Problem
Not all family-owned businesses are passed down from one generation to the next. In the case of a rapidly-growing distributor, the generational change of ownership was from son to father. Embarking on his new ownership, the experienced family patriarch sought additional ways to capitalize the fast growing business, and additionally wanted to lower the costs involved in boosting credit controls and accounts receivable recordkeeping needed to manage the expected 40% increase in growth.

Solution
Within a month of acquiring the business, the new CEO contacted Hamilton to arrange a factoring relationship. The CEO was impressed with Hamilton's flexibility, particularly our no term agreement program. With Hamilton, the CEO not only got the cash he needed to support his rapidly-growing business, he was able to efficiently utilize Hamilton's credit support features and accounting capabilities.

Kudos to the Staffing Industry. As reported by the American Staffing Association (ASA), 39 staffing firms were included in Inc. magazine's list of the nation's 500 fastest growing private companies. The high representation of staffing firms substantiates the fact that the staffing industry is among the nation's fastest growing industries. According to statistics provided by the ASA and the National Association of Personnel Services, the staffing industry will contribute more than any other industry to new job development by adding approximately 2 million jobs between 2002-2012.

One of the major business lessons that resonates from the Hurricane Katrina disaster is the need for emergency planning and contingency preparation. Publicized stories of businesses succumbing to communication failures and power outages demonstrate the vulnerability of our nation's economy to the fallout of disasters natural and otherwise.

For us at Hamilton, the importance of emergency planning was underscored by the first- hand accounts of one of our Louisiana-based competitors and fellow International Factoring Association members. Hearing of their trials and tribulations in maintaining operations during and in the months after the hurricane was a wake-up call for us at Hamilton. As a result, are taking steps to establish a corporate-wide emergency preparedness plan that outlines procedures to protect the safety of our employees, the integrity of our documents and data, and the continuity of our operations.

We'd like to share with you some planning tips compiled from FEMA, the SBA, OSHA, and the Department of Homeland Security that can assist in developing your plan.

Toast Making
Tis the holiday season, a season of social parties, corporate dinners and family gatherings. Why not make a lasting impression with your friends and colleagues with a toast? Before raising your glass, here's some advice:

1. Don't wing it, prepare beforehand.
2. Gain everyone's attention, stand up and use eye contact to quiet your audience.
3. Speak to everyone, try to look at the entire group of people.
4. Make it quick, a few heartfelt sentences are plenty.
5. End on a positive note, say "Cheers!" and raise your glass.

How common is an upfront fee required for factoring, and why is it charged? ~Submitted by Gary Reno, NV
Also called an application fee, due-diligence fee, and origination fee, the upfront fee is standard practice in the factoring industry. The reason behind charging an upfront fee is twofold. First, Factors incur sizable costs associated with setting up a factoring relationship, including lien searches, lien filings, credit referencing, and other due-diligence expenses. The upfront fee in effect helps to offset the costs reasonably incurred in the initial set-up. Second, the fee acts as a commitment from the client to ensure the legitimacy of the application process. Like others, Hamilton charges a nominal fee for set-up because of these reasons.

What documents and other information does Hamilton require before funding a client?
In order to properly assess an application for factoring, Hamilton requires supporting documentation to help measure the prospect company's financial state. Required documentation may be vary from client to client due to individual circumstance, but the top five most important pieces of documentation are the following:

• Certificate of Incorporation - Hamilton limits funding to U.S.-based incorporated businesses, this document verifies the client's incorporation, legal name and legitimacy.
• Current Accounts Receivable Aging Report - for review of customer payment trends and average invoice sizes.
• Current Accounts Payable Aging Report - for determination of current cash flow status.
• Balance Sheet and Income Statement - to review current financial standing.
• Evidence of most recent tax filing and payment - ensures proper tax standing and compliance.

When you submit a Question to Questions of the Quarter, we will send you a free copy of Hamilton's Pocket Guide to Factoring, a comprehensive and handily sized guide to terms and options.