The reason for the inevitable cash squeeze is that typically lenders advance 75-80% of eligible accounts receivable and inventory. If the margins on sales are 8-12% then you are short 10-12% on the sale and will be unable to pay your vendors or meet your obligations without added capital. As your revenue grows, so does the shortfall.
GTF’s transformational flooring model enables VARs to ship product and provide services to their customers with the full support of their Vendors and Distributors. GTF provides a combination of purchase order and accounts receivable financing that handles the financing needs from start to finish (PO to collection) reducing the need for capital investment and removing credit constraints.
Having the program in place provides benefits to both the VAR and the Vendor, because we make the payments for new projects and sales growth. The result is frequently an increase in sales referrals and better pricing because the Vendor knows they have strong, well capitalized partners representing them. All the while, the program is transparent to the end customer.