TEN Magazine

22 LIQUID CAPITAL ALTERNATIVE FINANCE INC. By Pat Rediger I t's not unusual for a rapidly expanding business to experience a temporary shortfall in cash flows, making it difficult to cover expenses or take advantage of a new business opportunity. Unfortunately, strong sales and a well-established customer base aren't always sufficient justification for traditional banking sources to extend credit lines. The impact of restricted working capital can have serious consequences, including business failure. Liquid Capital Alternative Finance (LCAF) Principal/ Partner Gregg Martin cites the experience of his father, Dan Martin, the other Principal/Partner at LCAF, who once landed a $3-million contract for the manufacturing company he owned at the time. Dan thought he had won the lottery, but to fulfil the contract, he needed to purchase $1 million of fabric. Full of optimism, Dan met with his banker — who politely laughed him out of his office. Turns out, Dan didn't fully meet the highly- structured requirements for a standard bank loan. He found an alternate solution, but the lesson learned wasn't soon forgotten. It's this type of real-world experience that provides Gregg and Dan Martin with a unique perspective on the difficulties owners of small and medium-sized businesses sometimes face in accessing working capital to support growth. In most instances, Gregg and Dan have "been there, done that." They built a successful international manufacturing company from the ground up and operated it for more than 25 years before selling it to a Fortune 500 company. Following the sale, Gregg developed another successful business that engineered and manufactured robotic automation solutions for labor intensive operations. Wanting to use their diverse experience to help other businesses, the Martins recently established LCAF, a franchise within the Liquid Capital Corp. (LCC) network. Based in Winnipeg, the company offers a broad range of working capital and trade finance solutions, including asset-based lending, accounts receivable factoring, purchase order financing and export financing. LCC is part of the $100-billion North American factoring Alternative financing options for growing businesses sector that advances money on a company's receivables. Factoring is frequently used to provide financial support to companies experiencing dramatic growth. "This type of alternative financing isn't contingent on how much equity the business has, the business's financial ratios, or the business's overall financial strength. This financing option is based strictly on the strength of the company's receivables," Gregg says. "Under this program, the business would receive an initial funding of 75 per cent or more of the value of their outstanding accounts receivable, with the balance being paid when the invoices are collected. The initial funding can be used to cover the cost of goods sold and other expense obligations." This financing solution also helps reduce the administrative workload for the business, since LCAF assumes full responsibility for the accounts receivables. "We assume, manage and collect the financed invoices and provide clear, accessible reporting to keep our clients up-to-date on the process," Gregg says. "We're the best partner they can have; we don't get involved in their business decisions, we bring all the money to the table and unlike some lenders, we don't require an equity position." Ridgeline Manufacturing LLC, a manufacturer of recreational products, approached one of Liquid Capital's franchisees in Minnesota and discovered the benefits of a factoring program. "When cash flows are tight, many traditional lenders offer 'pressure' instead of solutions," says Ridgeline co- owner Nick Newman, adding that there may also be several levels of management involved in the decision- making process. "When time is of the essence, this can be a nerve- wracking experience. At Liquid Capital, I know the people I'm dealing with are the decision makers and that the funding process will be addressed in a timely manner. That in itself provides a high level of comfort." ❚ To find out how Liquid Capital Alternative Finance Inc. can help your business, contact Gregg Martin by phone at 204-478-1799 (office), 204-291-5706 (cell), or by e-mail at gmartin@liquidcapitalcorp.com. Liquid Capital Alternative Finance (LCAF) Principal/ Partner Gregg Martin provides a broad range of working capital and trade finance solutions. Photo by Darcy Finley

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