Managing Director Mark Bienstock: Factoring in a Changing Retail Landscape

Managing Director Mark Bienstock spoke with California Apparel News yesterday. As part of a curated panel of trade finance experts, Mark discussed the changing retail landscape and consequential changes in the commercial lending industry.

In order to cope with the seismic shifts affecting trade at every level, lenders are either scaling back their services or bulking them up. With the consistent rise of e-commerce, wholesalers need fewer receivable loans and more inventory loans, even if they are selling similar or greater volumes. For lenders, flexibility is key to maintaining relevance in the apparel industry. Mark points out that an intimate understanding of apparel companies and their trajectory is vital to successfully financing them.

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CBP Strengthens Penalties on Wood Packaging Material Violations

Peter Stern, Express Trade Capital

Harmful invasive pests and pathogens are found in the solid wood packing material (SWPM) that accompanies shipments in international trade. Wooden pallets, crating, and dunnage can harbor environmentally and economically harmful species that use the wood as host material, feed upon it, or hitch a ride on it and then threaten domestic timber. Outbreaks of the Asian long-horned beetle, Anoplophora glabripennis (Motschulsky), pine shoot beetle, Tomicus piniperda (L.), and the emerald ash borer, Agrilus planipennis (Fairmaire), have been traced to importations of SWPM. Coping with the risks associated with the introduction of these pests via SWPM has become an increasingly important issue with the expansion of international trade.

For over a dozen years now, regulations have been in place that require treatment and marking of non-exempt wood packing material (WPM) imported into the United States. CBP recently issued a notice that effective November 1, 2017 penalties will be issued for violations of the wood packaging material regulations. The full notice with a link to detailed regulatory requirements can be found at CSMS# 17-000609 – ISSUANCE OF WOOD PACKAGING MATERIAL PENALTY. Importers are encouraged to understand these regulations and monitor compliance.

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Fighting the Factoring Stigma

Sadie Keljikian, Express Trade Capital

There are numerous varieties of business financing, some of which are better understood than others. Everyone’s heard of commercial bank loans and most people are familiar with popular debt financing methods like credit cards and mortgages, but less well known financing vehicles like factoring receivables are often met with either blank stares or immediate suspicion.

At its core, factoring is a simple process. When a wholesaler sells goods on open terms, a financial institution can buy the right to collect from the customer, which is called a receivable, at a discount (to account for factoring fees). The original holder of the receivable gets their money immediately and the financial institution (usually called a “factor”) collects their fees from the debtor’s payment.

Although the process of factoring is straightforward, as in any industry, some lenders will take advantage of less savvy clients with confusing language and hidden charges in their contracts, which have given factors a justifiably bad name. Over the years, the industry’s ethical practices and common standards have evolved and reduced the dodgiest lending practices, though some still persist among less scrupulous lenders.

Here’s a few reasons why the stigma associated with factoring has persisted and how to avoid the tricks:

Opaque Sales Practices

One of the most common ways in which less reputable factors take advantage of their clients is to simply avoid explaining the details of the arrangement. Although the basic factoring process is simple and the upfront costs are usually easy to understand, small, recurring charges can add up to substantial costs of which the client may be unaware until it’s too late.

If you’re signing on with a factor, don’t be afraid to ask them to walk you through exactly how much they will charge you, when, and why. If your factor is trustworthy, they will have no problem holding your hand and explaining how the process works and what fees and interest you will accrue.

Hidden Fees

Here are some of the most common terms that salespeople might leave out in an attempt to paint a rosy picture and omit the gritty (but important) details:

  • Annual minimums
  • Monthly minimums
  • Per-invoice minimums
  • Termination fees
  • Misdirected payment fees
  • Substantial default provisions

Impact on Customer Relationships

One of the benefits (or sometimes drawbacks) of signing on with a traditional factor is that they will take over your collections process for all factored invoices. Outsourcing collections can certainly free up your time and even speed up the process when you employ a good factor. However, not all collections departments are equal and things can get ugly if the factor’s collections department is brusque or unprofessional, thereby straining the buyer-seller relationship.

Too many wholesalers avoid discussing the collections process with their customers. Though it may feel unpleasant, hashing out payment details is crucial to the professional relationship. A proper factoring collections department must be personable and know how to express urgency to collect payment without insulting, annoying, or harassing the customer. To get a sense of whether a potential factor conducts collections well, ask them about their methods and whether they consistently collect from larger debtors. Chances are, if a factor has been around for a while and they consistently deal with larger accounts, they have likely figured out the basics of collections.

MYTH DEBUNKED: Only Struggling Businesses Use Factoring

Some circles hold generalized stigma against businesses that choose to factor their receivables. Since many businesses who choose to factor their receivables can’t get the financing they need from a bank, some people hold an outdated notion that factoring is a business’s death rattle. However, this is a misconception driven by misunderstanding of how banks make lending decisions.

Banks are notoriously risk-averse and typically have extensive requirements and burdensome regulations for businesses that wish to secure financing. Since the money banks lend comes from deposits, legal regulations limit bank loan approvals to only the safest transactions. As a result, businesses that bankers often reject as “high-risk” are usually not failing at all. On the contrary, many businesses grow too fast for bank lines to keep apace. Others might have cash flow gaps that banks are simply unable to fill due to the limits of their charter, internal lending formulas, or balance sheet requirements. Still other businesses are simply too new to qualify or are not bankable for otherwise unimportant reasons that put them outside the bank’s comfort zone.

As mentioned above, most businesses who utilize factoring lines are in no way failing. Many businesses actually factor their receivables because they are growing faster than their current cash flow and/or bank lines can accommodate. In such cases, businesses must supplement their cash flow with financing to ensure that they have enough capital to meet overhead and fulfill their customers’ orders. In such situations, factors and their counterparts (purchase order funders, and other asset based lenders), can offer ideal solutions.

Most of the stigma of factoring receivables comes from misunderstanding, a few shady factors, and the persistence of archaic notions. A few bad apples do not spoil the bunch, but rather should encourage businesses to educate themselves on good lending practices and seek out a reputable financier. If you have an opportunity to ramp up your sales volume and grow your business, factoring your receivables is often the most effective solution. If operational funds are tight and the orders keep coming in, don’t fret. Find potential providers, ask the right questions, trust your gut, and make the move.

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Announcement: Holiday Hours

Valued clients and associates:

Please be advised that in observance of Rosh Hashanah, several of our partner financial institutions will either be closed, or operating with limited staff this Thursday, September 21st and Friday, September 22nd.

We will be operational this week, but we will be closed in observance of Columbus Day on Monday, October 9th.

Please plan your transactions accordingly and have a happy holiday!

Effective Invoicing

Sadie Keljikian, Express Trade Capital

Careful and effective invoicing is crucial to any B2B business, but especially so if you are a wholesaler.

Chances are, you already know the basics: you should audit your invoices for accuracy and send them to your customers promptly. However, many businesses aren’t sure which details to include, what terms should be applied, or even how to create and process invoices. Wholesalers and vendors who sell to big box retailers must also contend with bureaucratic accounts payable departments that do not respond well to improper invoicing, which often results in payment disputes and delays. Remember that operational funds are your business’s paramount resource and efficient invoicing clears the path to that resource.

Here are a few tips to ensure that your invoices are as clear, accurate, and effective as possible:


To those with some experience in the consumer goods wholesale industry, this is a no-brainer. Using a template is essential to creating invoices that look professional and consistently convey the required information. Aside from the obvious aesthetic advantage, templates allow for greater accuracy, speed, and organizational efficiency. Consequently, the wholesaler is far less likely to leave out important information, create duplicate invoices, or give incorrect details in error. Since properly formatted invoices are easier to read, your customers are also less likely to overlook or misunderstand anything. With good templates, your team won’t waste time building each invoice from scratch every time you make a sale, and your customers won’t have as many questions and will probably pay you more quickly.


Most businesses are aware that each invoice should be itemized, numbered, and dated, but those aren’t the only important details.

Here is a brief list of the most important information to include on an invoice:

Invoice Date: should be the date on which you create the invoice. It’s important to note that this date should never precede the date on which the goods were sent. Invoicing customers before the goods have shipped is called prebilling.

Invoice Number: must be accurate and unique. Be careful to avoid duplicate invoice numbers.

Itemized List of Goods or Services: must be clear and complete, including number of items delivered or time spent on services rendered, description of items or services provided, cost per unit, and total cost.

Bill to” and “Ship to”:  Businesses often don’t overlook the significance of, and distinction between, their customers’ “bill to” and “ship to” information.

Basically, billing address and shipping address might be different and failing to include both addresses in such cases can result in incorrect shipments, payment oversights, delays, and other administrative issues that cause delays.

Payment Terms: (e.g. COD, Net 30, EOM Net 60, etc.) must be in accordance with any established contractual agreements with the customer.

Purchase Order Details:  to ensure accuracy, indicate the PO number on the corresponding invoice and make sure the all details of the PO match any and all details listed in the corresponding invoice.

Shipment Date: most open payment terms relate back to the ship date so it’s important to know and indicate this date accurately. This is also important to prevent chargebacks and returns for late shipments. If goods are shipped after the cancel date indicated on the customers’ PO, vendors should ask for confirmation of extension from their customers.


A system of organization for invoice numbers isn’t revolutionary, but mistakes are common enough that it bears mentioning. The easiest way to manage this issue, is to either use one numerical system for all customers (i.e. first order is 001, second is 002, and so on) or, use a combination of letters and numbers to create a sort of code (e.g. the first invoice for Marc Jacobs could be MJ001).

Standardizing your invoice numbering policy is important first and foremost because you must avoid duplicate invoice numbers to the best of your ability. Unique invoice numbers allow your customers to better organize their accounts payable and pay you more quickly. For example, if you distribute two invoices identified as “123”, your customer might pay only one invoice and insist that their payment obligations are satisfied. If you plan to finance your receivables, this is even more important, as institutions will not finance duplicate invoice numbers and, in fact, such oversights can trigger draconian default and fraud provisions found in most financing agreements.


Once you know how to create invoices effectively, the final step in developing a fool proof invoicing system is to automate as much of the process as possible. Fortunately, accounting software like QuickBooks usually includes invoicing capabilities. These programs make filling in details quick and easy. If you make certain fields mandatory, you can avoid distributing incomplete or incorrect invoices. Systems can thus reduce the margin for human error, which means businesses can spend less time, money, and energy invoicing, and more on their core competencies.


Invoicing and other back-office concerns can feel like a nuisance, but if you create a system and stick to it, your transactions will move much more quickly and smoothly. Whether issues occur in invoicing, collections, or shipping, the more quickly and clearly you communicate with your customers, the better your relationship with that customer will be.

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ETC to Attend Natural Products Expo East!

Express Trade Capital is excited to announce that we will be attending this year’s Natural Products Expo East in Baltimore!

The show will be held at the Baltimore Convention Center starting this Thursday (September 14th) through Saturday (September 16th).

We take great pride in working with businesses that not only make quality products, but take care of the earth in the process. We hope to see you there!

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Marketing From Scratch: Part 2

Sadie Keljikian, Express Trade Capital

The following is a continuation of our previous article on building a marketing department from scratch when resources are limited.

Step 5: Content rules.

When you start building your marketing materials, remember that content is your best friend, whether it’s material on your website, a guest blog post or article, or any of dozens of other varieties of marketable content. Each variety serves you in a few ways:

-Visually Appealing

At least some portion (i.e. more than one piece of media) of your marketing content should be visually driven. Infographics, videos, even written articles with photos or other visual components (diagrams, graphs, charts, etc.), are enormously helpful in driving traffic and, ultimately, bringing in new business.

This kind of content is usually best left to designers and branding professionals, since it requires an eye for detail and knowledge of effective imagery. However, there are several websites that provide templates and user-friendly design software, allowing those less experienced in design to create effective visual materials.


Although advertising is a good idea, content like blogs and articles should not be sales-driven. Why not? First, regardless of your industry, chances are there is at least one vital area of your business that clients/customers do not understand. Think of the concepts you end up explaining to every client or customer. It doesn’t necessarily have to be complicated; a lot of businesses use language or systems of which customers are simply unaware. Secondly, advertising is typically brief and to the point. The most effective ad campaigns are usually the simplest because readers/browsers don’t want to read a long-form piece with sales-y language. If a reader finds a longer piece online, they are typically looking for information. Thus, the reader will be much more receptive to a piece that gives them the information they seek without trying to sell them on a specific product, service, or business.

Finally, informative content is good for your business’s reputation. The more genuinely valuable information you provide, the more trustworthy your image and the more likely it is that potential clients or customers will actually choose you.

-Straightforward Sales

This is where your content can be as sales-oriented as you like. Although longer written pieces should be informatively-driven, advertising materials like brochures, email blasts, and online advertisements like banner ads and Google AdWords are quick and to the point. Advertising materials should always include all important details of your business (name, industry, a phone number, or “contact” link online) as well as at least a few words about what makes your business unique.

As mentioned, the key factor in content like this is keeping things brief. No one wants to read an extensive blog entry or article full of sales language because it invariably ends up boring and repetitive. Less is truly more in this case.

Set bite-sized, attainable goals.

The biggest mistake a lot of small businesses make is expecting too much too quickly. Granted, it can be difficult to know how quickly things should move, especially when you don’t have previous experience in marketing.

While you absolutely shouldn’t waste time, quantity and speed should never take priority over quality of your marketing materials, particularly the content that you plan to distribute on a large scale. Remember that all content you release will represent your business. Make sure everything looks polished and is correct and well-written before you put it out into the world.

Get out there.

Once you’ve got a reasonable amount of marketing materials and feel comfortable with your pitch, don’t be afraid to put yourself and your business out there. It may be scary at first, but contact-based sales techniques (in-person networking, phone calls, emails, etc.) are the most effective in getting you customers. Here are a few ways to get yourself and your brand out there:

-Trade Shows/Expos

This, of course, depends on your industry, but it is an excellent idea to attend relevant trade shows whenever possible. The benefits are numerous: you can meet new customers/clients, network with similar businesses in your industry, look around for marketing tips and tricks, and work on your in-person pitch.

-Email blasts/CRM

Email blasts and CRM systems are particularly useful if you are in a B2B (business to business, meaning you don’t sell to consumers directly) field. They allow you to contact large numbers of prospects at once and track your progress as they become clients or customers. You should, however, be careful in executing email blasts and/or CRM. Try not to email anyone who hasn’t given you permission. An easy way to make sure that everyone has opted in is to create a newsletter or something similar and allow people to sign up on your website. Carefully choose your email blast/CRM software, as some sites are more likely to end up in your contacts’ spam folders. If you do your homework, this option will serve you and your business well.

-Ad Space

Advertising campaigns that are worth running are going to use a significant portion of your marketing budget. This means that you should research all advertising methods thoroughly before you start spending money. Find out what kinds of ads are most effective in your industry and at your level. If you run a pay-per-click campaign, find out how much you need to spend for your ad to get valuable attention without surpassing your budget and keep your eye on the numbers. You should never spend more on advertising than you will reasonably make back in sales. This will obviously take some time and a bit of experience to nail down.

The world of marketing and advertising is intimidating, but if you pace yourself and stay as informed as possible, you can build a solid marketing department and increase your sales enormously. Use your time and resources wisely and don’t be afraid to spend a little extra time and/or money to prepare yourself and your materials.

Click for details on Express Trade Capital’s trade finance solutions.

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Hurricane Irma: CBP Guidance to Trade

Peter Stern, Express Trade Capital

CBP informed the trade community today of anticipated trade interruption due to Hurricane Irma. At this time planning is centered on potential impact to southern Florida ports. CBP issued CSMS 17-000540 yesterday with the same basic instructions as those recently issued in regard to Hurricane Harvey.

As of 3:00 PM September 6, 2017, only the port of Key West is closed (not a cargo-processing port) and CBP expects to keep other ports open but with reduced operational hours, subject to adjustment based on storm impact.

Miami and Tampa Fish and Wildlife port will be closed on Thursday, September 7, and Friday, September 8, and expected to reopen on Monday, September 11, subject to adjustment based on storm impact. Puerto Rico Fish and Wildlife office is closed until further notice. Fish and Wildlife advised that if FWS cargo is diverted, the closest operational FWS office should be contacted for instructions. EPA will monitor pesticide imports at the local level and will work with filers on any shipments. FDA has issued internal guidance, and CBP will share further updates as they become available.

Express Trade Capital is here to help if you have any questions concerning affected cargo.

ETC Announces Eco-Financing Division

Express Trade Capital is proud to announce our newly developed eco-financing department, led by VP Ashley Orlando!

We at ETC love to work with clients whose values align with our own. To that end, we appreciate businesses that strive to create high-quality products, while taking care of the people and resources in their supply chain.

Check out our announcement in IFA News!

Contact VP Ashley Orlando for more information.

Marketing from Scratch: Part 1

Sadie Keljikian, Express Trade Capital

Your small business is growing and you suddenly need to consider long-term marketing tactics. If you already have a website and any basic promotional materials, you’re off to a good start. However, it is important to devote resources to high quality, specifically driven content. Unfortunately, your budget won’t allow you to hire an experienced marketing professional, so what do you do?

I began working for Express Trade Capital with no prior finance experience. In fact, I hadn’t worked in an office at all. I was already a capable writer, but had yet to write anything journalistic or formal beyond written assignments in college. Initially, I thought this job would be a stepping stone and a good place for me to get my feet wet as an office worker. I hadn’t the slightest notion I’d move up in the company or stay long-term. Then, the business needed a marketing department and things changed very quickly.

Step 1: Look for hidden talent in your existing workforce.

When I began at ETC, I was the receptionist. Most of it came naturally; I’ve always been an extrovert and had worked in service previously, so most of my initial learning was devoted to familiarizing myself with trade finance. Not long after I started, however, my superiors decided to investigate my other skills. Within a few weeks, one of the VPs asked me if I would be willing to write a blog post for the company website. I immediately agreed, eager to demonstrate my value as a writer, and soon I was producing blog entries at least once a week. Gradually, I took on more and more new responsibilities.

The primary lesson here is that you should never take your administrative employees for granted or assume that they won’t be willing or able to do more. Offering me the opportunity to use one of my strongest skills, especially in an unexpected context, gave me a new perspective on my job. Suddenly, moving up in the ranks didn’t seem so unlikely. When you discover valuable skills in your existing employees, you gain on-site resources, save the money and hassle involved in hiring someone new, and encourage your workforce to take advantage of their strengths and grow with the company.

Step 2: Research, research, research.

If you’re building your marketing department from scratch, meaning you don’t have any employees with marketing experience and don’t plan to hire an experienced marketer, research is key.

In my case, I came in with the ability to write well, but with very little marketing knowledge beyond that of an average person who encounters ads and branding every day. When I was still in my original role, I researched as many marketing methods and resources as possible and worked with my boss to form a plan. Although he also had minimal experience in marketing, he is a lawyer with several years of experience in our industry, so he provided context for a lot of our efforts. I then spent the bulk of my time researching marketing techniques best suited to smaller, niche businesses and building a database. Throughout the process, my boss and I spoke periodically to fill each other in and brainstorm effective ways to use the methods I’d researched within the scope of our business.

Ideally, you want to have at least one person responsible for marketing skills and at least one person with more experience in your specific industry so that each can fill in the other’s knowledge gaps. Communication is key. If the two (or more) individuals fall out of contact even for a few days, the whole process can be halted. Don’t adhere yourself to deadlines too severely, especially if you’re building on scant knowledge. It’s always better to take care in structuring your marketing plan than to rush to implement systems you haven’t adequately researched.

Step 3: Plan budgets and targets carefully.

Marketing budgets can get out of control very quickly. If you don’t plan carefully, you could find yourself spending too much on components that won’t get you anywhere. If your business is rather small, it is particularly important to be extremely selective with your choices and vet thoroughly.

You should not try to compete with heavy-hitters in your industry unless you have an exorbitant marketing budget to work with. Try to gather a side-by-side comparison of your budget and plan with a competitor that deals in similar amounts to your business. See what businesses like yours are doing and, if possible, how much they’re spending on advertising and marketing. Look for comparable businesses that you would like to emulate and find a similar approach.

Beyond choosing marketing components, you should also select your audience and marketing channels carefully. Consider whose attention you’re trying to attract. Are you selling a consumer product that could be considered an “impulse purchase”? If so, you’ll probably want to invest in advertising on social media sites like Facebook, Instagram and Snapchat. If you are a B2B business and require contact with executives to make sales, you’ll probably want to focus more of your attention on sites like LinkedIn and review sites like Yelp. LinkedIn allows you to curate your ad’s audience to specific industries and job titles, so you can target businesses that might require your service and the decision makers within those businesses. Yelp and similar review sites help to simplify your prospects’ efforts in vetting you before they get involved.

Step 4: Don’t outsource unless you must.

Although this step is just a word of caution, it warrants some explanation. Varied degrees of outsourced marketing – whether you’re just hiring a graphic designer to make a logo or signing on with a full-service marketing firm – can be a brilliant resource for small businesses. Understandably, not all companies can afford to pay an entire department to build a website, extend their reach, and continually produce content.

The problem is that when you outsource, it’s often difficult to know exactly what you’re getting. This may seem obvious, but a marketing professional won’t be as familiar with your industry as someone on your staff. In other words, they may know how to market businesses generally, but they probably won’t have any detailed knowledge of the innerworkings of your business.

Different kinds of marketing companies will approach marketing for your business differently. Basic SEO will usually offer suggestions and amendments to your online content to include more keywords and move your site up in search engine rankings. More comprehensive marketers will come up with a fully-fledged marketing plan, including branding. If you absolutely must outsource aspects of your marketing, vet marketers thoroughly and insist on case studies and/or references from your industry before you sign anything. I cannot emphasize enough how important this is. Failure to fully understand your outsourced marketing resource’s strengths and weaknesses can result in your wasting a lot of money (particularly if you are bound to a minimum contract with them) without gaining any useful materials or customers.

Check in for part 2, coming next week!

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