Tucked away in Kennesaw, hundreds of miles from the nearest ocean, is a British company building on its country’s long history of maritime trade by helping U.S. companies sell their wares around the world.
The local office of Bibby International Trade Finance is unassuming, nothing like its parent company’s historic building on Duke Street in Liverpool, which Georgia Gov. Nathan Deal visited during a trip to the United Kingdom last year.
But with a network of 14 global offices employing 5,000 people and a direct line to the headquarters of the seventh-generation family firm, Bibby taps a wide array of resources to offer a specialized form of financing that helps companies grow overseas sales.
Bibby Line Group Ltd. got its start more than 200 years ago underwriting ships headed out of the port of Liverpool, a center for global trade at the time.
The company gradually diversified into areas like logistics, ship management and financial services, moving specifically into export finance 14 years ago.
Since then Bibby has become one of the best-known companies on the export side of a field called factoring, the practice of providing loans to companies based on orders from their customers rather than their own assets.
“Trade factors,” as these financiers are called, offer advances against receivables – money owed to an exporter for a product or service already delivered – and against purchase orders for goods that often haven’t even been manufactured yet.
In some cases, Bibby even helps the client collect on the bill, since it doesn’t get paid unless the exporter does.
“We are going through doing the deals that nobody else will do. We are becoming an extension of our client’s business. We become a part of what they do,” said Ian Varley, managing director at Bibby International Trade Finance in Atlanta.
Bibby’s international network often comes in handy, since it’s not easy for American firms to collect on invoices in markets where the legal environment is murky and business is based on local relationships.
“Everybody can speak English when it comes to ordering the goods, but they forget when it comes to payment,” Mr. Varley told GlobalAtlanta.
He added that Bibby uses its partner offices abroad to help vet banks, buyers and manufacturers, especially on deals upwards of $1 million.
Having that capability allows Bibby to approve exporters that can’t get traditional financing.
Companies with unproven products or small cash reserves often face a cruel cycle when it comes to exporting, Mr. Varley said. They see selling overseas as a pathway to growth, but they don’t have the cash flow to complete the sale.
Government programs like the Small Business Administration and the Export-Import Bank of the United States offer some assistance, but they don’t cover everyone, added Mr. Varley, a British-born American.
And letters of credit, bank-issued guarantees that an exporter will get paid, can take too long on deals that require a quick turnaround, he said.
Bibby helps fill that gap, issuing loans based on the buyer’s ability to pay rather than the exporter’s assets.
“You may have very poor credit, but if the customer is strong, we’ll fund it,” Mr. Varley said.
Factoring comes with a premium. It’s more expensive than bank financing – sometimes double the cost – but trade factors are known to be flexible with their terms and speedy in approving loans, said Charles Boyanton, a trade finance expert with the University of Georgia‘s Small Business Development Center.
That can be vital to a company with stretched cash reserves that needs to fill orders to stay afloat, a problem facing many companies during the recent economic doldrums, Mr. Boyanton said.
“There are lots of companies that survived this economic recession” because of factoring, said Mr. Boyanton, who has recommended it to multiple export clients. “I can tell you that I’m glad it’s there.”
Charles Saba is also glad. Earlier in the decade his firm, AA and Saba Consultants, became a licensed provider of Tasers to the Brazilian government.
When he won a $4 million deal that had to be executed in less than two weeks, Bibby provided a loan against the purchase order so Mr. Saba could afford to buy the shock-inducing devices from the Arizona-based manufacturer, Taser International Inc.
After Bibby came through on that deal, Mr. Saba kept selecting Bibby, partially because banks were hesitant to lend to his small company, he told GlobalAtlanta.
Without Bibby’s help on the major deals, “I wouldn’t have made any money and my company would have gone under,” he said.
That story indicates how the company helps small and medium-sized firms achieve firmer financial footing, even if that means that they no longer need Bibby to fill the gap, Mr. Varley said.
Until that occurs, Bibby aims to bring American firms into new markets.
“Pretty much anywhere in the world that’s legal for a U.S. company to sell to, we’ll help you find a way,” he said.