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Oklahoma payment acceleration firm looks to grow
TBS Factoring Service, an Oklahoma City-based business, is poised to expand by a growth factor of one plus more, its president believes.
“We've grown our business model to where we are the number one provider of factoring services in the transportation sector,” Jennifer Fogg said. “Now, our plan is to take that to other markets.
“Our goal is for people to get to know us as a payment accelerator.
“But, that requires a tremendous amount of technology and new platforms,” she continued, “and that's where we need help. That is our biggest challenge right now, to bring tech people on board.”
TBS Factoring Service was founded in 1968 as Truckers Bookkeeping Service, which offered over-the-road truck drivers permitting and fuel tax reporting services. In 1998, it expanded those services by offering insurance and compliance reviews and audits.
In 2004, it created TBS Factoring Service LLC, which historically has bought customer truckers' outstanding invoices for what they are owed, minus a fee, and then handled collections of those receivables. It also later created a dispatching service designed to help truckers find high-paying loads.
In 2013, it created TBS Capital Funding to offer the same type of factoring service provided to truckers to other independent contractors or business owners.
In November, it took its factoring service digital, giving its clients the ability to digitally transact their business with TBS using software capable of processing scans or photos.
The goal now is to scale up its online platform so that it can serve a multitude of new customers in various fields.
Creating the websites and software allowing for online interactions with clients is one step toward that goal. But the company also created software capable of quickly pulling together financial and credit information on both the client and on the individuals or companies that owe the client money.
Plus, that software also communicates with other software the company uses in other parts of its network to calculate risks for the proposed deals.
The result, Fogg said, was creating a digital system capable of giving a client an answer on a factoring request within an hour, rather than two or three days.
At least one customer said she appreciated the change.
Lisa Koelling of W.C. Transport, Inc., in Webb City, Missouri, said she's been a TBS client since 2009.
"I like the progress they've done with their technology," Koelling said. "It's super easy now with their uploading system. Before, we would have to either fax in our paperwork or mail it."
Koelling, whose firm hauls shingles and other freight, said she was the first client to use their digital platform, and said the process was a smooth one that takes the worry out of sending TBS materials via the mail.
"It is super easy to do," she said. "It makes it a lot better."
Fast response key
For someone who needs to get paid to continue operating, the ability to get an answer that fast is a game changer, Fogg added.
“Factoring, or invoice financing, is always going to be a little more expensive than traditional bank financing. That is just the way it is,” she said. “But those rates are being brought down dramatically by companies like us, who see the value in volume.
“We have deals right now that are 1 percent (of what the client is owed). One percent of something is better than zero percent of nothing.”
Fogg said TBS' traditional business, transportation factoring, is accepted, understood and acknowledged across the trucking industry, but acknowledged the firm will have to challenge traditional stereotypes about the business as it offers its service to other types of clients.
“Outside of the transportation industry, it is kind of a dirty word. People don't like it, because they associate factoring or invoice financing with some kind of correlation that you can't get a bank loan or traditional financing.”
Often, though, what is at issue for a small-business owner is the 45 to 60 days it might take to access capital through a traditional loan.
“I think what we provide is going to become a lot more mainstream than it is today, by leaps and bounds.”
Wood Kaufman, TBS' CEO and managing member, continues to lead the company by setting its strategy and identifying new business opportunities.
Fogg, a southern California native, came to Oklahoma less than a decade ago as a top executive for a construction and disaster relief contractor. She joined TBS in November, just in time for the firm's digital transition, and is overseeing development of new technology as she works with Kaufman to guide the company into its future.
Hailey Benton-Thomas, TBS' chief operating officer and general counsel, joined TBS in 2014 as its human resources director. And Jeff Geurts, TBS' chief financial officer, also came to the company in November, in part because of his technological savvy.
Geurts, a CPA, helped start QuiBids as its chief financial officer, growing it into a multi-hundred-million dollar company, and also led an investment group in its buyout and eventual sale of ViralNova, an internet publishing company.
Fogg noted that TBS recently acquired its 10,000th client, and that it usually is handling factoring services for about 4,000 at any one time.
The company's ready to grow, she said.
“When you can inject yourself and disrupt a payment cycle that exists currently for a very small business, you can change that client's business overnight by giving access to capital that's the client's in the first place.
“They've done their job. They've sold their product or their proprietary knowledge to a company or even individual who now owes that money. If we can look at that transaction, and say, the location of the debt is secure, why wouldn't we want to disrupt that payment cycle and give that business owner his money faster?
“I think universally, that's where things are headed. It truly is the new frontier in factoring.”