Referrals to CFG: A Win-Win-Win Solution

In today’s challenging economic environment, more companies are finding their working capital cycles squeezed tighter, which makes it harder for them to qualify for traditional bank financing. As a result, many banks are looking for resources they can refer these companies to, like commercial finance companies that specialize in asset-based and accounts receivable loans.

Commercial Finance Group would like to be just such a resource for you. The specific reasons for making these types of referrals will differ with each company, but here are a few common ones identified by some of our referral sources:

1. Say “no” nicely. Declining a loan application can be an unpleasant and time-consuming experience. By offering clients a financing alternative, rather than just saying “no,” you build goodwill with clients, and may be able to retain (or gain) their other banking business (like deposit accounts, for example). You don’t want to just send your clients across the street to the competition.

2. Strengthen existing client relationships. By offering clients a solution when other banks were unwilling or unable to do so, you show your value as a trusted business advisor. When clients need other services, they will likely come to you first.

3. Help clients grow by offering them a more flexible credit facility. We base the growth of our clients’ credit lines on the growth of their accounts receivable, their knowledge and experience within their industry, and the quality of their customer base.  We know rapid growth poses challenges for small businesses, so we structure our services to improve the chance of success.  We can also take seasonal inventory lines into consideration.

4. Increase your efficiency. Rather than spend a lot of time with businesses you know will never qualify for a traditional bank line of credit, you can refer them to us once you see they are not a fit for your organization. Our goal is to help our clients become bankable which will enable them to return to you.

5. Build a better client. With our consultative approach and A/R management services, we can help improve a company’s financial condition while ensuring sound credit policies and procedures. 

Referral Success Stories

Bruce Leicht, a commercial lender with Central Bank of Georgia in Macon, Ga, tells the story of a trucking company whose accounts were frozen by a large bank when they ran into some cash flow problems. “They couldn’t make payroll, so they called me for help,” he says.

The company’s primary collateral was in receivables, which made it hard for Leicht to make a traditional bank loan. “So I got Mike Parrish at CFG involved,” he explains. “Mike structured a working capital line using their receivables as collateral, which is now a factoring line. This basically saved their business.”

In addition, the client moved all of its checking and deposit accounts to Central Bank. “CFG’s service has been impeccable—I’ve received a number of comments from this client about how pleased they are with CFG and how professionally everything was handled.”

Paul Stroube, a commercial lender with Santa Barbara Bank & Trust in Santa Barbara, Ca., says that his bank works with many growing companies that often don’t have enough capital to qualify for traditional bank financing. “We have referred a number of our clients to CFG for financing, while we have maintained the deposit relationships and provided other banking services.”

One recent example was a sporting goods manufacturer in which one partner bought out the others and then struggled to recapitalize the business by himself due to excessive leverage. “Terry Gubatan at CFG was able to help him accomplish this.”  The manufacturer has now been able to double his business by meeting the competitive demands of his customers.

Formal or Informal Relationship

How a referral relationship is structured is up to you—informal or formal, which could include mutual referral fees, participations with your bank, and ongoing training programs for your staff.

In short, CFG would like to be your preferred vendor when it comes to A/R financing situations. To discuss a referral arrangement in more detail, please contact a Business Development Officer near you at 800-757-5185.

Download the CFG Cash Flow Manual

To learn more about CFGs accounts receivable management programs, please visit www.cfgroup.net or contact us at (800) 757-5185.