Hi DF,

Most of you know..... We are Seacoast Business Funding, a division of Seacoast Bank. We offer flexible working capital solutions in the forms of factoring and asset based lines of credit. We finance companies in a variety of industries nationally. We are unique in the market as we are bank owned, but can still work with challenged companies or companies in transition.

Yesterday I was invited to a private meeting of business owners in Florida. The meeting was put together by a very well known advisory group that focuses on business owner challenges. These meetings are very informative as you get to learn a lot about what business owners are thinking and what keeps them up at night. Companies range from $5Mil in revenue to $450Mil in revenue.

One of the subjects that came up was international trade. Many of the business owners are manufacturers and/or distributors that rely on foreign suppliers for components or manufacturing. Their goods are made off-shore, shipped to the US, and sold to customers in the US. Lead time for goods can be anywhere from a couple of weeks to several months depending on complexity of manufacturing and shipping method.

Many of these business owners are uncertain of the current environment which leads to some restless nights. The economic confidence has risen over the last several years and demand for products from large buyers is fierce. The challenge many face it that the large buyers want great products, cheap, and fast. If you cannot deliver, they will buy elsewhere. Trade talks have thrown a monkey wrench into the mix. Most foreign suppliers have no terms or terms on a short leash. The uncertainty of what may ultimately happen with international trade has foreign vendors tightening their terms with buyers in the US. This creates a working capital issues as most large buyers are stretching terms with US businesses from N30 to N60 or even N90. When a business owner has high demand from big customers on extended terms and foreign suppliers on little to no terms, a solid working capital solution is a must.

Many of the owners in the meeting had bank facilities they have used for years. The steep growth curve from buyer demand and the working capital gap between accounts payable and accounts receivables has many asking for larger facilities from their bank. Some are lucky enough to get the facility they need. Others are forced to seek alternatives such as factoring or non-bank asset based lines of credit.

Best,

Kevin

PS: The uncertainty of what will happen with trade has some banks cautious about lending more to companies that buy from foreign suppliers.