ABFJ: What motivated the IFA Northeast Chapter’s launch?
BG: The IFA is the leading association in the world for the factoring industry, and we’ve been looking to add a strategically located chapter because we wanted to be able to deliver more services to our community of factors. Having a physical presence on the East Coast not only expands our reach, but affords a unique opportunity to create new venues for members to gather and share information. We are also privileged to have Harvey Gross lead this effort. Harvey is an industry leader who currently serves as managing director of the New York Institute of Credit. The Northeast Chapter is our second chapter; we also have one in Canada.
HG: Although the IFA maintains a large national membership, its education and training programs have been focused on the West Coast, where it is based. For years, the IFA sought to add a strategically located chapter where members could benefit from the convenience of having an industry-specific resource closer to home. With the launch of this new Northeast Chapter, East Coast-based IFA members who are committed to improving the educational and collaborative exchange features of membership are looking forward to becoming actively engaged in this new chapter.
ABFJ: What are some key issues facing the IFA that can be better facilitated through the introduction of a regional chapter?
BG: Some of the things that we try to bring to our members are networking and education. Local chapters will enable IFA members within a specific geographic region to meet with other IFA members. This will provide opportunities for increased networking and educational courses.
HG: Although the content of training and educational programs will be different, if not unique, consistent with the IFA Mission Statement, Northeast Chapter members and associate members will be able to attend educational programs and networking events with others in the industry without the necessity, time and expense of long distance travel.
ABFJ: What are some of the objectives of the expansion? Can you please describe some of the key milestones you hope to achieve that could lead to launching other regional chapters?
BG: We’re looking to start chapters all around the world. What it takes is somebody like Harvey to start the chapter. We were lucky in that we had Oscar [Rombola] and Tina [Capobianco] in Canada and Harvey in the Northeast starting those chapters. With our support, it takes a dedicated individual in a specific geographical area to start a chapter. It’s difficult for us being in California to start chapters without having somebody local to assist us. We really need an individual to volunteer to be that point person.
HG: The objective is to establish and foster the growth of and collaboration among those in the factoring, trade finance and related industries, primarily through suitable events within each of the Northeast Chapter’s seven states. Six of our events were strictly educational workshops and half-day programs, four were educational and two were social (golf/tennis outing, bowling party).
It is important the IFA Northeast Chapter sets a good benchmark for additional IFA Chapters to follow, especially in the east where there are numerous opportunities to interact and join with local and regional chapters of other national associations. Of our first 12 events, eight were held joint with other long established groups such as the NYIC and TMA.
ABFJ: Earlier this year the IFA announced it is no longer including merchant cash advance companies as members. Can you please comment on the disconnect that caused this occur?
BG: Both the IFA and the American Factoring Association (AFA) have elected to no longer allow merchant cash advance (MCA) companies as members because a lot of their business models have changed. Many have different business, which some other members and various clients were complaining, which caused concern.
MCA is not factoring. It’s lending on future credit card sales. It’s not related to factoring. It didn’t make sense to allow them to be members of the IFA. That’s not to say there aren’t good MCA companies. There are good companies that are out there that operate reputably, but there are other ones that do not. We could not police that industry or the members in it. We’re not saying that members shouldn’t work with MCA companies. Again, there are good companies out there. There are members who work with MCA companies. There are factors that do offer merchant cash advance. The factoring company is still eligible for membership, but the division that offers MCA is not.
HG: IFA has adopted the exiting of MCA firms as members. IFA Northeast Chapter will follow the lead of IFA. Without going into much detail, IFA and the smaller factoring industry has strived to be an effective alternative to firms needing cash-flow solutions and interacting with others in the financial industry.
ABFJ: What are some of the events or other agenda items that will become the focus of the IFA in the near term? Can you please comment on the longer-term vision for the IFA?
BG: The IFA along with the AFA is the sole representation for the factoring industry. I set up the AFA initially to communicate with lawmakers on the value of the factoring industry to the U.S. economy and the IFA to provide networking and training.
We always bring in new and varied training classes. We bring back the more popular classes each year such as transportation meetings, among others. We’ve become more involved in international and trade receivables, so this year we did a course on Everything You Need to Know about Trade and Factoring for the second time. We will also be conducting our bi-annual factoring survey next year so we can continue to expand and offer new services to the factoring community both domestically and abroad.
HG: In 2015 and beyond, IFA and IFA Northeast will continue to try to hold events that provide value to our members. IFA has succeeded with its programs that include conventions, half-day programs and workshops. In addition, IFA provides training and certificates for those who want to enhance their careers. IFA Northeast Chapter provided 12 events in 2014, and will follow that format in 2015 and beyond. We’re always looking to create worthwhile education and training.
ABFJ: Can you please comment on the IFA’s international endeavors and its future intentions for expansion? Are there any markets or geographies that are of particular interest and why?
BG: At our annual conference a couple years ago, we started offering an international factoring track, and will continue to do so. Our international (track) attendees continue to grow as well as the international members in the IFA.
We just signed a cooperation agreement with the Chinese Factoring Association. We have other marketing agreements in place with the Romanian and Columbian factoring associations, with which we will continue to work more closely, as well as other international trade associations, bringing education and services to factors around the world.
I think some of the markets are growing. The Chinese market is growing dramatically. It’s grown quite a bit in both number and volume. We’re working more closely with factors around the world.
The world is getting smaller. There is more international trade being done. It makes it easier to work as a factor when you have more knowledge and relationships with factors around the world.
HG: IFA does have a Toronto-based chapter and will expand education on factoring on an international level in the near future. As to expansion of future IFA Chapters, I guess many regions will watch and evaluate the growth of the IFA Northeast Chapter and then make their own decisions.
ABFJ: Is there anything not covered above that you would like to share with our readers with regard to mission and future of the IFA and its members?
BG: I know there are other associations in Europe, South America, China and other areas, but in North America, we’re the sole voice for the factoring industry between the IFA and the AFA and will continue to represent the factoring community to the best of our ability.
HG: IFA members are firms that finance Receivables to include purchase orders. At IFA Northeast Chapter we grandfather in all IFA members but have established an Associate Membership for all those such as professionals and service providers that would like to interact.
Megen Donovan is an associate editor of ABF Journal.