| Liquid Capital of Northeast Ohio |
GETTING THE CASH TO FLOW by Kyle Swenson
from Inside Business, August 2007 Issue
Finding alternative financing sources can mean the difference between a growing or stagnant business.
A yes or no answer at the bank can make or break any small business. But when credit problems stand
between your company and the working capital needed for success, John and Maryann Doucette say its
time to get creative.
“People don’t go out there looking for [answers],” says John, president of Liquid Capital of Northeast Ohio.
“If you’ve got a financial problem you don’t know what to ask for. That’s really the challenge — the people
that are our ideal clients don’t necessarily know we exist. They don’t know the options are out there.”
More than a year ago the Doucettes started an area franchise of Liquid Capital in order to guide local
businesses through their financial growing pains. The couple offer support to companies large banks turn
away.
“We’re an alternative financing source,” John says. “So our target clients are folks that are relatively new
companies so they don’t have the track record that a bank would be interested in, or maybe they are
established and they’re growing faster than they have been.”
Liquid Capital specializes in factoring, a form of financing new to many local businesses. In this process,
the Doucettes purchase invoices from their clients and give the business an advance of cash based on the
value of the invoices. Once they own the invoices, the couple collect on the clients’ behalf and returns the
balance, minus the fee.
“It’s an opportunity for our clients to accelerate their cash flow when they don’t have the ability to actually
get a line of credit from a bank and other conventional sources,” John says.
Liquid Capital can take on anywhere from a single invoice to all invoices a client owns. John says many
smaller companies benefit when Liquid Capital assumes these financial responsibilities because it allows
the business owner to focus on other areas of concern, says John.
“We do the collections and we do the cash processing. A lot of small companies particularly don’t like to
collect or don’t find the time to do collections, and a lot of big companies don’t pay until you rattle their
cage,” he says.
Factoring primarily works for companies engaged in business-to-business transactions, such as
manufacturers, importers, and trucking or staffing companies. The couple are careful to only partner with
clients who can benefit from the exchange.
“We don’t advise them on how to run their business,” says Maryann, who acts as Liquid Capital’s vice
president. “But we will tell them whether this is a fit or not.”
Liquid Capital evaluates potential clients by looking at their transactions. “The real key is that our funding
decisions are based on the credit quality of our clients’ customers, not on our clients’,” John says. “So say
somebody has a new business, but no business credit and has poor personal credit because he has been
using his credit cards to finance the business. That’s okay, as long as his customers are credit worthy.
The Doucettes run the Northeast Ohio franchise of Liquid Capital from their Westlake home. After working
at BP for a number of years in information technology, John decided to switch directions and start a new
venture with his wife, who had worked as an administrative secretary. A franchise broker led the couple to
Liquid Capital, an international franchiser based in Toronto. Liquid Capital has around 60 franchises
across the country.
“We own the business here, we’re able to use our own capital to fund our clients and we get to make
decisions locally,” John says. “But we have an internationally scaled back office and support system behind
us.”
The couple were attracted to the potential impact a Liquid Capital franchise could have on Northeast Ohio’
s economy. “The whole premise of the business is to take the funds that we have been able to invest and
invest them back into Cleveland, because somebody’s got to do it,” John says.
Although banks and other financial companies offer factoring, the Doucettes say they are in a better
position to work with entrepreneurs and new businesses.
“We can afford to handle the small deals,” John says. “Other national businesses have higher limits, so
they might only work with a business that does $100,000 to $200,000 a month in revenues, but we’ll go
well below that.”
When Liquid Capital takes on a client, the Doucettes give their customers complete access to their records
online. Customers are also free to stop the partnership at any time. The couple aims to support clients until
they establish the credit needed for bank support.
“We try to be as flexible as possible,” Maryann says. “Being small business-owners ourselves, we
understand the issue and the need for flexibility, the need to change direction quickly.”
When Jamie Meskill, president of J.F. Meskill Enterprises, a household-goods importer discovered his
company’s working capital was tied up overseas after a product line in China proved to be defective,
Meskill turned to the Doucettes for help. “We were able to price in the cost of working with a factor, and so
we were paid in advance.”
Meskill says he’s surprised more small businesses haven’t taken advantage of factoring services. “I think it
has a negative connotation that really shouldn’t be there,” he says. “What you have are just higher-margin
businesses that want to turn their receivables quickly. It’s a good way to get the cash flow running.”
John is also aware that many entrepreneurs hesitate to use alternative financing. “We’re certainly trying to
overcome a little fear of the unknown in people,” he says. “I think the whole Northeast Ohio business
attitude is conservative, so something that is unfamiliar people tend to shy away from.”
The couple remind potential clients that factoring is fairly common in other markets around the country and
this form of financing has proven successful for new businesses.
Some area entrepreneurs seem to be getting the message. The Doucettes say many potential clients who
initially declined to partner with Liquid Capital have reconsidered.
“Really what we’ve been doing for the last year or so is getting the word out there that there are
alternatives,” John says. “If the bank turns you down, it isn’t the end of the world.”
from Inside Business, August 2007 Issue
Finding alternative financing sources can mean the difference between a growing or stagnant business.
A yes or no answer at the bank can make or break any small business. But when credit problems stand
between your company and the working capital needed for success, John and Maryann Doucette say its
time to get creative.
“People don’t go out there looking for [answers],” says John, president of Liquid Capital of Northeast Ohio.
“If you’ve got a financial problem you don’t know what to ask for. That’s really the challenge — the people
that are our ideal clients don’t necessarily know we exist. They don’t know the options are out there.”
More than a year ago the Doucettes started an area franchise of Liquid Capital in order to guide local
businesses through their financial growing pains. The couple offer support to companies large banks turn
away.
“We’re an alternative financing source,” John says. “So our target clients are folks that are relatively new
companies so they don’t have the track record that a bank would be interested in, or maybe they are
established and they’re growing faster than they have been.”
Liquid Capital specializes in factoring, a form of financing new to many local businesses. In this process,
the Doucettes purchase invoices from their clients and give the business an advance of cash based on the
value of the invoices. Once they own the invoices, the couple collect on the clients’ behalf and returns the
balance, minus the fee.
“It’s an opportunity for our clients to accelerate their cash flow when they don’t have the ability to actually
get a line of credit from a bank and other conventional sources,” John says.
Liquid Capital can take on anywhere from a single invoice to all invoices a client owns. John says many
smaller companies benefit when Liquid Capital assumes these financial responsibilities because it allows
the business owner to focus on other areas of concern, says John.
“We do the collections and we do the cash processing. A lot of small companies particularly don’t like to
collect or don’t find the time to do collections, and a lot of big companies don’t pay until you rattle their
cage,” he says.
Factoring primarily works for companies engaged in business-to-business transactions, such as
manufacturers, importers, and trucking or staffing companies. The couple are careful to only partner with
clients who can benefit from the exchange.
“We don’t advise them on how to run their business,” says Maryann, who acts as Liquid Capital’s vice
president. “But we will tell them whether this is a fit or not.”
Liquid Capital evaluates potential clients by looking at their transactions. “The real key is that our funding
decisions are based on the credit quality of our clients’ customers, not on our clients’,” John says. “So say
somebody has a new business, but no business credit and has poor personal credit because he has been
using his credit cards to finance the business. That’s okay, as long as his customers are credit worthy.
The Doucettes run the Northeast Ohio franchise of Liquid Capital from their Westlake home. After working
at BP for a number of years in information technology, John decided to switch directions and start a new
venture with his wife, who had worked as an administrative secretary. A franchise broker led the couple to
Liquid Capital, an international franchiser based in Toronto. Liquid Capital has around 60 franchises
across the country.
“We own the business here, we’re able to use our own capital to fund our clients and we get to make
decisions locally,” John says. “But we have an internationally scaled back office and support system behind
us.”
The couple were attracted to the potential impact a Liquid Capital franchise could have on Northeast Ohio’
s economy. “The whole premise of the business is to take the funds that we have been able to invest and
invest them back into Cleveland, because somebody’s got to do it,” John says.
Although banks and other financial companies offer factoring, the Doucettes say they are in a better
position to work with entrepreneurs and new businesses.
“We can afford to handle the small deals,” John says. “Other national businesses have higher limits, so
they might only work with a business that does $100,000 to $200,000 a month in revenues, but we’ll go
well below that.”
When Liquid Capital takes on a client, the Doucettes give their customers complete access to their records
online. Customers are also free to stop the partnership at any time. The couple aims to support clients until
they establish the credit needed for bank support.
“We try to be as flexible as possible,” Maryann says. “Being small business-owners ourselves, we
understand the issue and the need for flexibility, the need to change direction quickly.”
When Jamie Meskill, president of J.F. Meskill Enterprises, a household-goods importer discovered his
company’s working capital was tied up overseas after a product line in China proved to be defective,
Meskill turned to the Doucettes for help. “We were able to price in the cost of working with a factor, and so
we were paid in advance.”
Meskill says he’s surprised more small businesses haven’t taken advantage of factoring services. “I think it
has a negative connotation that really shouldn’t be there,” he says. “What you have are just higher-margin
businesses that want to turn their receivables quickly. It’s a good way to get the cash flow running.”
John is also aware that many entrepreneurs hesitate to use alternative financing. “We’re certainly trying to
overcome a little fear of the unknown in people,” he says. “I think the whole Northeast Ohio business
attitude is conservative, so something that is unfamiliar people tend to shy away from.”
The couple remind potential clients that factoring is fairly common in other markets around the country and
this form of financing has proven successful for new businesses.
Some area entrepreneurs seem to be getting the message. The Doucettes say many potential clients who
initially declined to partner with Liquid Capital have reconsidered.
“Really what we’ve been doing for the last year or so is getting the word out there that there are
alternatives,” John says. “If the bank turns you down, it isn’t the end of the world.”
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