Ramard, Inc.

Improving Cash Flow Remained Challenging

David Menard, DVM and Jeff Ramey founded Ramard, Inc. in 2007 to provide nutritional supplements to enhance performance in equine sports and therapeutic products to improve quality of life for small animals. Ramard has experienced rapid growth and has become one of the most well respected firms in the industry. Ramard customers include some of the nation’s largest distributors of equine and small animal products and Veterinarians around the country.

“The hardest thing to do as a small business is to maintain the necessary cash flow to get your product into distribution,” said Dr. Menard. For Ramard, Inc., this challenge was exacerbated by the heavy cash requirements of product development and production and the extended payment terms the company’s customers were requiring, creating a significant liquidity gap and strain on growth. “Lack of cash flow can slow down an entire business line. Once we design and develop a product, it goes to the manufacturer to be produced. Of course, the manufacturers won’t release the final product until they receive payment. If we can’t pay in advance, our product will not get sold through our distribution network. This continuous cash flow conflict was a serious constraint to ramping our business.” For many small businesses, these cash flow constraints can make it extraordinarily difficult to replenish the inventory necessary to keep a business on pace with growth opportunities.

Limited Financing Options for Small Business

Ramard had relied on several sources of funding, including costly self-funding, business credit cards and a small line of credit (LOC) from a local bank. However, none of those sources provided him with the amount of capital required to carry the inventory necessary to satisfy product demand. The company’s LOC was fully funded with a significant amount of A/R and inventory pledged. “With our limited history, that was all the bank was willing to lend us.”

With bank financing tight and given the high cost and terms of other lending options, they were starting to worry that they would never be able to take their business to the next level. “We won’t do factoring. It is too expensive and they would have required us to sell all of our receivables, leaving us without the ability to maintain collections with our customers,” remarks Dr. Menard. “While factoring might have provided us the access to cash we needed to grow, I just wasn’t willing to give up control and take on the level of risk it required.”

Affordable Capital on Your Terms. Online Receivables Marketplace Provides Access and Flexibility

When a friend recommended The Receivables Exchange, a relatively new auction-style marketplace for selling receivables, David was optimistic. Ramard became a Seller on the Exchange in December 2009 and has been posting auctions every month since, increasing their advance amount and driving down their cost of capital over time by building up a successful transaction history. “With most financing options, the entire process can be costly, overwhelming and feel very impersonal. The Exchange not only makes it affordable and easy but, interestingly enough, they make the entire process – from application and registration to remittance and reporting – virtually seamless, and with exceptional customer service. They made a point to know my business on a personal level and guide me through my initial trades, so that I could use the Exchange to create the best auctions for my business.”

Having the ability to set their own terms gave Ramard the flexibility to manage their cash flow. “I can’t afford not to use the Exchange. The money it costs us to auction A/R on the Exchange is very affordable, especially considering that I can now direct that capital back into product development and sales. We make the discount back ten times over on increased production just from the sale of one auction,” said David.

“Before the Exchange, we would launch a product and wait 90-120 days before we were paid. By selling our invoices on the Exchange we’ve reduced our DSO to one day on average. Now, we’ll be able to reduce our distribution back log from 21 days to as little as 7 days,” he added. “We can now shift our focus from just running our daily operations to finally being able to execute on our growth potential, which over the next year could reach 25%.”

Every day, more businesses are facing tighter lending requirements and higher costs with traditional financing. Small and midsize businesses are turning to The Receivables Exchange’s online auction marketplace to turn their invoices into cash, allowing them to improve liquidity and fund growth. Learn how to become a Seller on the Exchange and turn your receivables into cash. Gain access to the capital you need to grow your business on your terms. Find out more about Ramard, Inc.