1 Panel 2: Emerging and Alternative Sources of Credit Kevin Catalano, Loan Portfolio Manager, Albany-Colonie Regional Chamber (No PowerPoint) Joe Landy, Senior Loan Officer, Community Loan Fund (No PowerPoint) Derek Deneckla, Founder, Food Shed Investors NY, Slow Money NYC (PowerPoint Included) Brian Weiner, VP - Business Development, Bibby Financial Services (Midwest), Inc. (PowerPoint Included) Erica Dorn, Entrepreneur + Food Business Consultant (No PowerPoint)
2 Kevin Catalano Director of Commercial Lending Albany-Colonie Regional Chamber
3 Joe Landy Senior Loan Officer Community Loan Fund
4 Derek Denckla Founder Food Shed Investors NY & Slow Money NYC
5 ` Funding Small Food & Farm Enterprise Access to Capital: Food + Beverage Enterprises Empire Plaza, Albany June 24, 2014
6 Office: 232 East 11 th Street, NY, NY What is it?
7 WHAT IS SLOW MONEY? IDEA MOVEMENT NETWORK ORGANIZATION BOOK PRINCIPLES GATHERINGS CHAPTERS & PROJECTS Present
8 SLOW MONEY PRINCIPLE?
9 WHAT IS SLOW MONEY? Mission To build a diverse network focused on aligning money and values through investment in local, sustainable agribusinesses in the New York City foodshed.
10 Organizational Relationships Slow Money, Inc. Non-Profit Corp Slow Money NYC Fiscal Project Foodshed Investors NY Agreement NE Foodshed Finance Alliance Network Farm City Fund MOU
11 Investment Process: Screening FOODSHED INVESTORS SELECTION CRITERIA #1: Local? #2: Sustainable? #3: Small? #4: Viable?
12 Investment Process: Screening: Is it sustainable? Degrees of Separation from Soil? 0º Production & Harvest 1º 2º 3º 4º 5º Distribution Process & Pack Market & Brand Deliver Retail 6º You
13 Investment Process: Is It Viable? Capital Required $100M $75M $50M $25M $10M $5 $2M $1M $750K $500K $250K $100K $50K $10K $0.00 concept proof of concept prototyping product development Funding Stage entering market nearing profit profitable expansion year year 3 year 4 year 5 year Time Horizon for Business Development
14 Investment Process: Screening CONTACT Derek Denckla Network Director Web: SlowMoneyNYC.org
16 Brian Weiner VP Business Development Bibby Financial Services, Inc.
17 Factoring 101
18 Factoring: Is a flexible funding and collections service which releases cash early that is tied up in outstanding customer invoices. Factoring is not a loan.
19 Sell product Generate Invoices The cycle Continues The Factoring Process Send Invoices to Factor Factor Sends Your Company the balance less fee Factor Verifies Invoices Your Customers Pay Factor Factor advances up to 90% of face value of invoices
20 Factoring has been around for a long time. Ancient Greece Around 444 B.C.
21 The Factoring Industry started in the USA in the early 1900 s. US Factoring Market share in 2011 was over $88 billion. 40% of the factoring volume came from the Northeast.
22 Who factors? Companies that are in turnaround or bankruptcy. Companies with double digit growth. Companies with seasonal needs. Start ups. Companies that have suffered a financial setback. Exhausted line of credit.
23 The Numbers (how it works) Day 1 Invoice Amount Advance (80%) $ (delivered and billed) $ (normally the next day) Day 30 Check Received $ (posted daily) Advance re-paid ($800.00) Transfac s fee (2%) ($ 20.00) (fees calculated on gross) Rebate $ Original Advance $ Total Proceeds $980.00
24 Traditional (notification recourse) Non recourse Non notification (confidential) Hybrid Are there different types of factoring?
25 Factoring Points? You can factor even if you have a loan from bank. Factoring is not treated as debt on a balance sheet. Factoring frees up your AR department as the factor chases and collects outstanding invoices. Manufacturers use factoring to purchase raw materials better b paying faster. As compared to providing a 2% 10 days payments to your customers factoring is very cost effective.
26 Agriculture Food & Beverage Transportation Manufacturers (light & automotive) Temporary Staffing Apparel Start-up Businesses Specialty Industries covered
27 Brian Weiner Vice President of Business Development
29 Erica Dorn Entrepreneur & Food Business Consultant