In early June, Transfac Capital announced it has streamlined the funding process of vendors of the oil spill. According to a press release, Transfac waived “certain portions of their process as well as set up fees in order to accommodate businesses in need of business finance to support the clean up effort.” Transfac added that it was committing to funding qualified borrowers in less than a week.
The factor also stated separately that it, “has seen several funding requests due to the Gulf situation and while we were only able to accommodate one client, we were introduced to several potential clients regarding future business.”
A few weeks later, United Capital Funding announced it set up a special program to provide immediate funding for businesses aiding in the recovery efforts in the Gulf. “We are very pleased that our first is the first to proactively establish a fund like this to help in the cleanup effort,” said Mark Mandula, managing partner of United Capital in a company press release. “Our firm is based in Florida so we are very aware of the impact this even it having on businesses all over the Gulf Coast. We believe it is very important to make available capital to businesses providing services in the recovery, and to get others back on their feet again. We know that in a time of need such as this, we will be ready to provide funds to clients in staffing, transportation, service and other sectors.”
Sterling National Bank, through its payroll finance group, Sterling Resource Funding, announced it allocated $100 million to fund staffing firms in the Gulf Coast region that were supplying workers affiliated with cleanup activities in mid-July.
“We know the staffing industry inside and out and are fully prepared to help these companies and communities at a time of extraordinary distress,” said Allen Gershlak, SVP, Sterling National Bank in a press release. “Furthermore, we know firsthand that the staffing industry has been particularly hard hit by the recession. Securing additional credit, due to sudden increase in demand, can present challenges for some of these firms in light of the current lending environment.” Gershlak headed up a team that funded impacted firms in the area. Sterling activated a fast-track program to expedite review and approval process, due to the urgency of the situation, it said.
Also in July, King Trade Capital said that it provided a $4 million purchase order finance facility to a California supplier of environmental products to BP. A press release noted that the company represented one of the vendors that manufactures oil absorbent booms needed in the cleanup. This product, the company’s release said, “absorbs oil right out of the water and then is disposed of.”
Since the spill, King Trade has received more than $8 million in purchase orders from BP. According to Edward King, “Our client, as a supplier to BP, needed a great deal more capital to deliver all the oil absorbent booms that BP wished to purchase from them… We are happy to have provided additional financing that has enabled our clients to provide a valuable service but also help them make an excellent profit.”
In mid-August, Bibby Financial Services provided a $750,000 factoring facility to MOP Environmental Services, which manufactures MOP Maximum Oil Pickup, a patented material that remediates oil spills. According to a release, “MOP has begun to use the cash flow to provide companies with environmentally safe oil sorbent products to clean up the Gulf Coast oil spill and fulfill order both here and abroad.”
“This company has had a sudden increase in business due to the scale of the oil spill,” said Bob Jaskiewicz, EVP of BFS Midwest. “In order to keep up with the demand for its product, [MOP] needed the flexibility of factoring… We’re proud to provide them with the financing they need to mitigate the loss of animal and plant life along the Gulf Coast.”
Amanda L. Gutshall is associate editor of ABF Journal.