Experience matters in the nurse staffing factoring business. It takes years in the industry to learn the ins and outs of what’s possible. PRN Funding brings a level of experience and factoring expertise that lets us complete deals that others have given up on. We recently came across one such situation.
Problems Within the Factoring Deal
We received a call from another factoring company about a client who they just weren’t able to help. The client owns a nurse staffing agency and was looking to factor invoices from a nursing home. At first glance, it seemed like a straightforward deal that echoed our everyday client.
There was a bit more to the situation that turned this from a routine deal to one worth writing about. As promising as the lead was, the other factor determined there were just too many obstacles in the way to make a deal. They knew the deal wasn’t dead though, and that if anyone could get the owner factored, it was PRN.
#1- The Debtor Issue
The first issue wasn’t with the client; it was with the debtor. The invoices he was trying to factor were from a nursing home. Because nursing homes are notoriously slow in paying their invoices, many factors will avoid dealing with them.
#2- The Loan Issue
The second obstacle between us and a successful funding was a bit harder to overcome. Like many small businesses, the owner had taken on a loan with the Small Business Association. Business loans are nothing new, but this particular loan involved a UCC lien that would take priority before ours. This situation has been becoming increasingly more common with the number of Economic Injury Disaster Loans (EIDL) issued throughout the COVID-19 pandemic. While not a deal breaker, the loan and subsequent lien would make funding a bit more difficult.
#3- The Bad Debt Issue
Should this deal go through, the SBA wouldn’t be the only one ahead of us on the UCC lien list. Prior to the SBA loan, the owner’s nurse staffing agency had factored invoices with another company. Although he wasn’t currently factoring with them, there was still some outstanding debt, which meant the UCC filing was still in place and would need to be addressed before anything could move forward.
In Factoring, Relationships Matter
As stated before, the nursing home as a debtor issue wasn’t much of a problem. Though invoices to nursing homes may not be the quickest to pay, PRN’s experience let us quickly clear this hurdle. We’ve worked with invoices from many nursing homes in the past, including the one in which the client in this story was looking to factor. Our previously established relationship gave us the confidence to move forward quickly.
For the other issues, some outside the box thinking was in order. After all, even if we were able to pay off the debt owed to the client’s original factor, we’d still be behind the SBA on the lien list, and it’s imperative that PRN be first. PRN’s long history in the business has led to many connections with fellow factors. One such relationship is with the factor atop the client’s UCC list. It was time to utilize our relationship and see what could be done.
Making the Deal
PRN’s factoring experts began by reaching out to the client’s original factor. By this point, it had been a long and slow process of paying back the bad debt, so the factor was interested in getting things done. We knew that getting them paid was key to making the deal possible. We reached out and were able to get two things done:
- PRN was able to pay off the bad debt by issuing an over-advance to the client
- In exchange, we were added to their assignment of factoring agreement, as well as the UCC filing
In solving the bad debt issue in this manner, we were able to make the SBA loan issue irrelevant. Not every factor is capable of pulling off deals like this. It was only by leveraging our experience, expertise and relationships that we were able to get the client funded.
Wins All Around
A good factoring deal is a win-win situation. A great deal is a win-win-win. This deal was next level.
- The client was able to grow his nurse staffing business by factoring invoices
- His original factor was able to collect on debt they may have given up on
- The factor that introduced us to the client is getting paid for brokering the deal
- PRN has once again established ourselves as the factoring experts that get deals done
Has your company faced any factoring challenges like this? If the obstacles preventing a deal seem too large to overcome, reach out to PRN. We specialize in making the impossible look easy, so let us take on the hard work while you collect broker fees. Get started by filling out this form or giving our factoring experts a call today!