As small to midsize businesses plot their futures, they may find themselves between worlds: no longer flush with peak-pandemic federal funding or buffered by PPP loans, but still dealing with supply chain snafus plus the added headache of inflation; managing a team rather than overseeing every last operational detail on their own, but still nowhere near as big as the name-brand competitors that dominate the marketplace. For smart, secure expansion and a steady flow of capital, what’s a business’s next step?
To promote growth at a healthy pace while protecting their bottom line, burgeoning furniture and housewares manufacturers and wholesalers deserve a trustworthy lending partner with the experience and deep pockets needed to adapt to any new challenge. Family-run factoring-and-finance company Rosenthal & Rosenthal boasts a decades-long legacy of supporting home businesses, ensuring their credit stability so that they can keep their focus on the manufacturing, warehousing and distribution of their primary product—be it home goods, textiles or furniture. For strategic financial services minus the red tape that’s often inescapable with big bank financing, it’s the perfect match for businesses with at least $2 million in annual revenue.
“Traditional banks tend to be more restrictive and regulated in their policies, but as a privately owned lender, we’re able to establish our own credit guidelines, which allows us incredible flexibility,” says Joel Wolitzer, senior vice president of business development for the firm, who specializes in the home goods sector. “Even if a company is experiencing some temporary financial difficulties, we look at overall collateral, the big picture, as opposed to a one-time snapshot of profitability.”
“We can keep the relationship fluid so that if something doesn’t go completely to formula in the short term, the music doesn’t stop; the client doesn’t have to shut down production and rework a whole credit facility. Oftentimes in these situations, an amenable solution is quickly agreed upon between the client and the Rosenthal account executive and account team,” says Brian Resutek, senior vice president of business development, who focuses on the furniture category.
Founded in 1938, Rosenthal is the largest privately held factoring, asset-based lending, purchase order financing and direct-to-consumer and e-commerce inventory financing firm in the United States, and brings eight decades of perspective to each new client relationship. Having not only witnessed but weathered every conceivable market cycle—as far back as the Great Depression—Rosenthal balances its historical knowledge with a modern nimbleness that enables the firm to custom-tailor its services to the individual client. With offices in New York, California, Georgia and North Carolina, and a roster of clients across the home goods sector, the firm is well-positioned to provide credit protection on receivables, loans against receivables, inventory financing and more to help home brands manage risk, increase income and maintain that elusive sweet spot between too much and not enough product.
It’s not an easy moment to be in the home business: Today’s furniture and housewares brands are confronted daily by changing economic developments, especially as the industry’s boom has shown signs of slowing down. Some may be stuck with excess inventory and struggling to move it; others are left wondering how to deal with differing growth rates among divisions. Direct-to-consumer companies are venturing into the retail space for the first time, unsure about the viability of potential customers, while heritage brick-and-mortar brands have to augment their base. Labor shortages persist and inflation has upped container and freight costs. Rosenthal assists in financing all such scenarios through its competitive interest rates and flexible payment structures.
At the start of every partnership, Rosenthal analyzes a business’s collateral and ownership in addition to its balance sheets and profitability. Then, it determines a financial program targeted to specific issues. For seasonal businesses, for example, purchase order financing that takes supply chain cycles into account can better support inventory fluctuations by lending against receivables that wouldn’t otherwise be collected for net 60 to 90 days, a tactic that alleviates constraints on working capital and creates more liquidity. Alternately, Rosenthal can lend against existing inventory to fulfill future orders.
“If our client is, say, an importer of textiles, their goods get here, hit a warehouse, and when the various retailers place their orders, the wholesaler has to ship to the customers accordingly,” says Wolitzer. “Because we have the expertise of understanding the credit worthiness of these retailers, we provide credit protection for our client. Think of it as insurance: Our client can be confident that Rosenthal is on the hook for those customers to pay.” When a client needs to borrow against those receivables prior to being reimbursed, Rosenthal bridges that gap too.
And in the event that a customer defaults? “With nonrecourse factoring, Rosenthal takes on the risk. We’re cutting that check,” says Resutek. Such exposure to loss is why it’s in Rosenthal’s interest to make sure that the manufacturers and wholesalers they represent are selling their products to dependable retailers with proven track records of paying their bills. While nationwide chains like Target, West Elm and Williams-Sonoma may get most of the headlines, Rosenthal’s client base in the furniture space runs the gamut from one or two smaller stores to these major retailers. “The furniture industry can be very fragmented,” says Resutek. “There are lots of great mom-and-pop shops across the United States that have only two or three locations, but they do good business. A manufacturer in North Carolina won’t necessarily know how reliable a potential new retailer in Utah is because they have yet to sell in that region, but Rosenthal will know because we already have three or four other clients selling to that same Utah retailer, along with the corresponding payment history for those other clients to vouch for them.” Working in tandem with the client company’s controller or CFO, the firm also oversees the bookkeeping aspects of transactions, with complete transparency. It’s this familiarity with the nuances of the home furnishings field that makes Rosenthal such a strong ally for growing businesses.
“From an efficiency standpoint, a partnership with Rosenthal permits businesses to concentrate on what they do best, whether that’s manufacturing furniture or importing case goods,” says Resutek. By eliminating any stress about available funds and providing flexible terms at reasonable rates, the firm empowers small businesses to safely take the risks that will boost their earnings. “Ultimately, as our clients succeed, we succeed,” says Resutek. Now that seems like a sound investment.
This story is a paid promotion and was created in partnership with Rosenthal & Rosenthal.
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