Genesis Plastics Technologies produces unique, highly-specialized parts that many manufacturers may have a tough time sourcing. This makes for a highly-diverse but relatively small customer base. With 50 employees and a typical order running only several thousand units per month for each customer, the company does not compete with the overseas firms that run large-scale, standard product orders in the millions.
Where Genesis Plastics Technologies does compete is in agility, being able to quickly fulfill new orders in just 4 weeks thanks to a highly responsive and creative design team. While the innovative work on research and development is constant, the company only begins the manufacturing process for a specific part once a purchase order is secured. The challenge facing the company was getting capital as quickly as possible from invoices. This capital enables the company to continue R&D and discover new markets that can be penetrated with one of their latest designs.
Invoice Factoring, where the funder provides capital based on standing invoices and then assumes responsibility for collection of the invoiced amount, was the right solution to keep Genesis Plastics Technologies R&D effort moving forward by providing the necessary working capital. “The relationship that you had with your local banker years ago is a lot different than it is today,” said Greg Henkel, Accounting Manager for Genesis Plastics Technologies. “They used to bend over backward and really take good care of you. In the mid-to-late 90s, we started to see a big change in service level. Many of the local and regional banks started getting gobbled up by national organizations. I think we're just small enough that we really don’t gain much attention from the big banks.”
Genesis Plastics Technologies turned to Bibby Financial Services (BFS) to streamline their finances through invoice factoring services. “BFS has worked for us for the last 10 years,” Greg stated. “They are able to help us with their quick turnaround on our invoices. The funding provided by that yields a constant, steady cash flow. When our customers have a need for a product, they issue a purchase order to us. We order plastic, we put it on our machine, form their parts and it ships out the door. The whole process can take approximately 30 days from beginning to end. We don’t invoice until the product leaves our facility. Now through BFS, we can get funding as soon as the product ships.” BFS works in unison with Genesis Plastics Technologies on collections issues, according to the company’s preference. The business has found that international accounts are more difficult to handle than domestic clients, so having the support of BFS ensures Genesis Plastics Technologies receives the right level of assistance on managing collections issues exactly when and where they are needed. “One thing that BFS does well is they're great on customer service,” Greg added. “On the day-to-day account manager's side there, they're fantastic to work with. They do whatever they can to help you and are always available. It’s similar to how traditional banking worked 30 years ago.”
In BFS, the company has now found a partner that provides the level of customer service and attention that their expanding business needs. Genesis Plastics Technologies and BFS work closely together to ensure funding is in line with growth.
Greg estimates that Genesis Plastics Technologies is seeing advanced cash flow of $600,000 a month compared to traditional 30-day invoicing. This is capital that can be continually reinvested into design efforts for the company. “We’ve been doing this long enough with BFS that keeping our capital flowing is a pretty seamless, easy process,” said Greg. “It just really works well and there's hardly ever any kind of a glitch at all. BFS works really hard to get us our funds.” In addition, the organization is finding a significant number of new customers in Thailand and Japan and is also doing work in European countries such as France and the United Kingdom. Because BFS is an international funding provider and is capable of handling cross-border transactions, they never have to worry about outgrowing the international reach of BFS.