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Article Excerpt
When Cecilia Ochoa started her security service seven years ago with less than $10,000, she realized getting a bank loan was more than a long shot.
Besides the lack of any track record for the business, she had limited assets. Banks wouldn't even talk to her.
But Ochoa still needed operating capital to pay her employees and all the other expenses that go with running A-1 Security Services, located in the College Area.
"I was providing security service to just a couple of construction sites at the time," Ochoa said. "But there is a lag time in getting paid by the contractor, which could be 60 days or more. We provide the service for at least 30 days, and then they could take up to another 30 days before they pay us."
To keep the business going while she waited for customers to pay, Ochoa turned to Pat Burns, whose company, Primary Funding Corp., is what's known as a factor.
Factors, which have been around for centuries, are simply buyers of accounts receivables, or the sales invoices of a client needing the funding. The factor pays a percentage on the invoice and collects full payment from the client's customer.
In Ochoa's case, Burns purchased the invoices for security services...
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