AccountsReceivable Funding for businesses

NEW ORLEANS, November 19, 2009 - As the economy starts to show veiled hints of a recovery, America’s small and midsize businesses (SMBs) remain cash-constrained with many turning to alternative sources of capital to meet their short-term financing needs. As a result, the practice of selling receivables is showing signs of becoming a growth category as more mainstream companies turn to the age-old financing tool in its new online incarnation. The Receivables Exchange, the world’s first online marketplace for real-time trading of accounts receivable, announced today that its transparent, competitive-bidding marketplace has seen companies of all sizes and from  more than 40 industries contribute to its nearly 200% quarter-over-quarter growth.

“We hear every day from healthy, profitable businesses with tremendous growth potential that are still being shut out and cannot get capital from traditional funding sources,” said Justin Brownhill, co-founder and chief executive officer of The Receivables Exchange.  “Without access to capital, these companies are being forced to halt their growth plans or, even worse, shutter their otherwise thriving businesses. Our quarterly data continues to show the tremendous pent up demand for an open and efficient capital marketplace that allows companies to get capital when and how they need it – on their terms.”

The Receivables Exchange Q3 Receivables Cash Flow Index

* Source: Wall Street Journal, average length of Days Sales Outstanding (DSO’s) of U.S. companies under $500m in revenues.

 In addition, an August 2009 survey conducted by the Credit Research Foundation highlights the impact that the credit crisis is having on U.S. businesses, forcing them to shift their focus from driving revenue to preserving cash flow, as indicated below:

•    90% report that the economy has had a direct negative effect on their business, up from 77% in November 2008
•    44% report that they have shifted their focus on revenue and market share to cash flow and profitability, up from 30% in November 2008
•    81% say their customers are experiencing tightening of bank financing, up from 68% in November 2008
•    65% report that they are experiencing a slowdown in customer payments

To overcome these challenges a growing number of companies are turning to receivables financing to optimize their working capital management. Below are just a few of the benefits of accounts receivables financing through The Receivables Exchange:

•    Increased Liquidity - Access to cash in as little as 24 hours rather than the current 50+ day payables process to fund operations
•    Complete Financing Control - Sellers set all auction parameters. If a bid does not meet the Seller’s parameters, the Seller is not required to sell
•    Lower Cost of Capital - Competitive real-time bidding by multiple Buyers drives down the cost of capital
•    Less Restrictive – No personal guarantee; traditional lending institutions have restrictive covenants and liens on collateral, which can limit a business’s spend flexibility
•    Key Financial Benefits – Decrease Days Sales Outstanding (DSO), increase liquidity ratios, enhance ROE

Every day more businesses are turning to The Receivables Exchange to improve and regain control of their cash flow on their own terms.  The Exchange marketplace provides a timely and efficient solution for small and midsize businesses to source the capital necessary for growth and to more effectively manage their working capital. Learn more about how to improve cash flow and finance accounts receivables.

About The Receivables Exchange
The Receivables Exchange is the world’s first online marketplace for real-time trading of accounts receivable.  Changing the landscape of small business financing, The Receivables Exchange provides a new dimension in working capital management.  The Exchange connects a global network of accredited institutional investors (Buyers) to the nation’s millions of small and midsize businesses (Sellers) in search of capital to grow.  Buyers get direct access to an $18 trillion new investable asset; Sellers gain access to a new competitive working capital management solution by having their receivables bid on in real-time by multiple Buyers.