Heritage Bank is now in the accounts receivable factoring business thanks to a partnership with Fayetteville-based Diversified Funding Services. Pictured are (l-r) DFS Chief Operating Officer Hussein L. Marquez, Heritage Chief Banking Officer Rocky Lipham, DFS Chief Executive Officer Mark Little, and Heritage Fayette County President Dan Vano. (Staff Photo by Danny Harrison)

Heritage Bank recently announced a new commercial funding product it is offering business customers who need immediate capital to expand and compete in what is becoming an increasingly opportunity-rich South Metro Atlanta region.

Partnering with Fayetteville-based Diversified Funding Services, the bank now offers accounts receivable financing, or “factoring”, which benefits eligible businesses by literally buying their invoices on completed work, giving these clients the ability to not only collect their cash more quickly, but also the freedom to focus more on their primary strengths while leaving the “back room” billing and collections work to their banking partners. They are calling the new banking division HB Funding Services.

And while this offering is new to Heritage Bank, it is not new to Diversified Funding Services, nor to its CEO, founder and President Mark Little, who has been doing this since 1998. He started in Jonesboro, which is also where Heritage Bank is headquartered, before moving to Fayetteville about a year ago.

“It’s not debt financing, it’s a cash-flow tool without adding debt,” Little says. “It helps businesses, and especially small businesses, get to the next level.

“We are honored to be joining forces with Heritage Bank,” Little continued, noting that in the past the bank has referred clients to outside companies if they thought their clients could benefit from factoring or accounts receivable lines of credit. In some cases, he explained, small business owners may try to get additional loans, but their financial picture is blighted by having too much in outstanding account receivables. With this new division these receivables are now valuable assets that can be used as collateral to obtain working capital.

Factoring, Little says, clears up the accounts receivable files, gives clients quick capital and helps them focus on what they do best.

For example, a grading company may need a new tractor to take on a new job, but they can’t swing the financing, and they don’t have time to collect on outstanding invoices for work already completed. By partnering with HB Funding Services at Heritage Bank, this company could get paid for that invoicing right away helping them fund the down payment for the tractor, which now becomes a more reasonable candidate for financing from Heritage or another bank.

“Factoring is one of the oldest forms of financing in the workplace,” Little says. “It works as long as they’re producing invoices to credit-worthy companies.”

And it’s not debt.

“You might get funding outside the bank in other ways, but is that best for your business? One of the biggest benefits that our customers get by having a working capital account with HB Funding Services is the back office support and credit department,” Little says. “Our customers find that their business runs more efficiently by having their AR turning on a timely manner because they are closely monitored and they are able to better determine where to focus sales by having a pulse on their customers credit worthiness.

“Many companies offer terms for payment but do not know if the businesses they are invoicing are safe to do so,” Little says. “These services are part of having this financial product says Hussein Marquez COO of Diversified.”

Dan Vano, who serves as Heritage Bank’s Fayette County president, and Rocky Lipham, who in November joined Heritage as the larger organization’s president and chief banking officer, both say they are “excited” about the partnership, which they say will be a great fit for many of their small business customers.

“Many of our borrowers have cash flow needs,” says Vano. “This helps fill a void.”

Vano, who has been in commercial lending with Heritage since April 2005, has served small businesses in the area through good times and more challenging times, and he says his customers thrive on being able to work directly with the bank’s decision makers. And that’s what he says he likes about the approach Little at DFS and his partner Hussein Marquez bring to the table.

“They are very community-minded, and they’re based right here in Fayetteville,” Vano said of Little and Marquez.

“There are a lot of folks out there who need a product like this,” said Lipham. “And having their banker involved is an important part of the process.”

Lipham noted many banks, especially community banks, avoid AR factoring and AR lines of credit. “It takes a substantial amount of back-room monitoring and expertise,” he said. “[Little and Marquez] have that. They are very customer service-oriented.”

When local economic development opportunities arise, Lipham says he wants to see local small businesses equipped and resourced to capitalize on them.

“We are so honored to be joining forces with Heritage Bank,” Little said. “We’re bringing community back to commercial finance.”

“It’s a good partnership,” Lipham said. “We believe in small business. We’re going to continue to push for small businesses.

“It’s important to us,” he continued. “Small businesses are what build communities.”