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The Future of Factoring

Back row left to right: William Lucy, Thomas Nucci, Thomas Kavanagh, Sandra Altman, Jason Goldberg, Nelson Rodriguez, Michael Marks, Blessing Brown; Bottom row left to right: Janequa Wilson, John Manini, Vinita Ramnani, Mark Reiner, Mariana Lopez | Photography by Jill Lotenberg

It has never been more critical for apparel, textile, and fashion businesses to work with partners who see a business as more than just a collection of numbers. It is equally critical for these businesses to be well-informed and to understand the magnitude of data that is available to them in today’s rapidly evolving retail market.

“Merging these two seemingly divergent philosophies is the vision behind IDB Bank’s factoring division,” said Jason M. Goldberg, senior vice president and division head.

The division offers all of the expected factoring services and products — collection, advance, notification, non-notification and export factoring — as well as term loans and inventory advances.

“We have had a lot of success in providing our clients with the tools they need to manage their businesses more effectively,” Goldberg said. “One advantage we bring to the table as a middle market bank is an in-house factoring group. We not only recognize the economic levers a business uses to succeed, but we have a deep understanding of the nuances of our clients’ trade cycles and the credit of their customers.”

IDB Factors was founded in 2000, as a corollary to the bank’s deep involvement in the fashion, apparel and related industries, and has quietly been serving its clients, while adhering to its core philosophy: “It’s personal.”

“In short, it is about excelling at what you do, providing value and extraordinary personalized service to your clients, and earning your clients’ business every day,” Goldberg said.

That philosophy is what attracted him to IDB in 2015, after working in the factoring, asset-based lending and trade finance industries for over 20 years. “IDB was a great fit from a culture and product standpoint,” said Goldberg. Summarizing IDB’s priorities, Goldberg continued, “First and foremost, IDB serves people. Our clients are mostly established operating companies that are closely held, which allows for the development of deep-rooted, trust-based relationships.”

IDB Bank’s lending products include corporate, middle-market, healthcare, not-for-profit, real estate, private banking and asset based, along with a syndication desk and an Israeli desk (for Israeli companies looking to do business in the U.S.). IDB provides a full complement of traditional banking services, such as cash management, trade services, foreign exchange and interest rate derivative services, all in house. IDB Bank and its IDB factors division offer expert guidance in a multitude of disciplines, helping its clients beyond what traditional lenders have historically provided. IDB utilizes its trust-based relationships, unique positioning and core values to achieve success. Its vision is to aspire to be the best bank for its clients by putting their needs first, offering unwavering personal service, trusted relationships, and the expertise of its people.

In the last three years, the bank’s factoring business has more than doubled. Goldberg leads a team of seasoned professionals with a diverse array of backgrounds. The team consists of former bankers, asset based lenders, factoring professionals, customer credit managers, and apparel production personnel. This diversity provides the bank and its clientele with expertise in collateral analysis, inventory management, liquidation strategies, supply chain logistics and retail customer credit, as well as typical credit and financial analytics. The group monitors the financial and retail markets, to ensure they know the stories behind the news.

“I am incredibly proud of the success that Jason and his team have built helping our existing and new clients at IDB protect their receivables and grow their businesses. While the retail climate poses challenges, we at IDB are committed to supporting the industry and growing our commitments to the marketplace,” said Lissa Baum, executive vice president and chief lending officer. “Apparel, accessories and home furnishings clients are a key growth segment of our strategic plan at IDB and one that we are committing resources to grow in products and services to meet the needs of our clients.”

In addition to its core business, the division has developed an expertise and a significant following in the emerging brands space. This encompasses beauty, health, food and beverage, with a core focus on health and wellness. These businesses typically have private equity backing and are at varying levels of growth.
“We have worked with and continue to work with a variety of emerging brands,” said Vinita Ramnani, senior vice president of new business for IDB. “These businesses are blazing trails, paving the way to healthy living, while disrupting and altering the CPG landscape. It’s tremendously invigorating to be a part of these stories and to partner in our clients’ successes.”

As one division of a larger bank, factors can also call upon other areas in the bank, including its private and international divisions, to collaborate and provide unique solutions for its clients.

“One of our core values at IDB is the concept of being ‘One Bank,’ working together to solve problems,” said Goldberg. “We help each other perform at a higher level, to deepen the relationships with our clients and internal stakeholders.”

Next-Gen Networking
In addition, the bank hosts events that provide its clients with market insights and information, allowing its clients to meet and network with each other, exchange ideas and strategies. One networking event brought together the “next generation” of their clients, allowing them to network with their contemporaries, while guest speakers provided context on current market trends. “Our clients are thinking about how to transition their businesses to the next generation. Helping them in this process is just one example of our core value: it’s personal.”

A recent symposium discussed the current concerns regarding U.S.-China relations and the uncertainty surrounding the tariffs. “We brought in industry experts to have an open discussion with our clients,” Goldberg said. “Understanding what keeps your clients up at night is critical to our success in building trust-based relationships.”

These relationships are invaluable at a time when e-commerce is disrupting the normal distribution channels, and tariff and trade wars could potentially disrupt supply. Amazon has changed the dynamics of retail permanently, creating an entirely new value proposition.

“The retail climate is painful right now, but the end result will be retailers and suppliers being better informed about their consumers,” said Goldberg. “It’s overwhelming to search online and get 10,000 options for a simple golf shirt. Traditional retail is learning how to better curate product for its customer. Some retailers will adapt, and others will not.”

The tariff situation remains fluid — and that is the problem.

“The most damaging aspect of this is the inconsistency and the uncertainty,” Goldberg said. “If you gave business owners the opportunity to plan for the increased costs, they would painfully adapt. Without the ability to plan, the ramifications will be significant.”

Jason Goldberg
IDB Bank
511 5th Avenue
New York, NY 10017
jgoldberg@idbny.com
212-551-8778

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