The mergers and acquisition route is becoming an expedient exit plan for accounts receivable factoring. We recently had one of our large established clients graduate from our funding after being acquired by a Dutch group. An IT security firm called Red Siren had no banking options because their burn rate of investment capital was such that their balance sheet was bloody red. Even though they were generating north of $6M annual revenue the banks would not consider the deal.
We stepped in and started making advances on their invoicing, relieving the Redleaf Venture Group of continued funding, and kept operations steady as they took nearly 18 months to find the right buyer to complete their exit plan. It was the consistent access to operational capital that allowed them to continue to build shareholder value, thus becoming more attractive to a prospective M&A transaction.