Flexent’s Kevin Wood on Working with Community Banks 

Flexent was created specifically to fill a niche in the finance industry. That is, giving small and medium sized business access to cash when they find themselves in a rapid growth mode. Flexent’s Kevin Wood explains how a partnership with a community makes so much sense.  

Working with a community bank is distinct, thanks to the specialized service and one-on-one attention that customers receive. But there are situations where the hometown bank can’t help small business customers. These reasons vary, but sometimes because the customer needs specialized financing that the bank isn’t set up to provide.

Kevin Wood, the managing director of Flexent, says that his company can fill that gap. Rather than lose a client to another bank or service, community banks can partner with Flexent.

“For most community banks, receivables is not a traditional form of financing. They do not fully understand it enough to not want to refer their clients and prospects to a factor. Flexent can be a great solution for the right business if managed well and priced fairly,” says Wood. “Community banks and small businesses also love Asset Based Lending (ABL), another product that Flexent offers.” 

“Similar to Accounts Receivable (AR), community banks are not set up to manage an ABL product properly,” says Wood. “Also, many of the smaller banks will not allow them to lend on ‘unsecured’ assets like AR and detailed inventory. They just don’t have a lot of options to help their clients or prospects.” 

“Additionally, most banks do not offer ABL to companies with less than $25 million in sales,” Wood added. “Flexent can offer a true ABL product to companies with sales of $5 million to $50 million. This fills a great need in the marketplace.”

According to Wood, Flexent can help the bank serve their customer with good products, experienced staff, and a fair price. 

“Since Flexent is a division of a community bank, we are an approved vendor, and we only want help with the receivables financing business or the ABL business, and we want the referral bank to keep everything else,” says Wood. “We can participate in the deal or pay them an ongoing revenue stream.”

Wood says that banks working with Flexent’s solutions are a better fit than the alternatives.

“Sometimes banks will try to make another product work — which usually does not help for long — or they ask for personal assets to secure the facility,” says Wood. “In the end, a bank that chooses that route may lose the customer to a larger bank or a non-bank competitor.”

“Small to medium businesses who need access to working capital will soon realize that they’re too small for the large bank ABL programs. Going with a receivables-based non-bank lender is more expensive and very risky,” says Wood.

Wood says that recently Flexent was able to work with a community bank in New York City.

“The partner bank got a referral for a loan to a large and profitable company who just negotiated a large contract to double their size,” Wood explained. “The lender received the financial information and realized that traditional lending would not fit their AR and their growth.”

“They needed an ABL and were too small for the national level, so they gave Flexent a call,” says Wood. He also stressed that they should steer away from companies without long-standing reputations. 

“The company sent a financial package to us, we have sent a terms letter, and I think we will get a new client,” says Wood. “Our partner bank will get a referral fee and a new deposit customer. All the way around, it’s a win-win!”