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How C2FO Provides Flexible Funding for One Company’s “New Normal”

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The worldwide shift in business processes caused by the coronavirus has brought one company, and the timely services it provides, into full view. 

In this era of social distancing and other restrictions, Emerge BPO is a safe harbor for companies hit hard by the impacts of these aggressive, but necessary measures. 

A highly-valued service

Adrian Collins and his wife Carole Fletcher founded Emerge BPO in 2008, in the heart of their native South America. The Georgetown, Guyana-based business process outsourcing company serves North American clients with a variety of services, including customer management, back office work and transaction processing. 

In recent months, the services Emerge BPO provides have become a highly-valued commodity as companies around the world scramble to adapt to the demands of running a business in the time of a pandemic. 

Collins, who is Emerge BPO’s director and co-founder, believes the uptick in demand for outsourced services will double the company’s business over the next four months. 

Although Collins is grateful for the surge in demand, the opportunity to grow his business came at a “rough moment.” 

Like many small businesses, Emerge BPO had considerable cash tied up in accounts receivable, often representing 60 to 90 days of sales yet to be collected from its customers. 

In addition, Emerge BPO’s clients were extending payment terms as even the largest companies looked for ways to increase cash on their balance sheets. 

Late payments coupled with Emerge BPO’s rapid hiring to keep up with demand led Collins to consider other options to meet payroll. Emerge BPO has about 600 employees spread across its facilities in Guyana, Honduras, the United States and Canada.  

“This business is payroll intensive — It’s our biggest, single expense,” Collins said. “Especially at a time when you’re growing, you have to be able to cover payroll for additional employees. It’s a tough thing for a small business to be able to pay employees without collecting anything for 90 to 120 days.” 

At the same time, securing a line of credit with a bank was not an option. When the economic crisis first hit, banks were unsure of how to handle the influx of loan requests. 

“It all just changed at the same time. The growth we were experiencing was great, but we were struggling to capitalize on that growth opportunity because banks were saying, ‘We aren’t going to extend your line of credit right now. We need to wait.’” Collins said. 

Uncertainty during the pandemic 

Emerge BPO runs some of the call centers that a leading national retailer uses for ordering, whether that’s for business-to-business or directly to consumers. Because of the social distancing measures put in place by state and federal governments, Emerge BPO was the only vendor able to work for the retailer, making them a critical revenue generator for the large enterprise. 

When the retailer, a large client for the call center business, decided to temporarily close its early pay market through C2FO in March, both companies recognized they needed to put a plan in place to get Emerge BPO the cash it needed to grow. 

“We had become quite reliant on that national retailer’s early payment marketplace and sort of timed everything around it. When they slowed down, we didn’t have much time to adjust and revisit our banking relationships,” Collins said. “On top of that, this was at the height of the pandemic, so for a couple of weeks, we were scrambling around trying to figure out how we could get access to cash.” 

Emerge BPO’s retailer customer and C2FO worked quickly to ensure Emerge BPO would be able to continue operations while also providing a steady stream of revenue for the retailer itself — a clear win for both companies. 

Quick capital through a third-party funding solution

The retailer turned on Dynamic Supplier Finance (DSF), an alternative funding program through C2FO that allows third parties to fund early payment on behalf of a buyer. 

DSF gave the retailer an integrated and flexible funding option that would protect its own cash reserves while supporting Emerge BPO through the C2FO early payment system.

Within 24 hours, Emerge BPO’s invoices were accepted through a third-party lender and hundreds of thousands of dollars in accounts receivable became available. 

“With DSF, we’ve been able to go back to normal in terms of covering payroll and rent. It’s allowed us to capitalize on growth without going into debt,” Collins said. 

The new normal

Emerge BPO started using C2FO’s early payment program about 11 months ago as an alternative to factoring. 

Collins said C2FO’s flexible funding options have been a lifeline as the company’s sudden growth created a need for an influx of working capital. 

“Our business is a little strange because we’re busy in normal times, but I think we tend to get busier in strange or difficult times,” Collins said. 

Many of the companies and industries that Emerge BPO supports — anything that needs back office and quality assurance services — have grown busier as the economy relies more heavily on things like online retail and ordering. 

Collins said many of his employees are able to work remotely, which has helped keep his company running throughout these social distancing times. 

“Our ability to scale up quickly and provide essential services has become quite a big thing for some of the companies we work with, because it’s part of the new normal,” Collins said. “All of a sudden, these companies don’t have many live phone agents to take calls and they realize they may not need as many of those folks as they thought.”

For now, Collins is focused on meeting the growing demand for his company’s services. He believes that C2FO’s alternative funding options will continue to be a crucial part of growing Emerge BPO. 

“DSF is essential — especially for the type of business that we have had. It’s been an important part of our ability to grow, and it will be an important aspect for other small businesses,” Collins said. “It’s great because we don’t have to go into debt. We just collect early on earned revenue.”