been reached.

Factoring Fee: The fee the factor charges to factor a client’s invoices. The fee is expressed as a percentage charged on the face value of the invoice.

Funding Period: This is the time period that begins when the factor purchases an invoice and ends when the Account Debtor pays the invoice.

Rebate: The invoice balance, fewer fees, that is deposited into a client’s account when the invoice is paid.

Factoring Agreement: The agreement between a client and the factor. It will cover all aspects of the program including fees, advance rates, credit limits, and other details.

Due Diligence: This is a review of a client’s and a customer’s financial backgrounds to determine eligibility for factoring.

Recourse Factoring: The client is responsible for paying the invoice if their customer fails to pay the factor.

Non-Recourse Factoring: The factor absorbs any credit losses that result from an Account Debtor not paying an invoice. Fees for non-recourse factoring are generally higher than recourse factoring, and credit limits may be lower.

Client: This is the business owner that wants to sell its invoices.

Notice of Assignment: A notice that is sent to an Account Debtor informing them that the invoice has been assigned to a factor.  It also informs the customer of the new address for payment.

Aging Report: A report that shows how long accounts receivable have remained outstanding.

Credit Terms: These are the terms of payment that appear on your invoice, such as Net 30 Days or Net 60 Days, which is payment due by 30 or 60 days after the invoice date.

Collections: These are payments the factor receives for invoices that were factored.

Lockbox: A bank cash management system designed to receive payments by mail and quickly deposit them into the factor’s account. Lockbox systems usually provide scanning of documents, online viewing and cash management systems.

Bad Debt: A bad debt is the unpaid balance of an invoice that is deemed to be uncollectible. A bad debt is either written off or referred to a collection agency or lawyer.

Credit Insurance: An insurance policy that covers the potential loss due to non-payment of an invoice.

The following table compares lending terminology with factoring terminology to make it easier to understand the context that factoring terminology is used in.

Loan Agreement Factoring Agreement
Loan Factoring Facility
Loan Amount Advance Amount
Lender Factor
Borrower Client
Interest Fee/Discount
Loan Payments Collections

Understanding factoring terminology will help your clients ask the appropriate questions when deciding which factoring company to work with and if factoring is the right solutions for their needs. Factoring can provide the additional working capital clients will need to finance the business opportunities that will arise in 2022 as the economy continues to grow.  Capstone has the experience and capability to tailor a factoring program to meet your client’s working capital needs.

White Paper: Funding the Cyclical Business – Post Pandemic

10:56 15 December in Blog, White Papers

The Dodd-Frank banking regulations are now eleven years old and have been fully implemented by the government regulators. The impact of Dodd-Frank on the small business community, as we predicted in 2014 and 2018, has significantly reduced the amount of bank lending to small business owners. Small business loans from banks are only made available in small amounts assuming that the borrower is willing to pledge all of their business and personal assets to the bank. These loans generally range from $50,000 to several hundred thousand dollars and are highly dependent on the quality and value of the small business owner’s balance sheet. Loans of this size are generally sufficient for small businesses to maintain their existing operations, but during times of growth or expansion, these businesses will find these facilities lacking very quickly.

The small business lending void created by Dodd-Frank has been filled by third-party hedge funds and commercial finance companies like Capstone. These multi-billion-dollar hedge funds tend to lend to smaller business
lenders who can aggregate and service a portfolio of small business loans and direct lending to larger operating companies where the loan size can be $50,000,000 or higher.


Read the Full White Paper Here

White Paper: Infrastructure Investment & Jobs Act – Contract Opportunities and Funding Analysis

12:54 30 November in Blog, White Papers

Capstone has created this white paper to assist our clients and associates to benefit from the types of projects that have been authorized by the Infrastructure and Jobs Act (IIJA) which was signed by President Biden on November 15, 2021.

Since the IIJA passed the Senate in July, many of our clients have been receiving contacts from general contractors who are approved, federal contractors. Their excitement about these opportunities, after having suffered through a difficult business environment as a result of COVID-19, faded as delays in getting the IIJA approved by the House stretched from weeks to months. Now that it has been signed into law, our clients and associates need to understand what spending has been approved and how that funding may create contract opportunities for their businesses.

Unlike the last major infrastructure projects funded during the Obama Administration, the Biden Administration has pledged that IIJA funding will actually go towards much-needed infrastructure, including roads and bridges, highways, trucking, pipelines, hazardous materials handling, broadband, modernization of public transportation, the power grid, water systems, and environmental remediation.

As you read this white paper you will see the allocation of dollars by state and by the categories listed above. We urge our readers to avail themselves of the opportunities that the IIJA creates.

We expect funding to trickle down into contract authorizations by the end of February 2022 to the middle of March.

Capstone is hopeful that this brief summary of the IIJA will allow you to take advantage of the opportunities presented to rebuild your business or expand it further.

Download White Paper Here:

Why Sureties Should Work With Factors

09:59 04 November in Blog

The word subordination is one of the scariest words in the world for payment and performance bond issuers. It is understandable that sureties who are paid anywhere from 1% to 5% of the bond value take on enormous payment and performance risk relative to the premium earned. It is normal for the surety to want to keep as much collateral as possible to secure their position and not risk a loss on a bond.

Factors often require a subordination agreement when dealing with a surety because statutorily, the surety has a first lien on the contractor’s accounts receivable. In order to factor the account, the Factor needs first lien rights or clean title to purchase the account.

The first reaction of the surety is to say “no,” because they know that the subordination reduces their collateral, thereby increasing the risk of loss. This is a conventional way of looking at the problem. However, the surety is not taking into account the problems that Dodd-Frank legislation has created for the construction industry. In the past, banks were happy to issue lines of credit to contractors. However, those contractors that have earnings and profits that vary from year to year are no longer welcome at their local bank. Dodd-Frank classifies lines of credit to these contractors as “risky.”

Banks that once issued lines of credit to contractors have spoiled sureties. As long as there had not been a prior bond claim there would not be a UCC-1 filing against a potential borrower. The bank would issue the line of credit and all would be well. All would be well until such time that the first bond claim comes in and a chunk of the bank’s collateral, which they have already leveraged, is no longer theirs. Because of the bond claim, the most a bank can do is accelerate

payments or keep all the accounts receivable collections until such time that the shortfall is collected. Depending on the size of the claim and the circumstance this can be resolved quickly or could cause the contractor to fail. Most likely the contractor will fail because other trust fund payments go unfunded as the bank pays itself back. This creates a whole host of new problems for the bank and the contractor.

If the surety has an open mind, working with the right Factor actually reduces their risk of loss. The Factor is injecting capital into a project that is causing the material men and subcontractors to be paid in a timely manner. A Factor that operates in the construction industry typically collects lien waivers in exchange for each payment made to a material man or subcontractor. Any time this happens, the surety’s liability decreases because the lien releases indicate that the material supplier and/or subcontractor have been paid and cannot file a lien or make a demand against the payment bond, thereby reducing the surety’s exposure under the payment and performance bond.

From experience, a surety will tell you that they conducted their due diligence on a contractor and that they issued the payment and performance bond because the contractor had adequate liquidity. That may be true, but once the due diligence process is complete, one never knows how many other bids have come in where no bond is required. This dilutes the working capital of the contractor and increases the potential for loss to the bonding company should the contractor take funds from job one to fund job two. This is not an uncommon phenomenon in the contracting world.

Capstone employs funds control, which ensures that all of those with lien rights get paid in a timely manner. In the alternative, we can fund the surety’s funds control provider to effectuate the same result.

It is our belief that when a surety subordinates to the right factoring company like Capstone, there is a smaller likelihood that their payment or performance bond will have a claim made against it. As Capstone purchases invoices and effectuates payment during the course of a job, the surety benefits each time purchase of an account occurs, and those participants with lien rights are neutralized through the exchange of a payment for a lien waiver.

Tips to Generate Lead Opportunities as a Factoring Broker

13:00 25 October in Blog, Broker Resources

New business development is crucial to being a successful factoring broker. It’s essential to keep your business pipeline full and growing. Generating lead opportunities and convincing others of the value of working with you is the first step to keeping your book of business flowing.

Focus on Your Market Niche

From construction trades to consumer products, from manufacturers to staffing companies, from suppliers/ distributors to publishing, invoice factoring can quite literally be applied to any industry and everything in between.  Choosing your niche and focusing in on it essentially sets the stage for your brokerage as well as future business relationships.  Focus on companies that need a knowledgeable, professional intermediary to help them obtain alternative financing solutions. Companies that may be less sophisticated financially, and do not have the depth of in-house financial expertise to take advantage of invoice factoring.

Leverage Your Knowledge, Experience, or Connections 

Do you have knowledge, experience, or connections in certain industries? These touchpoints could be through education, work experience, family, or friends. Leverage your touchpoints to identify lead opportunities.

Utilize Networking Opportunities

Professional and social networks can be an excellent source of lead opportunities. It’s usually better to use networks to promote yourself instead of direct selling. The network connections you establish can become ambassadors for your brand who have exposure to many more lead opportunities than you can reach by yourself.

Some examples of networks you can develop to identify leads include:

Industry Associations

Many industries have associations to promote member interests. They often have different categories of membership or affiliation. This allows vendors and service providers to participate in association activities. They can be great opportunities to network with prospective clients. Certain associations will sometimes sponsor presentations on products and services that are important to members including financing and alternative lending solutions.

Professional Groups

Like industry associations, professional groups such as CPAs, lawyers, CFOs and engineers belong to groups, which may allow service providers some form of affiliation to benefit the members. Better yet, you may qualify to be a member of these groups yourself based on your education or work experience.

Personal Associations

Alumni associations, fraternities/sororities, religious organizations, social clubs, and hobby groups can all be sources of lead opportunities. Associations can be a strong connection for building networks.

Chamber of Commerce

Membership in your local Chamber of Commerce is a great vehicle for meeting and networking with CPAs, lawyers, bank loan officers, business leaders, and prospective clients. Chamber membership usually has a cost, so see if you can attend as a prospective member to determine if it makes sense for you.

Angel Investors

Angel investors provide capital to start-ups and early-stage companies. There are angel investor groups around major metropolitan areas and they typically hold regular meetings where small business entrepreneurs “pitch” the opportunity to invest in their company. These meetings can be great opportunities to meet prospective clients, and angel investors who can be a source of business referrals.


The Service Corp. of Retired Executives (SCORE) provides assistance and mentoring to small business entrepreneurs. SCORE chapters hold seminars and workshops on topics that benefit small business entrepreneurs including financing. Be sure to attend these events to network with prospective clients and SCORE counselors.


Small Business Development Centers (SBDC) are usually partnerships between the Small Business Administration (SBA), area universities, and local government business development agencies. SBDC’s provide training and support to small business entrepreneurs. They also hold educational workshops for business owners. SBDC’s can be a great place to meet prospective clients, and network with SBDC staff.

Data Mining

A vast amount of information is available on various industries in databases. Some information may be available free to members of industry associations, but most data must be purchased. The data may be available for download to your computer or by access to a cloud-based website.

You can use various commercially available software solutions to manipulate the data in many ways to help you “mine” for lead opportunities.

Develop Your Online Network

Many new businesses today are run by “tech-savvy” people, who rely on the internet to communicate and run their businesses. It is essential to develop your online network to identify lead opportunities.


A website is your headquarters in the digital world. An online office where you meet and greet lead opportunities, and tell them about you and the services your business offers.

The landing page on your website is where potential leads land after being directed from an ad you’ve posted on the internet, or from a link in your social media posts. It provides an opportunity to showcase your business and convert the visitor into a lead.

Social Media

Social media websites such as LinkedIn, Facebook, Twitter, and Instagram offer additional opportunities to present your business and convert visitors to lead opportunities. Visitors can click on a link to your website for additional information.


A webinar is a live discussion online of topics of interest to prospective clients. Your audience needs to sign up to attend your webinar, so you can follow up on lead opportunities afterward.

Use your online network to provide information of interest to prospective clients. It is a much easier and more efficient way to generate lead opportunities. There are many ways to identify lead opportunities. Use your creativity to identify the approaches that will work best for you and for more information on developing as a broker, visit our broker resources.

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