Consolidation in factoring may help entrepreneurs.
When elephants dance, mice get squashed. So The Wall Street Journal implied in a May story about the impact on entrepreneurs of consolidation in the factoring industry. Not so, says Bruce Jones, deputy executive director of the Commercial Finance Association. While there are fewer big players in factoring, says Jones, "smaller factors have been growing like gangbusters."
Factors, which provide cash in exchange for a slice of uncollected book income, actually increased their volume from $76 billion in 1998 to $80.12 billion in 1999. What's more, says Jones, consolidation layoffs provide talent for new start-ups in the industry.
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