Farwest Capital

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FarwestFarwest Capital Quick Information:

  • Farwest Capital Headquarters: Austin, Texas
  • In Business Since: 2007
  • Number of Employees: 25+
  • Small Business Funding Options: ABL, Invoice Factoring, PO Financing (once established)
  • Direct Lender: Yes

About Farwest

Farwest Capital is an Austin-based invoice factoring company with additional offices in Atlanta, Charleston, El Paso, Washington D.C., Los Angeles, California and New Jersey. The company specializes in improving business cash flows through construction factoring, invoice factoring and term loans.

Further, they provide inventory and equipment financing. Inventory financing is becoming a crucial service as so many startup retailers are seeing their traditional distribution channels, brick and mortar stores, disappear.

Farwest also deals with businesses that are in some type of distress- whether it’s a ‘workout’ a turnaround, undercapitalization or issues with the Internal Revenue Service.

Farwest Management

The management team is very strong at Farwest, with a long track record in the banking industry. For example, the Chairman of the Board is Don Stricklin, the former CEO of State Bank and Texas United Bancshares and is extremely well-connected in the banking industry. The CEO, Cole Harmonson, previously had created and ran the Working Capital Finance Group at State Bank until the bank sold to Prosperity Bank. Then, he co-founded Farwest. The company’s name is actually DSCH Capital Partners, LLC but does business as Farwest Capital (the company name is presumably a nod to managers).

Farwest Philanthropy

Through its social impact program, ‘Far Reaching’, the company has raised over $190,000 for different charities. One recipient was Grameen America, which is a non-profit that offers financial education, loans and credit establishment for impoverished women in the United States. The company reports that 1,073 women entrepreneurs were aided in the Austin-area alone.

This type of work is one reason that Farwest was named one of the best companies to work for in Austin, Texas.

Industries Served by Farwest

  • Biotech
  • Construction
  • Wholesale/Distribution
  • Government
  • High-Tech
  • Manufacturing
  • Oil & Gas
  • Staffing
  • Transportation

Invoice Factoring at Farwest

Fast-growing startups often find traditional small business funding impossible because of lack of profitability, brief operating history or bad credit (or all of the above). Instead, they often agree to give up company ownership in exchange for investor capital.

But another option is invoice factoring or (also known as accounts receivable factoring). This type of alternative funding keeps cash flow coming in and allows your business to continue growing.

Here’s how it works-a third party company, known as a factor, purchases your businesses outstanding invoices at a discount and advances you money based on a variety of factors (typically 75%-95% of the invoice’s face value). When the customer pays off the invoice, the factor returns the balance o your business, less their factoring fee, usually 1%-2%

Farwest Invoice Factoring guidelines include:

  • Advance Amount: Up to 90% of eligible invoice face value (95% freight factoring, 90% for ABL)
  • Funding Availability: 3 days
  • Factoring Monthly Minimum: None
  • Contract length: 1 year
  • Factoring Support Services: Collections, Lockbox, Credit services
  • Partial invoice factoring: Yes
  • Lines of credit from $50,000 to $10 million

Farwest Invoice Factoring Review

Farwest Capital is a well-known factoring company which provides funding options for business clients of all sizes. They specialize in smaller, startup companies and the core of the management team was also entrepreneurs before forming the company. This background has allowed them the knowledge to offer the right small business funding options for their clients.

Invoice Factoring Transactions by Farwest

They have grown from nothing to $8 billion in assets under management since inception, about a decade. This 20% annual growth rate is achievable because of the tight credit by traditional banks since the financial crisis. The amount of annual financing totaled $300 million for 2011, $500 million in 2012. In total, they provided over $3 billion in financing to high-growth entrepreneurial businesses since their founding in 2007.

We also noticed some repeat customers, which tells us that they are doing something very right. Farwest funded computer-manufacturer, Xplore Technologies Corp with an $8.5 million accounts receivable purchasing agreement. Farwest had previously provided Xplore with a $4.8 million working capital loan to replace refinancing from Silicon Valley Bank back in 2002.1

This speaks to their commitment to helping the customer. Recall that 2002 was the darkest hour of the technology/dotcom bubble and traditional financing was extremely difficult.

Further, Farwest seems to go out of their way in aiding their client’s success. They have a strong presence on social media and they frequently tweet about their client’s ongoing successes. In this sense, they act almost like a public relations arm to companies, especially those in the Austin, Texas area. We like this added support.

Farwest Capital has a Very Good Reputation

We looked at what people are saying about the company and the results are genuinely positive. For being in business roughly nine years, there has been ample time for there to have been a simple complaint or two. There were none on the BBB (where they have an A+ rating) and the chatter on other sites like Trust Pilot, etc. were very positive.

We would normally prefer small businesses to seek out factoring companies with shorter term contract lengths, but given the lack of complaints about the company they must be doing something very right. Typically, the longer the contract length, the lower the factoring fees so that’s an added bonus.

Should I be Factoring Receivables with Farwest?

We would be very comfortable factoring receivables with Farwest Capital. Even though the company hasn’t been in business for ten years yet, like we prefer, considering their management has 150 years of combined experience we’ll let it slide.

They provide a free quote of their factoring rates for small business customers. Get the cash your business needs without taking on more debt.

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1http://www.bizjournals.com/austin/blog/abje_news/2012/07/xplore-technologies-receives-85m.html