The Receivables Exchange Reports 466% Growth in 2010
The Receivables Exchange, the real-time online marketplace for working capital financing, announced today that receivables trading volume on its market-based platform increased 466% in 2010. This nearly five-fold growth indicates that businesses are embracing the Exchange’s online working capital marketplace as a proven method of managing cash flow. The company also announced that businesses continue to realize reductions in their cost of capital of 30% after six months of trading1, and are getting 99-98 cents on the dollar for their receivables, on average. The Receivables Exchange’s market-based auction model gives businesses the most efficient, affordable pricing for their commercial receivables, and the company’s consistent growth shows this innovative form of financing has reached the mainstream. Companies small and large – and in a wide range of industries – are using the Exchange as a flexible, affordable source of working capital, and more are joining every day.
“While many other companies are struggling to access capital, I have access to all of the funds I need, and have been able to lower my cost of capital 50% by using the Exchange,” said Brent Reynolds, president of the Mad Bomber Company, a Virginia-based outdoor clothing manufacturer. “When you can decrease your - DSO (days sales outstanding) from 45 days to two, it can be transformative for a midsize business like ours. With this new funding source, I’m on track to grow my company 50% this year.”
Since the marketplace launched, over 1,400 small and midsize businesses have signed up to sell accounts receivable on The Receivables Exchange. The average auction on the Exchange consists of seven invoices and totals $56,000. More than 50% of trading volume comes from account debtors with publicly rated debt, of which more than 94% is investment grade. The Exchange has Sellers in 49 states and 45 industries. Industries with high activity levels included manufacturing, wholesale and distribution, professional services, business support, media and technology. While the shortest auction on record closed in only three seconds, most auctions close in as little as 24 hours, with Sellers receiving their funds the next business day. Ninety-nine percent of all auctions posted to The Receivables Exchange are purchased and funded.
“The Receivables Exchange has completely changed the way I finance my company,” adds Reynolds. “I’m happy to say my business is in the process of hiring new employees, something we wouldn’t have been able to do without affordable capital.”
“The remarkable growth on the Exchange shows that there is tremendous appetite among small and midsize businesses for access to affordable capital, and that appetite will certainly grow in 2011, as the economy improves and more businesses recognize the benefits of online receivables financing,” said Justin Brownhill, co-founder and CEO of The Receivables Exchange. “We are anticipating another record-breaking year for our online working capital marketplace, with an increasing number of small and midsize businesses lowering their cost of capital significantly by selling their receivables on the Exchange.”
Benefits of accounts receivable financing through The Receivables Exchange include:
- Access: The Exchange gives businesses fast, assured and continuous access to the working capital they need, so they can stop worrying about cash flow and focus more on growth and success.
- Speed: Businesses can turn invoices into cash in as little as 2 business days, shortening DSO and speeding up the Cash Conversion Cycle.
- Affordability: Get as much as 99-98 cents on the dollar for your receivables, and lower your cost of capital by 30%, on average.
- Flexibility: Get cash for a single invoice or all your invoices. Use it as much or as little as you need, for financing that’s virtually “on demand.”
- Fewer restrictions: The Receivables Exchange does not require you to notify your customers that you’ve auctioned their invoices. The Exchange does not require personal guarantees, all-asset liens, or credit limits. There are no hidden costs or monthly minimums.