Michigan Business Connection to Offer CUs Accounts Receivable Solution

ANN ARBOR, Mich. – Credit unions seeking an accounts receivable financing solution for growth-oriented companies, have another option. Michigan Business Connection, LLC, a CUSO, founded in March 2004 by five Michigan credit unions, has partnered with Private Business, Inc., a national provider of financial software and marketing solutions, to offer credit unions the Business Manager solution. The way the solution works is a credit union purchases a merchant’s accounts receivable at a discount, giving the merchant immediate cash both initially and ongoing as new receivables are generated, according to Private Business. It then establishes a cash reserve for each merchant and monitors the account, sweeping excess reserves back to the merchant once a month. The credit union can provide the merchant with key management reports, such as “aged receivables” and “customer balances” and the business owners can receive payments through a lockbox. Itemized monthly statements are then sent to the merchant’s customers. “Depending on the industry, receivables can comprise as much as 70 to 80% of the asset base of small to medium-sized businesses, consuming cash flow and restricting growth” said Bill Beardsley, MBC president. Beardsley said the ability to consistently and quickly convert these receivables into cash allows companies to pursue their growth objectives with “peace of mind and confidence.” “Importantly, it means that we can now provide financing to many companies and some industries that otherwise would have been difficult under traditional financing structures,” he added. More than 600 banks are currently using Business Manager, which has been in place for more than a decade, Beardsley said. The CUSO plans to develop a business development program for each of its five credit union owners that will include account receivable solutions among other items. Meanwhile, Michigan Business Connection recently completed the SBA application process for its owners and partnered with Richmond, Va.-based LandAmerica Financial Group, Inc. to form a commercial real estate title agency, MBC Title Agency, LLC. LandAmerica is a national provider of real estate transaction services with more than 800 offices and 10,000 agents in the United States, Mexico, the Caribbean, Latin American and Europe. The CUSO also beefed up its staff by hiring a vice president of business development and a commercial credit manager, Beardsley said. [email protected]