Commercial Factor Q&A: Lori Gustaf Aims to Encourage and Engage IFA’s Next Generation

Lori Gustaf, president of FirstLine Funding Group, returned as a member for the International Factoring Association’s advisory board this year, so she spoke with Commercial Factor about her goals for the organization as well as her own unique perspective on the factoring industry and its future.

Earlier this year, Lori Gustaf became one of three new members of the International Factoring Association’s advisory board.

Gustaf is the president of FirstLine Funding Group, a division of First Bank & Trust. She has more than 35 years of experience in the transportation industry and more than 20 years of experience in commercial finance. Gustaf has been an active member of the IFA for more than two decades, having served on the advisory board from 2007 to 2009 in addition to leading multiple training classes and seminars.

As she continues her second run with the IFA’s advisory board, Gustaf took a few minutes to speak with Commercial Factor about her perspective on the factoring industry and what she hopes to bring to the advisory board this time around.

Can you provide a brief outline of your career path?

Lori Gustaf: I worked for a trucking company part-time during my college years. I liked working with the drivers and enjoyed the fast pace of the industry. Following graduation and a short hiatus, I got back into the business full-time. Over a 15-year span, I worked in multiple areas for two separate nationwide trucking businesses, and I assisted in kicking off the operations department of a freight brokerage, where I was eventually exposed to factoring. It is amazing to sit back now and think how much factoring has evolved since that time. Back then, it was not uncommon for a carrier to spot factor and a continuous notice of assignment was not of any concern.  

How did you get into the factoring industry?

Gustaf: After working as a transportation business manager for a while, I was looking for a new challenge. I received an opportunity to work with a startup compliance company offering licensing, permitting and fuel tax services to new and existing carriers. Clients began requesting factoring services and it just made sense to add it to our product line.

What drew you to factoring and what has kept you in the business?

Gustaf: In 2009, I was presented an opportunity to work for a financial institution and assist in building a factoring program. This presented another new challenge for my career in transportation and finance.  Learning how to develop and grow a factoring business in a regulated environment was intriguing and the lower costs of funds, allowing for a competitive edge, was exciting. This also provided an opportunity to gain experience with more general factoring type customers. Being in a regulated bank environment has helped in our success at FirstLine Funding Group because of the extra layers of due diligence before onboarding clients, and the continued oversight and monitoring controls always keeps staff on point.

How does your background in the transportation industry enhance your approach to factoring?

Gustaf: More than any other industry, a typical carrier does not have the collateral to obtain a business loan or revolving line of credit. Having been on the front lines in a trucking operation and later the financial side of things, I have seen and can easily understand the challenges the independent operators and fleets experience with the increase in regulations coming into play. Regulations such as emissions requirements, electronic logging devices, hours of service requirements, ever-increasing insurance costs and, most of all, volatile fluctuation of freight rates present a more unique challenge for today’s customer than even five years ago.

What advice would you give to someone just starting in the factoring industry?

Gustaf: Do your homework. Learn as much as you can about the industry niche you are going to factor and serve that client base. There is always something new to learn and continuing education is very important for both new and experienced factoring professionals. Join related associations, such as the International Factoring Association, the American Factoring Association, state associations and national credit associations. Subscribe to niche webinars and publications. And, most importantly, attend conferences and events and network. Make friends and collaborate with them on an ongoing basis.  Staying in touch and sharing with your peers on the issues we all see on an ongoing basis keeps us all on top of the latest news, trends and challenges in the industry.

You previously served as an advisory board member for the IFA from 2007 to 2009. What does it mean to you to be back on the board and what are you hoping to bring to the proverbial table?

Gustaf: I am very grateful that IFA executive director Tania Daniel asked me to serve a new term on the board. Having been an active member of the IFA for more than 20 years, I hope that my experience in seeing what has worked and what has not over the years will provide some insight as we build and plan events, classes and other learning opportunities over the next few years. It is also my goal as one of the “seasoned professionals” of the IFA membership to engage and encourage participation by the next generation of the IFA.

How would you like to see the IFA enhance what it brings to members during your tenure and how will you help reach those goals?

Gustaf: Prior to the now proclaimed “pandemic era,” the IFA had not offered hybrid classes. During this period of decreased travel and in-person interaction, we have found this to be a very popular venue for members. As we have all started to join back together again, we have found that the hybrid class model is still a very successful option that the IFA should continue to offer. It allows for more opportunities to enhance one’s skills without incurring additional travel expense and increased time out of the office. By taking advantage of hybrid course offering, factors can also gain the ability to train more staff at one time, increasing their knowledge in the industry and the factor’s ability to grow their shop with less downtime for individual training.

How has the factoring industry fared this year and what are your expectations for 2023?

Gustaf: Especially in the transportation niche, we have seen the average invoice fall steadily over the past eight-plus months, but it appears to have leveled off in the past several weeks. Overall rates are still better than in many years past and it is unlikely that we will see any additional rate spikes for the upcoming holiday season into Q1/23.

One thing we have found to be an ongoing theme is that customers who requested debtor assignment releases in 2021 and early 2022 are now asking to factor those debtors again, as they need the instant infusion of cash to keep up with daily operational expenses. This will help factors make some aging ground lost in the invoice rate reduction by adding volume back to their portfolios with increased invoicing as well as carriers getting back into factoring to keep their cash flowing again.