IFA Annual Conference Panel Preview: Taking the Pulse of the Canadian Factoring Market

Oscar Rombolà of eCapital provides a preview of a panel at the upcoming IFA Annual Conference that will explore the many unique challenges and opportunities in the Canadian factoring market, providing insights for everyone from companies looking to expand into the country and U.S. firms working on cross-border transactions.

The factoring market in Canada faces many of the same challenges as its counterparts in other countries, but there are also unique aspects of Canada’s factoring ecosystem. During its upcoming Annual Conference in New Orleans, the International Factoring Association will provide an in-depth look at the Canadian factoring sector in a panel moderated by Oscar Rombolà, managing director of eCapital Freight Factoring, and featuring panelists Tina Capobianco (senior vice president at J D Factors), Philippe Frenette (vice president of factoring and asset-based lending at Mitsubishi HC Capital Canada), Loren Shifrin (CEO of REV Capital) and Steven Uster (co-founder and CEO of FundThrough). Rombolà took a few minutes to speak with Commercial Factor to provide a preview of the panel.

How will this roundtable be structured? What are some of the specific topics you’ll be digging into?

Oscar Rombolà: We have invited three of the leading factoring companies in Canada, including J D Factors, Mitsubishi HC Capital Canada, REV Capital and FundThrough, to share their experience and business models with the audience. As we have learned during the COVID-19 pandemic, we do not operate isolated from each other.

At the Canadian chapter of the IFA, we strive to adhere to the IFA code of ethics and to elevate the standards of our practice. Our panelists will discuss the main differences between our companies and provide insights into some of the challenges specific to the Canadian factoring market.

Without giving away too much, what are some of the new opportunities and markets you are seeing in the Canadian factoring space?

Rombolà: In certain aspects, the Canadian market does not differ very much from our neighbors in the United States. Stricter banking covenants are forcing some companies to evaluate the flexibility of alternative financing, namely factoring and asset-based lending products.

Meanwhile, factoring companies are considering specializing in specific industries by becoming industry-focused factors. Technology also is becoming an important differentiator and many firms are expanding their menu of additional services attached to the factoring program. It’s really the continued evolution of factoring as it relates to creating “turnkey” programs that allow companies to improve their cash flow as well as operations. For example, factoring companies are offering revolving lines of credit attached to the factoring facility, fuel discount cards (as it applies to freight factoring), commercial Visa cards, load boards and TMS technology, to name a few.

What are you hoping attendees will get out of the event?

Rombolà: This is an opportunity for the audience to learn and compare Canadian business practices. Several of the companies present at the panel have offices in the United States, and some of their practices are different according to markets. Since firms like Mitsubishi, REV, J D Factors and eCapital work with very different markets, discussing our companies will bring a better idea to the audience on factoring programs, technology, business development strategies and client services.

Who do you think will get the most of this panel?

Rombolà: U.S. and Canadian factors will both benefit from the panel as will companies new to the industry, the younger generation of professionals, companies interested in venturing into the Canadian market and U.S. brokers dealing with cross-border deals.

What are some of the unique challenges the Canadian factoring industry is facing this year?

Rombolà: There are several worth mentioning, including many factoring companies in the country still not being ready to implement new technology. In addition, the cost of money and capital structure, as well as business development strategies have been challenging, especially during the COVID-19 pandemic. Lastly, we’ve also seen a boom and bust of factoring when it comes to cannabis deals/

What is your outlook for the factoring industry in Canada and overall in 2023? 

Rombolà: The first quarter has been challenging for factors working with the transportation industry. The boom in new business during COVID-19 became normalized and freight rates came back to pre-COVID levels. Startups seemed to hold off and new transportation deals dried up considerably.

Conversely, general factors got a new life and we are seeing more deals down the pipelines. Factoring fees have increased across the board as a reflection of higher interest rates, but competition is based on service and business solutions instead of cheap rates.

2023 is bringing a new market full of possibilities. We used to think outside the box as a commendable strategy. Well, there is no more “box.” Companies with true business solutions and value will dominate a market where providing cash at a low rate is not a good enough differentiator any longer.

If you’re interested in learning more and attending this panel, make sure to register for the IFA’s Annual Conference.