Triggers…the Other T

We all have triggers – things that hijack the way we think and the things we do.

I have been in “triggered” mode for months.

A couple of months ago, out of nowhere, a long term client sent me a letter terminating our factoring relationship.  This client was a complete joy to work with.  They are savvy business people, with a fascinating business, solid accounts and few of the risks we tend to face when working in this industry.

So, they wanted to leave…to another factoring relationship.

One might think that was my trigger.  To leave us…for another factor has all the makings of poking my competitive streak.

No.  Not the trigger.  We structure our contracts in such a way that if someone doesn’t want to continue to do business with us, they are free to leave any time they want.  We long ago adopted the philosophy that we only want to do business with people who want to do business with us.

I made the transition as easy as possible.  I went so far as to let the new factor know that when it comes to factoring clients, these folks were special and to take good care of them.

A couple of weeks later I received a call from the very stressed out Operations Manager of the now former client.  She told me they wanted to come “home”.  In the weeks that they had been with the new company, nothing was going smoothly and she felt that they were being treated like criminals.  There was nothing seamless about the funding process.  They could not rely on money moving in a systematic way.  They were not receiving reports about transactions.  Their customers were complaining about communication with the new company.  She was miserable.

You might be thinking “Ahhh that is the trigger”.  No.  Still not.

A couple of days later, Acheron and I hopped in the car and went to visit them.  Of course they could come home.  That was never an issue.

The first thing I needed to do was review their new contract.

THAT was the trigger.

That contract represents everything my like-minded colleagues and I have been trying to move away from in the industry – confusing language (even for legalese), hidden charges, less than transparent pricing and provisions for expensive penalties to exit the relationship. When I pointed out some of these provisions, the looks I got were shock and surprise.

Every single time I sit down with a new client to sign contracts, I am unapologetic that these are MY contracts, drafted by MY attorney, for the sole purpose of protecting LDI’s interests.  I tell them this as we spend the time to go through the contract page by page, provision by provision so there is no confusion about the relationship they are entering into.  I then tell them EVERY SINGLE TIME that if  I ever have to pull the contract out of the drawer and dust it off to remind them of one of those provisions, something has gone horribly wrong in our relationship that has nothing to do with the contract.

See, in my opinion, there are two kinds of factoring – risk factoring and relationship factoring.  I lived in the world of risk factoring when I started in this industry.  We expected risk.  We got risk.  We expected fraud.  We got fraud.  We expected to bleed green.  We hemorrhaged green.

There is no need for that.

Hopefully by the end of this week, we will have completed the buy-out of the other factor so our former client becomes our newest client.  It makes me both happy and sad that they are willing to pay the egregious penalties to the other firm to come back to us.  For them, and for us, it is about the relationship, not the dollars.


If you decide to change zip codes, make sure the neighborhood you are moving to is safe.


If managing the risk is more important that nurturing the relationship, the relationship is not worth the risk.

And finally,

If you don’t burn the bridge, you can always come home.