Hennessey Capital leverages the receivables of business to business companies to increase cash flow. This is accomplished through various financing mechanisms including factoring and asset-based lending. Hennessey Capital can provide factoring of accounts receivable where a client can pick and choose the level of invoices or customers they want to finance. Our asset based lines of credit are formula based, where we lend up to 85% of accounts receivable and 50% against inventory. Ultimately, Hennessey Capital will provide a client with an advance against the value of their receivables, less a service fee, providing the customer with cash sooner, which shortens the overall payment cycle.
Hennessey Capital does not offer venture capital or angel investment. This type of financing is best suited for early stage companies. Hennessey Capital’s working capital financing is best suited for second stage companies that are post-revenue (has sales) and pre-bankable (does not yet qualify for traditional bank financing.) However, Hennessey Capital is happy to put our network capital to work for entrepreneurs and connect them to an early-stage investor that may be able to assist.
The most significant difference between the two types of financing is the level of support. Factoring provides an additional layer of assistance through credit, collection and A/R management services. In factoring, the lender is directly involved with the customers in the monitoring of invoices and payments. Asset-based lending more closely resembles a traditional bank loan in its level of reporting and support. With an asset-based line of credit, the lender relies on the client to provide reporting of its accounts receivable, as well as its overall financial performance, and the lender has limited involvement with the customers.
Business to business service, manufacturing and distribution companies in the following industries: automotive parts manufacturing, industrial services & supply, engineering services, professional staffing, IT consulting, transportation services, security services and government suppliers.
Real estate, insurance-funded health care programs, construction and any type of consumer-based businesses do not complement Hennessey Capital’s working capital offerings.
Hennessey Capital works with clients that have sales but do not yet qualify for traditional bank financing. If your company is relatively new and has receivables and/or purchase orders, Hennessey can help. Hennessey Capital looks beyond the limited credit history of new businesses and examines the ability for the company to produce their product and/or service and the credit strength of the business’s customer base.
No. Factoring is a very common tool for growth financing for a very wide range of companies. Sophisticated customers routinely assign their vendors payments to factors and asset based lenders. It helps if you inform your customer before they receive the request for assignment of payments that you are working with a factor that will be providing growth financing for your business. Factoring offers businesses credit, collection and A/R management services and well as an additional level of monitoring and support. Our support services allow owners to focus on the most important task – running their business.
Hennessey Capital’s asset-based finance solutions help small and medium-sized businesses establish a financial track record to move towards a traditional bank loan. We also have a vast network of relationships in the banking community to connect companies with a lender and loan officer to meet their needs.