Commercial Factor Q&A: REV Capital’s Mark Dubs Discusses New Division, Regulations, Interest Rates and More

In early July, REV Capital, a provider of factoring and cash flow financing in Canada and the United States, announced a new commercial finance eastern division and appointed Mark Dubs president of the eastern division. Commercial Factor spoke with Dubs, who has more than 20 years of experience in the factoring industry, about the new division, commercial finance regulations, working with referral sources, interest rates, industry performance and expectations and more in an exclusive interview.

How has the factoring and overall commercial finance industry changed in your more than 20 years in the business? How has it stayed the same?

Factoring has become much more widely known, prevalent and accepted. It was mostly a European type of finance and the United States wasn’t aware of the benefits of factoring or the growth potential it offered. Initially, factoring was deemed a fallback for a small business who couldn’t get a loan from a bank. It became much more desirable as a result of merchant cash advance companies who were exploiting businesses through invasive and expensive finance programs. In 2008, it gained recognition when we went into a recession and banks stopped lending.

This 20-year evolution has created many more alternative lenders, such as merchant cash advance companies, sub-debt loan companies and other lenders who charge much higher interest rates and work in a quicker capacity for small businesses than traditional lenders. But when factoring emerged in North America, it completely shifted the landscape. It became the most widely utilized form of financing for small to medium-sized businesses.

It has stayed consistent in that it still offers the same benefits for a growing business. Instead of taking on debt, companies pay a small fee for a flexible service. It still provides tremendous opportunities and makes a company’s balance sheet look great.

The ability to grow your business is truly unlimited as compared to bank financing, where you have a cap based on the collateral you can offer. In contrast, factoring is a much faster form of financing that provides immediate cash flow for a small business that needs those funds as soon as possible.

What do you think the key to building and leading a new division like you’re doing at REV Capital is?

First and foremost, I think we need to have the ability to offer our clients something new and something that can be customized to the current marketplace, unlike older companies that are more rigid and set in their ways of doing business. For my clients, there’s a lot of excitement at the prospect of a new lender coming into the space; they’re excited because they see that the company is being quite aggressive in getting money out the door and building up a large client base quickly.

Also, COVID wreaked havoc on our economy and seems to have killed the concept of good customer service. I think the key to our success will be able to help fix both of those issues. We are going to provide our clients with easy and flexible access to capital and provide them with an industry leading customer service experience.

How would you describe yourself as a leader?

I understand the needs of the clients I work with and the relationships I’ve cultivated with them. I think being a leader involves understanding and empathizing with a company that may be asked to leave a bank or was behind on their payroll. Understanding different types of businesses and their shortfalls is very important. I can then share those experiences with these businesses and educate the people that I work with.

As a leader, I don’t put myself above anyone else. I believe in teamwork and cooperation. I’m excited to be a part of this team at REV Capital, who are leading the industry with a dynamic growth opportunity for small businesses that have been left behind by the finance industry.

What will the geographical footprint for this new division be?

We hope to become national, as business is global and transcends all boundaries. In the past, this was a highly regionally centric business. But in today’s world, we have technology to see prospects face-to-face, which saves a lot of travel time.

If you’re able to develop that trust, through a phone call or a virtual meeting, you can get a lot more accomplished. It’s important to focus on time management when you’re trying to grow a client’s business.

Even though our office is located in the state of New York, we have already brought on clients all across the U.S. We have the desire and ability to fund our clients quickly and efficiently, no matter where they are.

What will be your focus in your first few months leading this new division?

Organically growing the name while educating prospects on the benefit of working with REV Capital is going to be top-of-mind. Staying involved throughout the process to ensure the client receives exceptional customer service will also be key to growing this portfolio. REV has done an excellent job at establishing themselves as market leaders in transportation and staffing. Now we just have to let the industry know that those industries are just the tip of the iceberg. There’s a new name in commercial finance and we need to get the word out quickly.

I know building relationships with referral sources has been a big part of your career. What are the keys to building these types of relationships, specifically in the factoring world?

Accessibility is crucial. These relationships are not being paid by us; they’re promoting us because they trust in us. We want to show our appreciation for that. I let them know that I’m genuinely available for them, that I’m there when they have an opportunity and that I’ll work diligently to get their clients over the finish line and funded. They want somebody that will go the extra mile and even take their call on a Saturday or late night if necessary. Clients want to feel reassured that there is always going to be someone to answer the phone when they need it. Our clients’ businesses don’t stop running just because our office is closed. Their problems and concerns can’t always wait. The companies I work with need to know that I will be there when they need me.

You’ve spent the bulk of your career in New York. What is your take on new commercial financing regulations in the state (and throughout the United States) and how it will affect the factoring industry?

Our biggest threat has been the growth of merchant cash advance companies and it’s done a lot of irreparable damage to small businesses throughout New York. There are many laws being passed to protect small businesses from merchant cash advances and deter these companies from preying on small businesses. Once those bylaws really start taking effect and merchant cash advances begin fading away, factoring is going to become the preferred source of financing for every business.

That said, our company should be relatively unaffected given that our fee structures are always transparent, made easy to understand and relatively affordable. Honesty in pricing and transparency of service are part of the reason why I chose to build the commercial finance division for REV Capital.

How would you describe how the factoring industry has performed in the first six months of 2022?

From a general standpoint, it’s been a little challenging. But from a specific viewpoint, it’s performed extremely well. If you focus on industries that are more recession proof, of course those companies are going to do very well.

We deal with a lot of fire prevention, medical staffing and other companies that are for the most part involved with the government. These companies have grown dramatically and performed marvelously. In fact, we have never been busier than these last few months and I think it will only get better from here on out.

How do you think factors like rising interest rates, geopolitical upheaval and rising fuel prices are impacting the factoring industry and its clients?

Ultimately, it’s going to help factoring because a lot of banks are going to be much more affected by these conditions and turn away a lot of companies who are applying for traditional bank lines. Factoring is going to benefit from that tremendously.

A business that is less than two years old and growing is not going to be affected much by these conditions. It’s larger, longer existing companies that are going to have problems maintaining or attracting traditional financing. Alternative financial options are going to be coveted and thrive, especially coming out of COVID since the government is no longer going to be subsidizing payroll for small businesses. That’s where we step in, take them by the hand and lead them to success, whether that means helping them maintain their operations, bringing them out of insolvency, or taking the growth of their business to the next level.

What are your expectations for the industry throughout the rest of the year?

The sky is the limit – I think the people representing factoring companies that didn’t take a more specified, regional approach may struggle. But for those of us who really focus on industries that are growing and are more recession proof, we are going to continue to grow. I think the next few years are going to be the best years we are going to see for the factoring industry.

We have a great strategy that allows for accelerated and sustainable growth, with strong relationships we’ve cultivated that can make those introductions to those industries. This is a collaborative effort and we all have our own part to play. We are in a great place to help those companies that may be struggling and really grow REV Capital in the United States.