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

Growing Legal Technology Solutions Provider Strapped for Working Capital
Like most industries, the legal sector has been implementing innovative technologies to help it drive efficiencies throughout and that have in many instances transformed the way laws are argued and cases are won. Visual Evidence / E-Discovery provides state-of-the-art electronic discovery products and solutions to help their national law firm clients and corporations prepare compelling cases for trial. By staying ahead of the curve as an early adopter of technology, they have become one of the most reputable and rapidly growing technology solutions providers for electronic discovery solutions nationwide, specifically in the internet searching and data archiving tools arena. The company serves a deep roster of distinguished national law firms such as Kirkland & Ellis and Miller Martin and large corporations such as Coca Cola, American Greetings, Eaton Corp and GoodYear.

After 22 years of strong growth, Dan Copfer, President of Visual Evidence / E-Discovery (VE) found the company in unfamiliar territory. The economic recession had forced their customers to extend payment terms – even longer than usual – and they began to struggle to maintain a strong cash position. “In our industry it can be difficult to be paid on 30 day terms, under normal circumstances. We bill the law firm who then bills the client who then could turn around and bill the insurance company. It’s a lengthy process with many delays, but they always pay. Our customers are good for payment – without question – but this is inherently an industry with long payment terms” explained Dan. And, as a result of banks continuing to restrict credit, the company saw its commercial line of credit pulled at a time when it needed it the most to take advantage of the tremendous growth.

Banks Not Lending – Where to Turn?
Unfortunately, even though they had an established growth record, their bank was unwilling to extend credit. And, as a primarily service-based business, they were limited by having little to no tangible hard assets to meet increasing bank collateral requirements. After going through the same exhaustive and cumbersome process at five other banks, they found themselves in the same situation: a growing company with strong financials without access to much-needed growth capital. They briefly considered equity funding, but were not willing to give up part of the company. “Slow pay, is by far one of our greatest challenges. If we can’t find the capital we need to protect against extended payment terms or take advantage of growth opportunities – and the increased cash needs that come along with them – then we’re unable to maintain the day-to-day operational requirements or grow the business. For a high-tech company such as ours to stay competitive it’s imperative that we have access to a flexible source of capital to maintain our cash position and reinvest into technology when the need arises,” says Dan.

Access to Capital When You Need It, How You Need It
After struggling to keep the company’s cash flow positive, Dan found relief, flexibility and dependability with The Receivables Exchange. In October 2009, VE began selling select receivables of some of its best customers on the Exchange in order to gain access to capital at a lower cost. And, by participating in regular monthly auctions, the Company has been able to build up its transaction history, which has enabled it to drive down its cost of capital significantly. “Our auctions sell so fast that I’m still amazed at how easy the whole process works – it really is cash flow at your finger tips. And, the best part is that we receive the capital the next business day, wired directly into our bank account – and it’s completely hassle-free,” he states.

 “The Receivables Exchange has helped us tremendously. We have been using the Exchange as a critical component of our working capital optimization model. Now, we can reinvest those funds into the business, smooth out our cash flow and refocus on the continued growth of our company,” said Dan.

 “Our growth is strictly based on our ability to access capital. Now, we can take advantage of opportunities to grow our business and increase our market share knowing that we’ll have access to funding when we need it – on our terms. We’ve been able to maintain existing long-standing client relationships by extending their payment terms without sacrificing cash flow or our customer relationships.”

“Being a Seller on The Receivables Exchange, we’re able to grow the business, hire and train new employees and look to expand into other markets, as the economy slowly recovers” he says.
 
Every day more small and mid-sized businesses are taking control of their working capital management and bolstering their operations by selling their outstanding invoices on The Receivables Exchange. Learn how to become a Seller on the Exchange and turn your receivables into cash and gain quick access to the capital you need to grow your business on your terms. Find out more about Visual Evidence / E-Discovery LLC.
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