Get Working Capital at Competitive Rates - Accounts Receivable Financing at The Receivables Exchange

Nabbr Inc., listed by comScore as the ninth largest provider of video content on the web, provides unique high velocity and high volume video content to an exclusive distribution network of 120 websites. Currently, their videos get more than 5 million views per day and 200 million views per month. Having carved out an enviable niche in the online entertainment space, Nabbr works with Fortune 500 media companies such as FOX, ABC, CBS, HBO, Showtime, EMI, Island Def Jam and national advertising agencies who control the marketing spend for major brand names, all of whom are trying to create brand awareness among the ever-elusive 13-34 year old Gen Y audience.

Growing Pains Create Working Capital Challenges
As a former Investment Banker who worked on M&A transactions and capital raises, President and COO Matt Minoff is all too familiar with the working capital challenges facing small and midsize businesses (SMBs). As a high technology media start up, to stay competitive in the sector, slow growth is not an option. To remain a viable player, constantly meeting – and exceeding – aggressive growth is the minimum requirement. And, having sufficient working capital is imperative to be competitive in ad sales. “We need to have steady cash flows to stay innovative and we must be able to expand our distribution network and continue to target the Gen Y audience more efficiently,” comments Mr. Minoff. “Our growth requires us to use capital – and our cash flow – as a competitive weapon to progress and grow more rapidly than our rivals. We had significant revenue coming in and sales were increasing, yet we still found ourselves struggling to maintain sufficient liquidity.”

As a growing media start up with a unique product and niche market, Nabbr was able to secure venture funding from a seed investor. But, to sustain their competitive advantage, they knew they needed to find a way to smooth out their monthly cash flow. Like most SMBs, their largest source of working capital was tied up in outstanding invoices and Nabbr found themselves under tight liquidity constraints, hampering their ability to take advantage of growth opportunities. “We were waiting to collect on receivables which forced us to push out our payables. Without steady cash flow we were unable to take on new projects or increase our product development and enhancements,” he added.

Disappointing Exploration of Financing Options
Recognizing the need to better manage their working capital and gain access to capital, they began to explore short-term financing options. “I knew the credit environment was tough, but we needed an affordable strategy to fulfill our working capital challenges to help us bridge the gap between our receivables and payables,” he remarked.

As expected, it was difficult for the fast growing start up with only 3 years operating history to secure traditional financing - even more so given the current credit environment. They considered factoring, but decided that while factoring would solve their immediate cash flow needs, it was too restrictive. “Factoring was too rigid of a solution for what we needed. We didn’t like the idea of having to sell all of our A/R. Not having the ability to control our receivables and maintain our customer relationships was too great a risk for us,” he continued.

Poised for Growth -Uncovering the TRE Solution
Nabbr joined The Receivables Exchange in May of 2009 and in less than three months significantly improved their cash flow position, allowing it to become more aggressive in its growth. And, by developing a reliable trading history and leveraging the receivables of their higher credit quality Fortune 500 customers, it has been able to lower its cost of capital and create a purchase appetite amongst Buyers on the Exchange. As a result, they have been able to improve their working capital position and accelerate their cash flow. “The ease and speed with which we were able to obtain capital was impressive,” said Matt. “The Receivables Exchange provides Nabbr with the access to the cash that we needed to pursue larger projects and to generate more sales.” For Nabbr, The Receivables Exchange allows them to remain prepared for a variety of competitive opportunities.

“The Exchange provides the flexibility and control you just can’t find elsewhere. It’s quite simple - if I need it, I use it – all on my own terms. It’s a quick and strategic way to raise capital without having to sell all of our receivables and potentially sacrifice my customer relationships,” he commented.

For Nabbr, having predictable cash flow is the name of the game. Now, they have the foresight to make strategic investments, commit to new projects and realize optimal revenues, all of which ultimately lead to growth and success.

For companies growing at an exponential rate, it is critical to be able to access affordable funds immediately, with minimal requirements. The Receivables Exchange serves as an online capital marketplace for businesses to turn their invoices into cash, giving them the opportunity to attain new levels of growth. Learn how to become a Seller on the Exchange. Find out more about Nabbr Inc.