CASE STUDY ONE: Traditional Factoring

A $35 million shoe manufacturer had a 90% advance factoring relationship for several years with another factor. It was a relationship he described as "adequate", in spite of numerous changes of account officers, each of whom had to be brought up the learning curve about his business. But his patience wore thin when he received a form letter, notifying him he was to pay an additional commission and accept a substantial part of the credit risk on one of his major customers. In light of this impersonal treatment, he was more than ready to change. But it was hard for him to believe Milberg's promise that he wouldn't be treated as "just a number."

Almost immediately after coming over to Milberg, another of his customers took a substantial six figure deduction. To the manufacturer's amazement, Milberg made a point of informing him the day the adjusted check was received; in fact, only a few days after it was mailed, because Milberg's check processing is on premises, not an external lock-box operation. As a result, he was able to "strike while the iron was hot" and deal with the problem in a timely manner. On a second occasion, he realized he would require a large overadvance (i.e., advances in excess of factored accounts receivable), due to shipment delays. Again, Milberg surprised him by giving approval the same day it was requested.

Result: Pleased with the decision to move his business to Milberg, the manufacturer called Leonard Milberg to tell him first-hand: "I started out as a skeptic, but I've become your greatest fan. The quick response and personal service here are very real - a total contrast to my prior experience."