The New Orleans-based Receivables Exchange, the real-time online marketplace for working capital financing, announced that receivables trading volume on its market-based platform increased 466% in 2010. This nearly five-fold growth indicates that businesses are embracing the Exchange’s online working capital marketplace as a proven method of managing cash flow. The company also announced that businesses continue to realize reductions in their cost of capital of 30% after six months of trading, and are getting 99-98 cents on the dollar for their receivables, on average.
The Receivables Exchange’s market-based auction model gives businesses the most efficient, affordable pricing for their commercial receivables, and the company’s consistent growth shows this innovative form of financing has reached the mainstream. Companies small and large – and in a wide range of industries – are using the Exchange as a flexible, affordable source of working capital, and more are joining every day.
“While many other companies are struggling to access capital, I have access to all of the funds I need, and have been able to lower my cost of capital 50% by using the Exchange,” said Brent Reynolds, president of the Mad Bomber Company, a Virginia-based outdoor clothing manufacturer.
Since the marketplace launched, over 1,400 small and midsize businesses have signed up to sell accounts receivable on The Receivables Exchange. The average auction on the Exchange consists of seven invoices and totals $56,000. More than 50% of trading volume comes from account debtors with publicly rated debt, of which more than 94% is investment grade. The Exchange has Sellers in 49 states and 45 industries.
“The remarkable growth on the Exchange shows that there is tremendous appetite among small and midsize businesses for access to affordable capital, and that appetite will certainly grow in 2011, as the economy improves and more businesses recognize the benefits of online receivables financing,” said Justin Brownhill, co-founder and CEO of The Receivables Exchange. “We are anticipating another record-breaking year for our online working capital marketplace, with an increasing number of small and midsize businesses lowering their cost of capital significantly by selling their receivables on the Exchange.”
The Receivables Exchange announced in January that it was moving its headquarters to the former Chevron Place at 935 Gravier in downtown New Orleans. The building was renamed The New Orleans Exchange Center.