Accounts Receivables Financing Case Study - TiaDel Secure Technologies
Selling accounts receivable improves DSOs
 |
TiaDel Secure Technologies, Inc.
Founded: 2003Industry: Technology – Enterprise IT security Prior short-term financing solution: Line of credit Trading activity to date: Recurring trades of Fortune 500 companies |
Managing Growth While Managing Liquidity
In spite of being in the throes of the worst credit crisis in recent history, there are actually some small and mid-sized businesses realizing tremendous growth. For CEO David Lazar, breaking TiaDel Secure Technologies into the competitive enterprise IT security market has been a battle well worth fighting as he has met the challenge with remarkable success. TiaDel counts many Fortune 500 companies as its customers, as well as some of the nation’s largest public educational institutions. Of course, with its success has come the growing pains most small companies feel as they start to welcome larger customers into the fold. While it is certainly exciting to have such notable brands on the roster, large customers can present numerous challenges to a small business. For most, extended payment terms are without a doubt the most challenging – especially in today’s credit-strapped environment. Managing growth while managing liquidity can often prove to be one of the most difficult aspects of small business life.
Reduce DSOs; Optimize Cash Flow, Reduce Cost Of Capital
As a company that develops customizable security products, providing superior customer service is as important to delivering a top-notch product. Fortunately for TiaDel, its products and services are best in breed and have earned the company a solid reputation for performance and reliability. As a result, TiaDel has been fortunate to partner with such industry leaders as PGP and Siemens. “Our products provide a unique value proposition. We have worked hard to earn a good reputation among our peers and customers; Maintaining our reputation while continuing to grow the business is our primary focus,” remarks David. “We’re faced with tremendous opportunities to grow; however, we know that it’s imperative that we manage our growth properly if we want to be around for the long-term – especially in these uncertain times. If we don’t stay on top of our cash flow, all the great demand that we’re seeing now won’t matter. The more we looked into it, the merits of accounts receivable financing became very clear: the ability to reduce our DSOs (days sales outstanding) and actually monetize our receivables is the perfect way to gain access to growth capital.”
On The Receivables Exchange, Buyers evaluate the credit quality of the account debtors and their payment history, typically extending better bids to Sellers with better quality debtors. For TiaDel, the ability to auction the invoices of their best-paying Fortune 500 customers, allows it to effectively leverage the higher credit rating of it’s best paying customers and reduce its cost of capital. On the Exchange, Sellers can basket a single or multiple receivables to sell them in competitive auctions over the real-time marketplace so that they can adjust their auction parameters according to the bid activity, lowering auction parameters to drive up the competitive bidding. “Since joining the Exchange in March, we’ve already completed two auctions, both closing at the Buyout Price on the terms that we selected, giving us the funds that we needed within 24 hours. With the high quality nature of our customers, using The Receivables Exchange is an attractive proposition.”
Capital On Your Terms. When You Need It, How You Need It
The Exchange allows Sellers (and Buyers) to participate only as they see fit. Unlike the all or none structure of many other financing options, the Exchange lets Members finance only those receivables they see fit. Executives such as David can raise capital as needed, with no additional commitments or requirements on future receivables. “For us, seasonality dictates that we will have the need for extra liquidity at recurring periods throughout the year. With the flexibility the Exchange provides, I’m able to upload and monetize a basket of invoices at those times, and quickly raise the cash that I need to get me through that time period. I’m only as committed as I choose.”
Because David often monetizes receivables from the same customers, he has begun to develop a transaction history on the Exchange and TRE Buyers have responded by being on the lookout for auctions posting from TiaDel, eager to get in on the auction.
There When You Need It
TiaDel is well on its way to developing an enviable track record on TRE, the benefits of which translate into consistently competitive rates and the confidence in knowing that capital will always be available whenever he has the need. Because the Exchange works with a global network of accredited capital providers, small businesses don’t have to worry about the health of one financial institution providing them financing. With the backdrop of the current credit crisis, the confidence that The Exchange brings has been a powerful partner to TiaDel and hundreds of other small and medium sized businesses.
In spite of being in the throes of the worst credit crisis in recent history, there are actually some small and mid-sized businesses realizing tremendous growth. For CEO David Lazar, breaking TiaDel Secure Technologies into the competitive enterprise IT security market has been a battle well worth fighting as he has met the challenge with remarkable success. TiaDel counts many Fortune 500 companies as its customers, as well as some of the nation’s largest public educational institutions. Of course, with its success has come the growing pains most small companies feel as they start to welcome larger customers into the fold. While it is certainly exciting to have such notable brands on the roster, large customers can present numerous challenges to a small business. For most, extended payment terms are without a doubt the most challenging – especially in today’s credit-strapped environment. Managing growth while managing liquidity can often prove to be one of the most difficult aspects of small business life.
Reduce DSOs; Optimize Cash Flow, Reduce Cost Of Capital
As a company that develops customizable security products, providing superior customer service is as important to delivering a top-notch product. Fortunately for TiaDel, its products and services are best in breed and have earned the company a solid reputation for performance and reliability. As a result, TiaDel has been fortunate to partner with such industry leaders as PGP and Siemens. “Our products provide a unique value proposition. We have worked hard to earn a good reputation among our peers and customers; Maintaining our reputation while continuing to grow the business is our primary focus,” remarks David. “We’re faced with tremendous opportunities to grow; however, we know that it’s imperative that we manage our growth properly if we want to be around for the long-term – especially in these uncertain times. If we don’t stay on top of our cash flow, all the great demand that we’re seeing now won’t matter. The more we looked into it, the merits of accounts receivable financing became very clear: the ability to reduce our DSOs (days sales outstanding) and actually monetize our receivables is the perfect way to gain access to growth capital.”
On The Receivables Exchange, Buyers evaluate the credit quality of the account debtors and their payment history, typically extending better bids to Sellers with better quality debtors. For TiaDel, the ability to auction the invoices of their best-paying Fortune 500 customers, allows it to effectively leverage the higher credit rating of it’s best paying customers and reduce its cost of capital. On the Exchange, Sellers can basket a single or multiple receivables to sell them in competitive auctions over the real-time marketplace so that they can adjust their auction parameters according to the bid activity, lowering auction parameters to drive up the competitive bidding. “Since joining the Exchange in March, we’ve already completed two auctions, both closing at the Buyout Price on the terms that we selected, giving us the funds that we needed within 24 hours. With the high quality nature of our customers, using The Receivables Exchange is an attractive proposition.”
Capital On Your Terms. When You Need It, How You Need It
The Exchange allows Sellers (and Buyers) to participate only as they see fit. Unlike the all or none structure of many other financing options, the Exchange lets Members finance only those receivables they see fit. Executives such as David can raise capital as needed, with no additional commitments or requirements on future receivables. “For us, seasonality dictates that we will have the need for extra liquidity at recurring periods throughout the year. With the flexibility the Exchange provides, I’m able to upload and monetize a basket of invoices at those times, and quickly raise the cash that I need to get me through that time period. I’m only as committed as I choose.”
Because David often monetizes receivables from the same customers, he has begun to develop a transaction history on the Exchange and TRE Buyers have responded by being on the lookout for auctions posting from TiaDel, eager to get in on the auction.
There When You Need It
TiaDel is well on its way to developing an enviable track record on TRE, the benefits of which translate into consistently competitive rates and the confidence in knowing that capital will always be available whenever he has the need. Because the Exchange works with a global network of accredited capital providers, small businesses don’t have to worry about the health of one financial institution providing them financing. With the backdrop of the current credit crisis, the confidence that The Exchange brings has been a powerful partner to TiaDel and hundreds of other small and medium sized businesses.
For more information on TiaDel Secure Technologies, Inc., visit www.http://www.iqwest.com.
