ABL Advisor sat down with Bert Goldberg, Executive Director of the International Factoring Association (IFA), to get a sense of how factoring fared in 2014 and to hear his thoughts on what factors expect in 2015. We also asked Goldberg to comment on where the American Factoring Association’s (AFA) advocacy efforts have been placed in recent months.

ABL Advisor:  What are you hearing from your members with regard to the state of the factoring marketplace in recent months? How did 2014 play out for factors and what are their expectations for this year?

Bert Goldberg:  In general, my sense is that our members had a very strong year in 2014. In some instances, our members reported they had record years. They attributed this to the growth in the economy … the basic economy is growing with more goods are being produced and shipped.

Setting any unforeseen circumstances aside, most of our members expect 2015 to be a very strong year as well. Of course, fluctuating energy prices will also have a major impact on various sectors of the economy.

ABL Advisor:  What can IFA members look forward to this year in terms of the Association’s programs and initiatives?

Goldberg:  We will continue to conduct our classes and we are in the process of developing some new classes as well. This year’s conference shows trends of being our largest ever and at this point, we are running about 30% over last year’s conference in terms of registrations.

We also have been working on a study guide for our certification program and that should be complete by next year. In addition to our Annual Conference, we are producing an International Factoring and Trade Receivables course on February 19-20 in Miami. We’ll also offer an International and Trade Receivables track at our conference in New Orleans.

ABL Advisor:  Can you speak to the recent activities of the Association’s advocacy arm – the American Factoring Association?

Goldberg:  There have been some challenges in Washington, D.C. The major issue we have been dealing with is the Department of Justice’s Operation Choke Point. This DOJ initiative has been affecting factors – although it was not designed and never had anything to do with the factoring industry. In spite of that, there are many factors that have been affected in various ways by their banks. The aim of the DOJ’s initiative is a way to fight fraud by eliminating funding to businesses that it considers to be risky and undesirable.

While factoring is not categorized as an undesirable business, some banks are erring on the side of caution and cutting off funding to their factoring clients. We’ve surveyed our members and we found a number of them have lost their lines or have been adversely affected by Operation Choke Point in some other way. These banks view factoring as risky because they don’t understand it or because of the fact that they see many checks coming from third parties. As a result, they have made the decision that they don’t want factoring companies in their portfolios.

It doesn’t stop there. We have also heard of factors that have lost their corporate credit cards because their banks have determined that they don’t want any exposure to factoring companies. PayPal has decided not to process credit card payments for some factors.

There has been a good deal of fallout from Operation Choke Point and not just on bank lines, but on all sorts of other issues. We are staying on top of this issue as best we can and this is the AFA’s number one concern right now.

On other fronts, we are continuing to meet multiple times each year and we’re sending a contingent of factoring professionals to Washington, D.C. to meet with various representatives, senators and policymakers to inform them of the value that factoring brings to the overall economy. As a part of that effort, the AFA is conducting a survey in which we are collecting data from our membership. We are asking the factors to breakdown their clients by zip code so we can determine the positive economic impact factoring has on a given representative’s district or state.

ABL Advisor:  Is there anything else you would like our readers to know about the Association's current activities?

Goldberg:  We are in the midst of conducting the IFA’s bi-annual Business Profile and Performance Survey and since it’s still open, I urge all factors to participate in this important industry survey. The survey results will be released at our Annual Conference in New Orleans.

And speaking of the “Big Easy,” our conference is going to be a great event. We are having more speakers and networking opportunities than ever. We are now in our 21st year and our conference boasts more commercial finance companies in attendance than any other conference.