UNITED CAPITAL                         TMINTELLIGENT.WORKING.CAPITAL.         Emerging Business Symposium        1
Emerging Business SymposiumDECOSIMOWednesday, February 22, 2012Chattanooga, TennesseeMark Mandula, Managing PartnerMa...
Emerging Business Symposium   3
Emerging Business Symposium   4
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Emerging Business Symposium   6
Improving Cash Flow and Managing       Accounts Receivables           Emerging Business Symposium   7
5 parts to our Presentation• Small Business  Environment• Improving Cash  Flow• Managing Accounts  Receivables• Factoring•...
Emerging Business Symposium   9
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Small Business Optimism Index110105                                                                                       ...
Emerging Business Symposium   22
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Single Most Important Issue                                January 2012                                               Cost...
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Emerging Business Symposium   37
Emerging Business Symposium   38
Emerging Business Symposium   39
Emerging Business Symposium   40
Emerging Business Symposium   41
Emerging Business Symposium   42
Few Universal Truths..       Emerging Business Symposium   43
Regardless currency or location           Emerging Business Symposium   44
Emerging Business Symposium   45
Cash is KING• Nothing else  matters• Not profit• Lack of cash will  eventually lead to  failure                Emerging Bu...
Cash is KING    Emerging Business Symposium   47
Emerging Business Symposium   48
Emerging Business Symposium   49
Rarely managed assertively..           Emerging Business Symposium   50
Emerging Business Symposium   51
Emerging Business Symposium   52
Effective cash management..                                 Difference                                  between          ...
Emerging Business Symposium   54
Emerging Business Symposium   55
Theme of my presentation• Cash flow is THE most  pressing concern SME’s• Simplest form• Movement of money in  and out of y...
Cash Flow• Is THE most  pressing  concern for  small and  medium sized  businesses  [SME’s]            Emerging Business S...
Cash Flow• Simplest form  it is the  movement of  money in and  out of your  business             Emerging Business Sympos...
Cash Flow• It is THE life  blood of every  business             Emerging Business Symposium   59
Cash Flow• Primary  indicator of a  businesses  health              Emerging Business Symposium   60
Cash FlowEffect is real, immediat e and if [when] mismanaged totally unforgiving            Emerging Business Symposium  ...
Emerging Business Symposium   62
Cash FlowMUST be monitored, pro tected, controll ed and put to work             Emerging Business Symposium   63
Emerging Business Symposium   64
4 Simple Principles Cash is not a given. It is not a passive, inevitable outcome of your hard work. It does not arrive wi...
4 Simple Principles Cash management is as much an integral part of your business cycle as production or planning.        ...
4 Simple Principles You need accurate and timely information to be successfulMore on this later                  Emergin...
4 Simple Principles You need some luck in order to be successful.Or the less you leave to chance, the higher your chance...
Able to answer these…• How much cash does  my business have?• How much does it  generate?• When should I get it?• When do ...
Advantages of managing cash• Know where cash is tied up• You can spot bottlenecks  and act to reduce their  impact• You ca...
Many don’t ever do it25% SME’s never confirm credit terms with clientsNO excusesTwo benefits; avoid depressing downside...
Emerging Business Symposium   89
Cash conversion period• 3 Key parts• 1. Inventory conversion;  time to transform raw  materials into product out  the door...
Working Capital Cycle• [1 + 2] – 3• Trick is to• Minimize 1 and 2  and then  maximize 3• Never ending  battle             ...
Typical AR conversion process          Emerging Business Symposium   92
Key to accelerating cash flow is to• Shorten the Accounts  Receivables conversion  period• Look at each step and  ensure t...
Define Cash Flow Cycle InflowsOutflowsManagementPROFIT is not Cash Flow            Emerging Business Symposium   94
Inflows• Money in including• Receipts from sales• Collect AR• Proceeds of a loan• Interest on  investments• Shareholder  i...
Outflows• Money out including• Purchase finished  goods for resale• Purchase raw  materials• Pay salaries, expenses• Purch...
Accelerating cash flow• Quicker you  collect, the quicker  you can invest to  make more• Key is to streamline  ALL element...
Client purchase decision + order• No clients = no cash  to manage• Make the ordering  process  quick, precise and  easy• D...
Credit Decision Process• Efficient• Systematic• Never ending  process must be used• It’s not where you  start, it is where...
Simple questions to ask…• Do you methodically check all  new clients before the first order?• Do you periodically review  ...
Simple questions to ask…• Do you assess credit  risk carefully?• Is the data accurate  and constantly  refreshed?• Are you...
Simple questions to ask…• In a sales  negotiation it is  professional, not  “antiselling” to be  upfront about terms  of p...
All salesmen are optimists!          Emerging Business Symposium   103
Credit Departments are not.          Emerging Business Symposium   104
Emerging Business Symposium   105
Rely on data, not opinions.          Emerging Business Symposium   106
Simple questions to ask…• Put terms clearly on  Application Form• On “Welcome Letter”  restate terms and  conditions• Orde...
Set up New Client Correctly• Expect client to  request credit; be  ready!• Credit Application  Form• Determine credit  lim...
Invoicing• Design an invoice that is  better than any coming  into your company.• Keep it  brief, clear, simple.• Get rid ...
Collection Process• Don’t feel guilty  about collecting a  debt.• You are owed for  goods or services  provided.• Start th...
Collection Process• Time is money and is  your worst enemy.• Be professional at ALL  times.• If you have laid the  ground ...
Ask these questions• How long does it take us  to invoice? Can this be  speeded up?• Monthly statements; can  this be spee...
Ask these questions• Do you have a  collection procedure?  Is it followed?• Are you firm but fair  with your approach?• Do...
http://www.youtube.com/watch?v=x4juGkQ1Ks4           Emerging Business Symposium       114
Collection Process• Time is money and is  your worst enemy.• Be professional at ALL  times.• If you have laid the  ground ...
Do a Cash Flow Budget• Month to  month, daily, weekly.• Predict cash flow gaps and  allows you to take steps  before a cri...
Cash Flow Budget   Prepare sales forecast.   Project anticipated cash inflows.   Project anticipated cash outflows.   ...
Plan ahead.• Many sources of capital.• Bank, private  investors, family, etc.• Most are not “user  friendly” to start ups....
Emerging Business Symposium   119
Emerging Business Symposium   120
Factoring can be possible solutionSell Accounts Receivables for small discountDoes not fit all casesMake sure it is a p...
Emerging Business Symposium   122
Emerging Business Symposium   123
Emerging Business Symposium   124
Emerging Business Symposium   125
Emerging Business Symposium   126
United Capital Funding                      April 1997                      National practice;                       ban...
Emerging Business Symposium   128
Emerging Business Symposium   129
Firm and Industry Niche firm exceptional              Audited Financial  track record in domestic             Statements...
Millions           $300                                       Purchased AR                                YTD 2011 through...
Emerging Business Symposium   132
Emerging Business Symposium   133
Emerging Business Symposium   134
Emerging Business Symposium   135
Emerging Business Symposium   136
Our Practice Focus“In good times, trusted client partnerships will fill your sails with wind; in a difficult economy, the...
Emerging Business Symposium   138
Emerging Business Symposium   139
Service-Profit Chain                     Internal Service Quality                     Employee Satisfaction             ...
Emerging Business Symposium   141
What is Factoring?Accounts Receivable factoringPurchase invoice advancing % of the face value of the invoice [usually 80...
What this is not…..NOT a loanNOT based on net worth or cash flowNOT lender “last resort”Time in business is not import...
Emerging Business Symposium   144
Client Attributes                    $0 to $25 Million                    Any stage lifecycle                    Limite...
Emerging Business Symposium   146
Economic Lifecycle     Emerging Business Symposium   147
Needs change over time                       Opportunity Inception     Launch    Grow                  Harvest          Ev...
Emerging Business Symposium   149
Geographic Client Locations                                          14%                                                  ...
Client Locations by State                                              MT                                              0% ...
Current Portfolio                                  18 37                                                        17        ...
Primary Industries FundedStaffing37% portfolioAll kinds             Emerging Business Symposium   153
Primary Industries FundedManufacturing18% portfolio            Emerging Business Symposium   154
Primary Industries Funded                        • Distribution                        • 11% Portfolio         Emerging Bu...
Primary Industries FundedTechnology9% portfolio                Emerging Business Symposium   156
Primary Industries Funded                        • Service                        • 17% Portfolio         Emerging Busines...
Extensive Government ARFederal, State, Local, OtherQuasi GovernmentUniversitiesSchool Districts              Emerging ...
Emerging Business Symposium   159
Client duration                                             21%        29%                                                ...
Client Funded FICO710700                              Percentage change YTD = 4.6%                                        ...
Number of Invoices120,000                                                                                                 ...
Average Invoice Size $$3,000.00$2,500.00$2,000.00$1,500.00$1,000.00 $500.00      $-            2000 2001                  ...
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Professional Services Accounts Receivable  Management Working Capital Professional, turnkey AR  monitoring Access to C...
Why are we different?                      No term                      Minimums                      Start up fees    ...
Emerging Business Symposium   180
Recent MilestonesWill Have Funded $1.5 Billion Cumulatively since formation in 1997Financially solid, stableSeveral ind...
Professional Fees• Simple, JIT Model• 5 day fee  FUNDING, not invoice  date to collection @  lockbox• Wire / ACH fees• No ...
Emerging Business Symposium   183
Professional Fees• Determined by:• Size of AR• “Pedigree” clients• Concentration vs.  diversification• FICO score• Credit ...
Professional fees are….                       Less than credit card                        merchant fees                 ...
Emerging Business Symposium   186
Professional Services Accounts Receivable  Management Working Capital Professional, turnkey AR  monitoring Access to C...
Many ways we can help..                       • Credit                         Information                       • Credit ...
Emerging Business Symposium   189
First Tennessee Alliance       Emerging Business Symposium   190
Emerging Business Symposium   191
Facts vs. MythsThe perception of our industry is the single largest misconception we encounterOur website is an educatio...
Facts vs. MythsMyth: Factoring is used businesses in “bad shape” or Fortune 500 firmsFact: Used by all sized businesses...
Facts vs. Myths                   Fact: used more                    than ever, start up                    to mature    ...
Fact vs. MythsAoccdrnig to rscheearch atCmabrigde Uinervtisy, it                Myth: If you factor,deosnt mttaer in waht...
Facts vs. MythsFact: Actually can cement relationshipAbility prequalify credit limit criticalAssertively sell more; ave...
Facts vs. Myths                   Myth: If you                    factor, offend or                    alienate clients  ...
Standard Inquiry StepsPersonal credit on Principal(s)Comprehensive Background checkCorporate, debtor searchUnderwrite...
There are no stupid questions          Emerging Business Symposium   199
We are only a click away         Emerging Business Symposium   200
We will respond quickly…        Emerging Business Symposium   201
PartnershipWe succeed when clients successfulKey to success is partnership with clients, partners,Continue operate with...
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UNITED CAPITAL                         TMINTELLIGENT.WORKING.CAPITAL.         Emerging Business Symposium        206
UNITED CAPITAL                     TMINTELLIGENT.WORKING.CAPITAL.     Emerging Business Symposium        207
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Matt, here is the last draft of the presentation. Look at it and let me know what you think.

Thanks, Mark

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  1. 1. UNITED CAPITAL TMINTELLIGENT.WORKING.CAPITAL. Emerging Business Symposium 1
  2. 2. Emerging Business SymposiumDECOSIMOWednesday, February 22, 2012Chattanooga, TennesseeMark Mandula, Managing PartnerMatt Perkins, Relationship Executive Emerging Business Symposium 2
  3. 3. Emerging Business Symposium 3
  4. 4. Emerging Business Symposium 4
  5. 5. Emerging Business Symposium 5
  6. 6. Emerging Business Symposium 6
  7. 7. Improving Cash Flow and Managing Accounts Receivables Emerging Business Symposium 7
  8. 8. 5 parts to our Presentation• Small Business Environment• Improving Cash Flow• Managing Accounts Receivables• Factoring• Question and Answers Emerging Business Symposium 8
  9. 9. Emerging Business Symposium 9
  10. 10. Emerging Business Symposium 10
  11. 11. Emerging Business Symposium 11
  12. 12. Emerging Business Symposium 12
  13. 13. Emerging Business Symposium 13
  14. 14. Emerging Business Symposium 14
  15. 15. Emerging Business Symposium 15
  16. 16. Emerging Business Symposium 16
  17. 17. Emerging Business Symposium 17
  18. 18. Emerging Business Symposium 18
  19. 19. Emerging Business Symposium 19
  20. 20. Emerging Business Symposium 20
  21. 21. Small Business Optimism Index110105 January 2005 to 2011 103.7 103.7 102.5 103.7 Seasonally Adjusted 1986 = 100 101.5 101.4 101.1 101.2 100.9 101.1 100.8 100.8 100.7100 99.8 100 100.1 99.7 99.4 98.9 98.5 98.2 98 98.1 97.3 97.6 97.2 97.3 96.7 96.5 96.8 96.3 95.9 96 96.295 94.6 94.4 94.5 94.1 93.8 92.9 92.9 93.2 92.6 92.2 92 91.8 91.5 91.7 91.9 91.1 91.2 90.9 90.690 89.6 89.3 89.2 89.1 89.3 89 89 89.990.2 y = -4.77ln(x) + 110.0 88.988.6 88.8 88.7 88.9 88.2 88.3 88 88 88.1 88.1 87.8 87.9 87.5 86.886.5 86.8 R² = 0.63185 85.2 84.1 82.6 8180 2010 2009 2006 2007 2008 2011 2005 Emerging Business Symposium 21
  22. 22. Emerging Business Symposium 22
  23. 23. Emerging Business Symposium 23
  24. 24. Emerging Business Symposium 24
  25. 25. Emerging Business Symposium 25
  26. 26. Emerging Business Symposium 26
  27. 27. Emerging Business Symposium 27
  28. 28. Emerging Business Symposium 28
  29. 29. Emerging Business Symposium 29
  30. 30. Emerging Business Symposium 30
  31. 31. Emerging Business Symposium 31
  32. 32. Emerging Business Symposium 32
  33. 33. Single Most Important Issue January 2012 Cost Insurance Quality of Labor 4% 5% 21% Competition Larger 4% Cost of Labor3% Financing/Interest Cost 8% 20% Other 5% Inflation 7% Taxes 23% Red Tape Poor Sales 33
  34. 34. Emerging Business Symposium 34
  35. 35. Emerging Business Symposium 35
  36. 36. Emerging Business Symposium 36
  37. 37. Emerging Business Symposium 37
  38. 38. Emerging Business Symposium 38
  39. 39. Emerging Business Symposium 39
  40. 40. Emerging Business Symposium 40
  41. 41. Emerging Business Symposium 41
  42. 42. Emerging Business Symposium 42
  43. 43. Few Universal Truths.. Emerging Business Symposium 43
  44. 44. Regardless currency or location Emerging Business Symposium 44
  45. 45. Emerging Business Symposium 45
  46. 46. Cash is KING• Nothing else matters• Not profit• Lack of cash will eventually lead to failure Emerging Business Symposium 46
  47. 47. Cash is KING Emerging Business Symposium 47
  48. 48. Emerging Business Symposium 48
  49. 49. Emerging Business Symposium 49
  50. 50. Rarely managed assertively.. Emerging Business Symposium 50
  51. 51. Emerging Business Symposium 51
  52. 52. Emerging Business Symposium 52
  53. 53. Effective cash management.. Difference between success and failure Emerging Business Symposium 53
  54. 54. Emerging Business Symposium 54
  55. 55. Emerging Business Symposium 55
  56. 56. Theme of my presentation• Cash flow is THE most pressing concern SME’s• Simplest form• Movement of money in and out of your business• Life blood for every business• Primary indicator of a businesses health Emerging Business Symposium 56
  57. 57. Cash Flow• Is THE most pressing concern for small and medium sized businesses [SME’s] Emerging Business Symposium 57
  58. 58. Cash Flow• Simplest form it is the movement of money in and out of your business Emerging Business Symposium 58
  59. 59. Cash Flow• It is THE life blood of every business Emerging Business Symposium 59
  60. 60. Cash Flow• Primary indicator of a businesses health Emerging Business Symposium 60
  61. 61. Cash FlowEffect is real, immediat e and if [when] mismanaged totally unforgiving Emerging Business Symposium 61
  62. 62. Emerging Business Symposium 62
  63. 63. Cash FlowMUST be monitored, pro tected, controll ed and put to work Emerging Business Symposium 63
  64. 64. Emerging Business Symposium 64
  65. 65. 4 Simple Principles Cash is not a given. It is not a passive, inevitable outcome of your hard work. It does not arrive willingly. Rather it has to be tracked, chased and captured. YOU must control the process and there is always room for improvement. Emerging Business Symposium 65
  66. 66. 4 Simple Principles Cash management is as much an integral part of your business cycle as production or planning. Emerging Business Symposium 66
  67. 67. 4 Simple Principles You need accurate and timely information to be successfulMore on this later Emerging Business Symposium 67
  68. 68. 4 Simple Principles You need some luck in order to be successful.Or the less you leave to chance, the higher your chance of success.“Murphy” was an optimist. Emerging Business Symposium 68
  69. 69. Able to answer these…• How much cash does my business have?• How much does it generate?• When should I get it?• When do it get it?• How much cash do I need to operate?• Do have accurate data? Emerging Business Symposium 69
  70. 70. Advantages of managing cash• Know where cash is tied up• You can spot bottlenecks and act to reduce their impact• You can plan ahead• You can reduce your dependence on banks and save money• You can identify surpluses that you can invest• YOU ARE IN CONTROL and make informed decisions Emerging Business Symposium 70
  71. 71. Many don’t ever do it25% SME’s never confirm credit terms with clientsNO excusesTwo benefits; avoid depressing downside of cash crisesAnd you get a commercial edge on all of your transactions Emerging Business Symposium 71
  72. 72. Emerging Business Symposium 89
  73. 73. Cash conversion period• 3 Key parts• 1. Inventory conversion; time to transform raw materials into product out the door• 2. AR conversion; time to convert AR into cash in the door• 3. Payable deferral period; time between purchase/usage and payment• Math is simple: [1+2] – 3 = cash conversion period Emerging Business Symposium 90
  74. 74. Working Capital Cycle• [1 + 2] – 3• Trick is to• Minimize 1 and 2 and then maximize 3• Never ending battle Emerging Business Symposium 91
  75. 75. Typical AR conversion process Emerging Business Symposium 92
  76. 76. Key to accelerating cash flow is to• Shorten the Accounts Receivables conversion period• Look at each step and ensure that it is efficient and effective as possible Emerging Business Symposium 93
  77. 77. Define Cash Flow Cycle InflowsOutflowsManagementPROFIT is not Cash Flow Emerging Business Symposium 94
  78. 78. Inflows• Money in including• Receipts from sales• Collect AR• Proceeds of a loan• Interest on investments• Shareholder investments Emerging Business Symposium 95
  79. 79. Outflows• Money out including• Purchase finished goods for resale• Purchase raw materials• Pay salaries, expenses• Purchase fixed assets• Pay principal and interest• Pay taxes Emerging Business Symposium 96
  80. 80. Accelerating cash flow• Quicker you collect, the quicker you can invest to make more• Key is to streamline ALL elements of the cash conversion process• Incremental improvement Emerging Business Symposium 97
  81. 81. Client purchase decision + order• No clients = no cash to manage• Make the ordering process quick, precise and easy• Do you ever try to buy from yourself• Post office vs. McDonald’s Emerging Business Symposium 98
  82. 82. Credit Decision Process• Efficient• Systematic• Never ending process must be used• It’s not where you start, it is where you finish• The real world Emerging Business Symposium 99
  83. 83. Simple questions to ask…• Do you methodically check all new clients before the first order?• Do you periodically review existing client credit?• Do you do a full recheck when significant increase in volume of existing client occurs?• Do you check trade references?• Is there a single person responsible for supervising credit?• Ensuring prompt collections?• Is someone accountable if the credit gets out of hand? Emerging Business Symposium 100
  84. 84. Simple questions to ask…• Do you assess credit risk carefully?• Is the data accurate and constantly refreshed?• Are your credit terms very clear? Are you sure?• Apply the 80/20 rule Emerging Business Symposium 101
  85. 85. Simple questions to ask…• In a sales negotiation it is professional, not “antiselling” to be upfront about terms of payment.• How can you do this strategically? Emerging Business Symposium 102
  86. 86. All salesmen are optimists! Emerging Business Symposium 103
  87. 87. Credit Departments are not. Emerging Business Symposium 104
  88. 88. Emerging Business Symposium 105
  89. 89. Rely on data, not opinions. Emerging Business Symposium 106
  90. 90. Simple questions to ask…• Put terms clearly on Application Form• On “Welcome Letter” restate terms and conditions• Order Acknowledgement state terms + conditions• Invoice show due Date to reach you by• Make it easy to pay Emerging Business Symposium 107
  91. 91. Set up New Client Correctly• Expect client to request credit; be ready!• Credit Application Form• Determine credit limits• Send Welcome Letter/ Email• Contacts / address for payment Emerging Business Symposium 108
  92. 92. Invoicing• Design an invoice that is better than any coming into your company.• Keep it brief, clear, simple.• Get rid of the ads.• Invoice with 24 hours no exceptions.• You don’t get paid if your client never gets the bill. Emerging Business Symposium 109
  93. 93. Collection Process• Don’t feel guilty about collecting a debt.• You are owed for goods or services provided.• Start the process the minute a sale is made. Emerging Business Symposium 110
  94. 94. Collection Process• Time is money and is your worst enemy.• Be professional at ALL times.• If you have laid the ground work properly, you will get paid.• This is a competitive sport; if you are not getting paid, someone else is. Emerging Business Symposium 111
  95. 95. Ask these questions• How long does it take us to invoice? Can this be speeded up?• Monthly statements; can this be speeded up?• Are all terms of sale clearly and precisely shown on all quotes, price lists, websites, invoices and statements?• What is the real average length of credit that you are giving? Emerging Business Symposium 112
  96. 96. Ask these questions• Do you have a collection procedure? Is it followed?• Are you firm but fair with your approach?• Do you monitor every client on a never ending basis?• Do you pay your sales people before you get paid? Emerging Business Symposium 113
  97. 97. http://www.youtube.com/watch?v=x4juGkQ1Ks4 Emerging Business Symposium 114
  98. 98. Collection Process• Time is money and is your worst enemy.• Be professional at ALL times.• If you have laid the ground work properly, you will get paid.• This is a competitive sport; if you are not getting paid, someone else is. Emerging Business Symposium 115
  99. 99. Do a Cash Flow Budget• Month to month, daily, weekly.• Predict cash flow gaps and allows you to take steps before a crisis occurs.• Usually done only once; when you are applying for a loan.• If you don’t know how to do this, seek professional help. NOW.• Process is not that difficult.• Rely on data, not assumptions.• Assume the worst, work to achieve the best. Emerging Business Symposium 116
  100. 100. Cash Flow Budget Prepare sales forecast. Project anticipated cash inflows. Project anticipated cash outflows. Put projections together, cash flow bottom line. Identify surplus to invest. Identify shortfalls and steps needed to be taken NOW. Identify longer term surpluses to fund expansion. Identify longer term needs from other sources. Assume the worst, work to achieve the best. Never ending process. Emerging Business Symposium 117
  101. 101. Plan ahead.• Many sources of capital.• Bank, private investors, family, etc.• Most are not “user friendly” to start ups.• Excellent and overlooked source of funding is factoring.• This can be a possible solution.• It only works if you have sufficient margin to afford the cost. Emerging Business Symposium 118
  102. 102. Emerging Business Symposium 119
  103. 103. Emerging Business Symposium 120
  104. 104. Factoring can be possible solutionSell Accounts Receivables for small discountDoes not fit all casesMake sure it is a perfect fit before you get involvedMARGIN is the key Emerging Business Symposium 121
  105. 105. Emerging Business Symposium 122
  106. 106. Emerging Business Symposium 123
  107. 107. Emerging Business Symposium 124
  108. 108. Emerging Business Symposium 125
  109. 109. Emerging Business Symposium 126
  110. 110. United Capital Funding April 1997 National practice; banking “roots” SBA Award C.P.A. Background Goal: Not vendor, a partner! Relationship, not transaction business First Tennessee strategic alliance Emerging Business Symposium 127
  111. 111. Emerging Business Symposium 128
  112. 112. Emerging Business Symposium 129
  113. 113. Firm and Industry Niche firm exceptional  Audited Financial track record in domestic Statements Factoring sector  95% self generated clients Grossly underserved market  #1 Ranked organic [w/o with significant growth PPC] Google website potential  Diversified client base Formed 1998, consistently  Diversified geographic profitable client portfolio CAGR = 20% versus  No industry industry 4% concentration Diversified Fortune 500  Secure funding in place Debtor Portfolio Emerging Business Symposium 130
  114. 114. Millions $300 Purchased AR YTD 2011 through $250 October 31, 2011 $200 $150 $100 $50 $- 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Emerging Business Symposium 131
  115. 115. Emerging Business Symposium 132
  116. 116. Emerging Business Symposium 133
  117. 117. Emerging Business Symposium 134
  118. 118. Emerging Business Symposium 135
  119. 119. Emerging Business Symposium 136
  120. 120. Our Practice Focus“In good times, trusted client partnerships will fill your sails with wind; in a difficult economy, they provide essential ballast that will keep you on an even keel.” Emerging Business Symposium 137
  121. 121. Emerging Business Symposium 138
  122. 122. Emerging Business Symposium 139
  123. 123. Service-Profit Chain Internal Service Quality Employee Satisfaction Employee Retention + Productivity External Service Value Client Satisfaction Client Loyalty Revenue Growth = PROFIT Emerging Business Symposium 140
  124. 124. Emerging Business Symposium 141
  125. 125. What is Factoring?Accounts Receivable factoringPurchase invoice advancing % of the face value of the invoice [usually 80%]Balance, less fees and reserve remitted to client upon collection by our lockboxNotification + verification based factoringClient gets immediate cash“Outsourcing” TMIntelligent.Working.Capital. Emerging Business Symposium 142
  126. 126. What this is not…..NOT a loanNOT based on net worth or cash flowNOT lender “last resort”Time in business is not importantServe as “credit manager and/or outsource partner” Emerging Business Symposium 143
  127. 127. Emerging Business Symposium 144
  128. 128. Client Attributes $0 to $25 Million Any stage lifecycle Limited collateral Funding in most industries, but not construction and medical firms Startups ok! Client must have sufficient margin Emerging Business Symposium 145
  129. 129. Emerging Business Symposium 146
  130. 130. Economic Lifecycle Emerging Business Symposium 147
  131. 131. Needs change over time Opportunity Inception Launch Grow Harvest Evolve / retire High Growth/ Company revenues are not the Activity only indicator of attractiveness. Our practice best lends itself to companies, large or small, who are in an innovating, high- growth/high-demand situation. Low Start up Small BusinessCompany Mid-market Size Enterprise (departmental) Emerging Business Symposium
  132. 132. Emerging Business Symposium 149
  133. 133. Geographic Client Locations 14% 24% 58% 4% West South Northeast Midwest Emerging Business Symposium 150
  134. 134. Client Locations by State MT 0% MA MD MN MO NC IA IL IN 3% 2% 3% 1% 2% NJ NV 1% 4% 0% MI 1% 1% NY 3% 4% OH 1% PA GA 6% 10% SC 9% FL 33% TN AL 7% TX 0% 2% VA VT 1% CA AZ 0% DC CT 1% 0% 3% WA 0% 2% Emerging Business Symposium 151
  135. 135. Current Portfolio 18 37 17 8 9 11 Staffing Distribution Service Manufacturing Technology Other Emerging Business Symposium 152
  136. 136. Primary Industries FundedStaffing37% portfolioAll kinds Emerging Business Symposium 153
  137. 137. Primary Industries FundedManufacturing18% portfolio Emerging Business Symposium 154
  138. 138. Primary Industries Funded • Distribution • 11% Portfolio Emerging Business Symposium 155
  139. 139. Primary Industries FundedTechnology9% portfolio Emerging Business Symposium 156
  140. 140. Primary Industries Funded • Service • 17% Portfolio Emerging Business Symposium 157
  141. 141. Extensive Government ARFederal, State, Local, OtherQuasi GovernmentUniversitiesSchool Districts Emerging Business Symposium 158
  142. 142. Emerging Business Symposium 159
  143. 143. Client duration 21% 29% 14% 8%Our duration average4.4 years; 18% 6% 4%Industry >12 months 2010 2009 2008 2007 2006 2005 2004 earlier Emerging Business Symposium 160
  144. 144. Client Funded FICO710700 Percentage change YTD = 4.6% 702690 9 year average = 652 680 670 660 671 652 655 661 650 648 638 640 649 652 640 630 620 610 600 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD Emerging Business Symposium 161
  145. 145. Number of Invoices120,000 110,076 99,463100,000 95,540 93,262 Through 86,905 November 30, 201180,000 77,06360,000 54,530 40,83840,000 22,38520,000 14,373 13,183 6,931 1,383 2,128 125 - 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011YTD Emerging Business Symposium 162
  146. 146. Average Invoice Size $$3,000.00$2,500.00$2,000.00$1,500.00$1,000.00 $500.00 $- 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Emerging Business Symposium 163
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  161. 161. Professional Services Accounts Receivable Management Working Capital Professional, turnkey AR monitoring Access to Credit Insurance Ability to credit qualify prospect/debtor at no cost Secure, 24/7 online reporting Secure, lockbox services Peace of mind Emerging Business Symposium 178
  162. 162. Why are we different? No term Minimums Start up fees Termination fees Per invoice Client remains in control Emerging Business Symposium 179
  163. 163. Emerging Business Symposium 180
  164. 164. Recent MilestonesWill Have Funded $1.5 Billion Cumulatively since formation in 1997Financially solid, stableSeveral industry players leaving due to lack of funding and/or lossesFirst Tennessee support Emerging Business Symposium 181
  165. 165. Professional Fees• Simple, JIT Model• 5 day fee FUNDING, not invoice date to collection @ lockbox• Wire / ACH fees• No other fees• All fees are itemized per invoice, and available online Emerging Business Symposium 182
  166. 166. Emerging Business Symposium 183
  167. 167. Professional Fees• Determined by:• Size of AR• “Pedigree” clients• Concentration vs. diversification• FICO score• Credit insurance Emerging Business Symposium 184
  168. 168. Professional fees are…. Less than credit card merchant fees Less overdraft APR More than traditional bank line of credit No personal guarantee All services bundled Fees itemized invoice Profitability modeling Incredibly competitive Emerging Business Symposium 185
  169. 169. Emerging Business Symposium 186
  170. 170. Professional Services Accounts Receivable Management Working Capital Professional, turnkey AR monitoring Access to Credit Insurance Ability to credit qualify prospect/debtor at no cost Secure, 24/7 online reporting Secure, lockbox services Peace of mind Emerging Business Symposium 187
  171. 171. Many ways we can help.. • Credit Information • Credit Insurance • Commitment to Fund Letters • RFP Support and Logos Emerging Business Symposium 188
  172. 172. Emerging Business Symposium 189
  173. 173. First Tennessee Alliance Emerging Business Symposium 190
  174. 174. Emerging Business Symposium 191
  175. 175. Facts vs. MythsThe perception of our industry is the single largest misconception we encounterOur website is an educational resourcewww.ucfunding.com Emerging Business Symposium 192
  176. 176. Facts vs. MythsMyth: Factoring is used businesses in “bad shape” or Fortune 500 firmsFact: Used by all sized businessesHuge industry $130+ Billion Emerging Business Symposium 193
  177. 177. Facts vs. Myths Fact: used more than ever, start up to mature  Astute managers use it; outsource, lower breakeven point Emerging Business Symposium 194
  178. 178. Fact vs. MythsAoccdrnig to rscheearch atCmabrigde Uinervtisy, it Myth: If you factor,deosnt mttaer in waht oredr customers getthe ltteers in a wrod are, theolny iprmoatnt tihng is taht “nervous” and leavethe frist and lsat ltteer be at Fact: Neverthe rghit pclae. The rset can happened 10+ yearsbe a toatl mses and you cansitll raed it wouthit a servingporbelm. Tihs is bcuseae the Use surveys tohuamn mnid deos not raed ensure qualityervey lteter by istlef, but thewrod as a wlohe. Emerging Business Symposium 195
  179. 179. Facts vs. MythsFact: Actually can cement relationshipAbility prequalify credit limit criticalAssertively sell more; average sale can increaseLess dependent on personal credit Emerging Business Symposium 196
  180. 180. Facts vs. Myths Myth: If you factor, offend or alienate clients Fact: Goal is to grow, not “offend” Illogical aggravate in any way Proactively provide references Emerging Business Symposium 197
  181. 181. Standard Inquiry StepsPersonal credit on Principal(s)Comprehensive Background checkCorporate, debtor searchUnderwritePrice RelationshipProposal/No Interest Letter1 Business day Emerging Business Symposium 198
  182. 182. There are no stupid questions Emerging Business Symposium 199
  183. 183. We are only a click away Emerging Business Symposium 200
  184. 184. We will respond quickly… Emerging Business Symposium 201
  185. 185. PartnershipWe succeed when clients successfulKey to success is partnership with clients, partners,Continue operate with highest levels of integrity Emerging Business 202 Symposium
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  189. 189. UNITED CAPITAL TMINTELLIGENT.WORKING.CAPITAL. Emerging Business Symposium 206
  190. 190. UNITED CAPITAL TMINTELLIGENT.WORKING.CAPITAL. Emerging Business Symposium 207

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