Wednesday, September 29, 2010

Another Milestone

We received a payment from The Receivables Exchange this morning that closed out an auction we purchased on July 28.

It was a small auction; the first we had bought from that Seller. It contained invoices due from one regional firm based in California that I had never heard of before (but that turned out, on examination, to be quite solid) and one company known and respected world-wide.

The payment history was interestingly indicative of current patterns: the regional company paid in 14 days; the worldwide behemoth paid in 62 days.

We’ve written before about the move of larger, more credit-worthy companies to extend payment terms. One of the interesting consequences of this, for TRE and its Buyers, is that it tends to increase the working capital needs of companies that sell to those large credit-worthy firms.

The impact might be only marginal but it is to put generally upward pressure on the credit quality of the Account Debtors brought to auction by TRE Sellers.

The counter-point, obviously, is that it’s clearly NOT a good thing for the Sellers. While it’s great that TRE provides a ready market to liquefy the invoices of those Account Debtors, the net impact on the Sellers’ profitability is negative.

But that discussion is not the reason for this post.

I’m writing because the payment received this morning brought our total of closed-out auctions to the 200 figure!

That’s cool; at least it is to me.

Next stop = 500.

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