Jim Gallien, CEO of Hangman Products, estimates that his company has saved over $1 million over the past 20 years. How? By partnering with UC Factors and using invoice factoring as a solution for funding his business growth.
Hangman Products manufactures hardware that hangs items on walls; if an item hangs on a wall, Hangman Products has a hardware system that will hang it. Their products can be found in hardware stores, home centers, and more.
The variety in their products has allowed them to see substantial growth since starting out. They have grown from a young business into a successful company who provides products for retail giants like Amazon and Walmart.
Hangman Products has successfully partnered with UC Factors since 1999 and has been able to see growth and success due to the services provided by not only invoice factoring, but the UC Factors team as well.
Hangman Product’s Challenges:
As Hangman Products was beginning to grow, they ran into a few challenges that caused them to seek out a solution for business funding.
First, some of their customers were requesting invoices with 30-60 day payment terms. While this is standard in the industry, it was not beneficial to Hangman Products who needed to pay their own bills on a weekly basis.
As they began to search for funding solutions to solve their initial challenge, Jim at Hangman Products noticed that securing the funding they needed as a young business was going to be difficult. Banks were not willing to loan to a business in its early stages unless personal assets were involved.
Other factoring companies required expensive financial statements and company audits, not only to get initial funding but also on a yearly basis and the cost of doing business with them outweighed the benefits of receiving funding.
“Instead of over $1 million in useless financial statements over the past 20 years, I now have over $1 million of valuable equipment that we used to grow our business”
- Jim Gallien - CEO, Hangman Products
Jim needed a solution to his funding challenges that would provide the cash he needed on a weekly basis to keep his company running and not cost him more than it was worth to receive that funding.
The UC Factors Solution:
As Jim was investigating solutions for funding, he heard of UC Factors through business referrals. He contacted us and found one main reason that encouraged him to choose us as his factoring company: price.
Many of the other factors Jim reached out to required quarterly audits as well as a reviewed CPA company financial statements at least once a year and a steady feed of financial data, all at Hangman Product’s expense.
These audits and statements alone are expensive, but providing them would have required an entire accounting department which wasn’t in the budget at the time.
“I didn’t spend one penny on accounting; with UC Factors I was able to run my business out of my checkbook instead of an entire accounting department”
UC Factors didn’t require any expensive financial data. Instead, we ran a performance check on the company and based our acceptance on Hangman Product’s customers’ credit instead of the company’s credit. UC Factors then had the ability to factor invoices without requiring expensive financial data, although we do retain the right to request this data on occasion if necessary.
This low-cost solution allowed the company to receive funding weekly to pay their bills and not be burdened with costly financial data requirements from their factor.
As Hangman Products partnered with UC Factors, they were able to see continued growth in their company due to the access to cash provided by invoice factoring. Due to the simple application process and lack of application and account setup fees, invoices were factored almost immediately and the company had cash on hand to pay their weekly bills.
An additional benefit they received was the ability to choose which invoices they would like to factor. However, Hangman Products still factored between 60% and 70% of all their sales over the past 20 years.
As they needed cash, they sent in invoices and received payment. This was beneficial for accounts that took a full 60 days to pay their invoice or accounts where there was concern about credit risk.
Another result of partnering with UC Factors was the continued growth allowed Hangman Products the ability to capture larger accounts like Amazon, Groupon, and Home Depot.
Typically, larger accounts like these have invoice terms of 60 days at minimum. However, because invoices from other accounts were being factored, the company had the ability to carry those invoices while still having the funds they needed to operate on a daily basis.
“I would recommend any young company partner with UC Factors; it will be less expensive than any other option you will find.”
Hangman Products was also able to successfully function without an accounting department for over 20 years due to the services provided by UC Factors. Not only did they receive cash up front for invoices factored, but UC Factors also functioned as a billing department for the company and ran credit checks on their customers.
This allowed the funds that would have typically been spent on an accounting department to be used in other areas of the company to help the business grow.
Because of their continued business growth, Hangman Products has been able to procure much larger accounts. However, as the size of the accounts grow, the invoice terms grow as well, with some of their new accounts requesting anywhere from 90 to 120 day terms.
Due to these larger terms and the growth the company has seen, they have in a sense graduated from invoice factoring and now employ an accounting department and use a line of credit for their funding. However, partnering with UC Factors and using their invoice factoring services has helped Hangman Products grow into the successful company they are today.
“UC Factors was a fantastic partner for the past 20 years to help Hangman Products succeed and get to where we are today”
Jim believes that choosing to work with UC Factors was instrumental to the success and growth of his company due to the excellent customer service he received, the minimal paperwork and cost, and the positive working relationship.
He believes any young company looking for options for funding should investigate UC Factors as he thinks that we are one of the better options available. Jim states that the cost you pay for invoice factoring will not only help your business have immediate access to cash to operate on a daily basis but also save your business money in the long run.
Are you interested in learning more about invoice factoring with UC Factors? Contact us today for more information and a no obligation consultation to see if invoice factoring is the right fit for your business.