Proceed With Caution

Some of the best film scenes serve up tension instead of action. 

While there’s nothing like a good showdown, those moments where the heroes go stealth and hold their breath are hard to forget. Think Alec Baldwin in The Hunt For Red October, drowning in sweat while he tries to make contact with a nuke-packing Soviet Sub. 

Or the old Star Wars gang coasting through the Imperial fleet’s defenses in their own Trojan Horse

Or the control room scenes in Chernobyl and Deepwater Horizon, with the second hand ticking closer to disaster with each poor decision. 

The tension eats us alive—and yet there’s no going back. If the hero turns away from danger, then the movie’s over. 

With that in mind, factors and lenders aren’t hunkering down just yet. But all things considered we’d do well to remember what Sean Connery tells Alec Baldwin when they’re chasing a spy through the sub’s nuclear silo: “Be careful. Most things in this room don’t react too well to bullets.” 

In other words, proceed with caution. 

Memes of the day


Hope As a Tactic?

Regarding the tension that’s tightened up the banking front, we’re hoping that the worst is over. 

But as you probably know, hope is no tactic

Consider this:

  • Eight stocks drove this year’s S&P 500 run-up… but that’s about it. 
  • Bank budgets are tighter than ever. Credit is tight. Balance sheets are shrinking. Everyone’s looking for liquidity. 
  • Small banks, which haven’t yet gone the way of SVB, actually hold a larger amount of CRE debt than big ones—some 1.9 trillion of it. 
  • The treasury yield curve is still inverted, like it has been all year. 

If it sure looks calm, there’s tension beneath the surface. It may not take much to land us in a volatile environment or settle a bet—the banking sector we all rely on is shakier than it looks. 

Still, and even when it’s not a ‘risk on’ environment, Dare Capital is open for business.


The Case for Factoring (Part II of II)

Earlier this month, we ran Part One of ‘The Case for Factoring,’ my article in the print edition of Commercial Factor

Here’s Part II. 

When big banks refuse to see struggling businesses as their problem, smaller ones pick up the slack. When Kabbage filed for bankruptcy in 2020, former clients turned to local credit unions for help processing their PPP loans. 

In the same way, people looking to launch a construction business or make payroll while the invoices come in turn to factors. With higher interest rates, tighter credit, and banks clearing their books, we’re stepping up like never before—just like they have for thousands of years and in such far-flung places as Venice, Italy, and ancient Mesopotamia. Needless to say, our country’s entrepreneurial ecosystem would not be what it is, (the envy of the world) without factoring. 

But as new regulations remind us—SB 1235 in California, and the recently defeated HB 4359 in Texas—those who meddle with financial marketplaces with the best intentions can still do harm. By placing factors and Merchant Cash Advances (MCA’s) in the same regulatory category, Golden State Regulators showed their hand. 

They don’t know what factoring is. 

They don’t understand that disclosure requirements created specifically for MCA clients can’t be fitted to everyone else like a universal nozzle. So far, this overregulation has already rippled out from a bellwether state to New York and elsewhere. Sadly, and all too obviously, far fewer factors will be lending to businesses in California in New York. 

But this, of course, is why AFA exists—to defend small businesses who operate on trust, do their own underwriting, and lend other small businesses the capital they need. When overreactions to predatory lending threaten our ability to operate, the only thing we can do is advocate for ourselves.

Right now, that means educating legislators in Austin, Sacramento, Albany, and even Washington. It means telling people what we do and reminding them that we’ve been doing it since the country’s founding and long before. 

By supporting the AFA and our efforts to educate lawmakers, you help us protect freedom of choice, and the factorer’s entrepreneurial spirit. We don’t need to see lenders and businesses deciding against factoring, all because we’ve been lumped in with those who don’t understand small businesses or consider their needs. Now, and because we want factoring, small businesses, and America’s underdog spirit to be around centuries from now, we thank you for your support.


Looking for White Label?

You’ve come to the right place. 

Building a portfolio with Dare’s Back Room Service means freedom and flexibility. 

Give us a call to hear more about:

  • Greater income (a lot more)
  • Owning assets instead of commissions    
  • Zero investment down 
  • No personal liability
  • Fifty-fifty split on risks and profits  

Hope may not be a tactic, but taking the journey is.                         

So take it with a guide you trust.

Until next time,

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