Capital Financial Global rescinded its merger with Affiliated Funding and is exiting the invoice factoring business to avoid potential losses and market risk associated with the economic impact of COVID-19.
“What began as an incredibly good opportunity in invoice factoring quickly began to look like we were walking straight into an economic trap,” Paul Edward Norat, CEO of Capital Financial Global, said. “By unwinding the merger with AFC and getting out of the invoice factoring business this early we truly believe we are dodging a bullet.
“We are only now beginning to see the true economic effects of COVID-19 as it ripples through multiple layers of overlapping industries and throughout vertically integrated value chains. We do not want to be holding invoices receivable on businesses that are themselves holding invoices receivable, on yet more businesses that are in turn holding even more invoices receivable, and so on. It is a cycle that we do not want to get caught-up in. We do not want to become bogged down in collections and loss mitigation. This is our chance to rip the band-aid off and walk away relatively unscathed and move on to greener pastures while we still can. The short-term objective for us now is to refocus on our core real estate lending activities where sub-pockets of opportunities are still available, despite COVID-19.”
Capital Financial Global is a specialty finance company that offers asset-backed financing and loan advisory services.
