PRESS RELEASE: Versant Funds $3 Million Non-Recourse Factoring Facility to Housewares Designer & Distributor

Press Release: (March 25, 2025)  Versant Funding LLC is pleased to announce it has funded a $3 Million non-recourse factoring facility to a company which designs and distributes housewares through major grocery and retail channels.

This business was having trouble fulfilling new orders due to funding restrictions put in place by their current factoring company.  An advance against all outstanding accounts receivable was needed to provide the cash to meet product demand and that is what Versant was able to offer. In addition, Versant was able to pay off and consolidate a number of other loans that had been taken out by the business.

“Versant’s factoring program was a great match for this business that was continuing its recovery from pandemic-era disruptions,“ according to Chris Lehnes, Business Development Officer for Versant Funding, and originator of this financing opportunity. “Because our approach to factoring focuses solely on the quality of accounts receivable without imposing customer-concentrations limits, we were able to provide our new client more funding than their existing factor, allowing the business to better serve its customers.”

About Versant Funding Versant Funding’s custom Non-Recourse Factoring Facilities have been designed to fill a void in the market by focusing exclusively on the credit quality of a company’s accounts receivable. Versant Funding offers non-recourse factoring solutions to companies with B2B or B2G sales from $100,000 to $10 Million per month. All we care about is the credit quality of the A/R.

To learn more contact: Chris Lehnes| 203-664-1535 | clehnes@VersantFunding.com

Press Release Podcast Discussion:

Versant Funding Transaction Study Guide for Press Release

Key Concepts to Understand our latest Press Release:

• Factoring: The process of selling a company’s accounts receivable (invoices owed by customers) to a third party (the factor) at a discount to obtain immediate cash.
• Non-Recourse Factoring: A type of factoring where the factor assumes the risk of the accounts receivable not being paid due to the customer’s financial inability to pay. If the invoice is not paid for a reason other than a dispute between the client and their customer, the factor bears the loss.
• Accounts Receivable (A/R): Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.
• Funding Restrictions: Limitations placed on the amount of money a company can access, often by lenders or existing financial partners.
• Advance Rate: The percentage of the face value of the accounts receivable that the factor provides to the client upfront.
• Customer Concentration Limits: Restrictions imposed by some factoring companies on the percentage of a client’s total accounts receivable that can come from a single customer.
• B2B (Business-to-Business): Transactions conducted between businesses.
• B2G (Business-to-Government): Transactions conducted between businesses and government entities.

Quiz:

1. What is the primary service that Versant Funding LLC provides, as highlighted in the press release?
2. Specific type of factoring facility did Versant Funding provide to the housewares designer and distributor? What does this imply about the risk associated with unpaid invoices?
3. According to the press release, what was the main financial challenge faced by the housewares distributor before partnering with Versant Funding?
4. How did Versant Funding’s approach to factoring differ from the housewares distributor’s previous factoring company, allowing them to provide more funding?
5. What does the term “advance against all outstanding accounts receivable” mean in the context of this press release?
6. Besides providing an advance on receivables, what other financial action did Versant Funding take for the housewares distributor?
7. Who is Chris Lehnes, and what is his role in the transaction described in the press release?
8. What is Versant Funding’s target market in terms of the types and volume of sales their clients typically have?
9. Explain the significance of Versant Funding focusing “solely on the quality of accounts receivable.”
10. What is the dollar amount of the non-recourse factoring facility funded by Versant Funding in this specific transaction?

Answer Key:

1. Versant Funding LLC primarily provides non-recourse factoring facilities to businesses. This involves purchasing a company’s accounts receivable at a discount to provide them with immediate cash.
2. Versant Funding provided a $3 million non-recourse factoring facility. This means that Versant Funding assumes the risk if the housewares distributor’s customers are unable to pay their invoices (for reasons other than disputes).
3. The main financial challenge was funding restrictions imposed by their previous factoring company, which prevented them from fulfilling new customer orders due to a lack of available cash flow.
4. Versant Funding focuses solely on the credit quality of the accounts receivable and does not impose customer-concentration limits, unlike the previous factor, allowing them to provide more funding based on the total value of good invoices.
5. An “advance against all outstanding accounts receivable” means that Versant Funding provided the housewares distributor with an upfront payment based on a significant portion of the total amount owed to them by their customers.
6. In addition to providing an advance on receivables, Versant Funding also paid off and consolidated a number of other loans that the housewares business had previously acquired.
7. Chris Lehnes is a Business Development Officer for Versant Funding and the originator of the $3 million non-recourse factoring financing opportunity for the housewares distributor.
8. Versant Funding targets companies with B2B or B2G sales ranging from $100,000 to $10 million per month, emphasizing the quality of their accounts receivable.
9. Focusing solely on the quality of accounts receivable means that Versant Funding’s lending decisions are primarily based on the creditworthiness of the housewares distributor’s customers, rather than solely on the financial health of the distributor itself.
10. The dollar amount of the non-recourse factoring facility funded by Versant Funding for the housewares designer and distributor was $3 million.

Essay Format Questions:

1. Discuss the benefits of non-recourse factoring for a business experiencing rapid growth or recovering from financial disruptions, using the housewares distributor in the press release as an example.
2. Compare and contrast traditional bank loans with non-recourse factoring as sources of working capital for a business. What factors might lead a company to choose factoring over a loan?
3. Analyze the significance of Versant Funding’s emphasis on the “quality of accounts receivable” and its lack of “customer-concentration limits” in the context of providing flexible financing solutions.
4. Based on the information provided, evaluate how factoring can help a business overcome funding restrictions and improve its ability to meet customer demand.
5. Explain the roles and responsibilities of a factoring company like Versant Funding and a business development officer like Chris Lehnes in facilitating a factoring transaction.

Glossary of Key Terms:

• Accounts Receivable (A/R): The total amount of money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for; essentially, unpaid invoices.
• Advance Rate: The percentage of the face value of an invoice that a factoring company pays to its client upfront. The remaining amount, minus fees, is paid when the customer pays the invoice.
• B2B (Business-to-Business): A business model where companies primarily sell products or services to other businesses rather than directly to consumers.
• B2G (Business-to-Government): A business model where companies primarily sell products or services to government agencies or entities.
• Factoring: A financial transaction in which a business sells its accounts receivable (invoices) to a third party (the factor) at a discount to obtain immediate cash flow.
• Funding Restrictions: Limitations or constraints on the amount of capital a business can access from lenders or other financial sources.
• Non-Recourse Factoring: A type of factoring agreement where the factor assumes the credit risk associated with the accounts receivable. If the customer fails to pay due to insolvency, the factor bears the loss (provided there are no disputes regarding the goods or services).
• Working Capital: The difference between a company’s current assets (such as cash, accounts receivable, and inventory) and its current liabilities (such as accounts payable and short-term debt). It represents the liquid assets available to fund day-to-day operations.

Executive Summary:

This press release announces that Versant Funding LLC has provided a $3 million non-recourse factoring facility to a housewares designer and distributor. The client was facing funding restrictions from their previous factoring company, hindering their ability to fulfill new orders driven by strong product demand and recovery from pandemic-era disruptions. Versant Funding’s solution provided the necessary advance against all outstanding accounts receivable to meet this demand and also enabled the consolidation of other existing loans. A key differentiator highlighted by Versant is their focus solely on the quality of accounts receivable without imposing customer concentration limits, allowing them to offer more funding than the previous factor.

Main Themes and Important Ideas/Facts:

1. Versant Funding Provided a $3 Million Non-Recourse Factoring Facility: The core announcement is the successful funding of a significant factoring agreement. The term “non-recourse” is crucial, indicating that Versant assumes the risk of non-payment on the factored invoices, provided the debt was valid at the time of purchase.

• Quote: “Versant Funding LLC is pleased to announce it has funded a $3 Million non-recourse factoring facility to a company which designs and distributes housewares through major grocery and retail channels.”

1. Client Profile: Housewares Designer and Distributor: The recipient of the funding is identified as a company involved in both the design and distribution of housewares, operating through major grocery and retail channels. This suggests a business with potentially large and diverse customer relationships.

• Quote: “…a company which designs and distributes housewares through major grocery and retail channels.”

1. Addressing Funding Restrictions and Growth Opportunities: The client was experiencing limitations with their previous factoring arrangement, preventing them from capitalizing on new order demand. Versant’s funding directly addressed this constraint.

• Quote: “This business was having trouble fulfilling new orders due to funding restrictions put in place by their current factoring company.”
• Quote: “An advance against all outstanding accounts receivable was needed to provide the cash to meet product demand and that is what Versant was able to offer.”

1. Consolidation of Existing Debt: Beyond providing working capital, Versant’s facility also enabled the client to streamline their financial obligations by paying off and consolidating other loans. This suggests a more comprehensive financial solution was provided.

• Quote: “In addition, Versant was able to pay off and consolidate a number of other loans that had been taken out by the business.”

1. Versant’s Differentiated Approach: Focus on A/R Quality and No Customer Concentration Limits: A key selling point for Versant is their unique approach to factoring, which prioritizes the creditworthiness of the accounts receivable itself and does not restrict funding based on the concentration of a client’s customers. This was the primary reason they could offer more funding than the previous factor.

• Quote: “Because our approach to factoring focuses solely on the quality of accounts receivable without imposing customer-concentrations limits, we were able to provide our new client more funding than their existing factor, allowing the business to better serve its customers.”

1. Context of Post-Pandemic Recovery: The transaction is framed within the context of the client’s ongoing recovery from disruptions caused by the pandemic, highlighting the role of flexible financing in supporting business resilience.

• Quote: “Versant’s factoring program was a great match for this business that was continuing its recovery from pandemic-era disruptions,“

1. Versant Funding’s Market Positioning: The “About Versant Funding” section clarifies their niche: providing custom non-recourse factoring facilities to B2B or B2G companies with monthly sales ranging from $100,000 to $10 Million, with a singular focus on the quality of their accounts receivable.

• Quote: “Versant Funding’s custom Non-Recourse Factoring Facilities have been designed to fill a void in the market by focusing exclusively on the credit quality of a company’s accounts receivable.”
• Quote: “All we care about is the credit quality of the A/R.”

Key Takeaways:

• Versant Funding successfully provided a $3 million non-recourse factoring facility to a growing housewares distributor facing funding constraints.
• The transaction enabled the client to fulfill new orders, consolidate existing debt, and improve their overall financial position.
• Versant Funding differentiates itself through its focus on accounts receivable quality and the absence of customer concentration limits, allowing for potentially greater funding availability compared to traditional factors.
• This deal highlights the role of factoring as a flexible financing solution for businesses experiencing rapid growth or navigating post-disruption recovery.