Here in the midst of August, most of us are enjoying time with our families before the start of another school year and the inevitable push as we approach the fourth quarter. While enduring the heat of what has been a very warm summer, not much could be further from most of our minds than the holiday season.
That said, I had the privilege of enjoying a dinner with a client and friend this week. Capio Partners completed its first sale with this particular healthcare provider last year and the two of us bonded over the challenges associated with completing an uncollectible receivables sale within an incredibly short time frame, as the intensity of a year-end deadline loomed before us. After herculean efforts from numerous folks, some interrupted vacation time, and even a few calls from outside a funeral service, the contract was executed on Friday, December 30, 2011, at about 2pm. While the two of us can look back and laugh about it now, we’ve certainly decided never to put ourselves under that amount of undue pressure again.
Therefore, my message for this blog is to reach out to any of you who may consider adding some year-end cash via an uncollectible receivables sale, and share with you some words of wisdom: start early! In that vein, here are a few recommendations:
- Identify your prospective buyers upfront Vet these prospective partners thoroughly to make sure that only reputable buyers have an opportunity to approach the finish line. This is a relatively easy step to avoid both last-minute, as well as post sale, complications.
- Pull your sale file early in Q4 By having your valuation(s) completed in October or early November, you’ll have plenty of time to complete a contract review, confirm that the proper accounts were pulled, or even make changes to the file make up if necessary.
- Complete your contract review as soon as a reputable buyer has been identified and a sale appears imminent What’s the difference between a lawyer and… On second thought, it’s probably not the best time for a lawyer joke and my apologies to my attorney friends. In all seriousness, it takes time to complete a proper contract review and assure that all legal questions are answered. Allow your counsel plenty of time to do what they are paid to do.
- Aim to finalize by December 1st By building in some buffer time, you will be assured of having your transaction completed in plenty of time to focus your attention on those nearest and dearest to you, and can enjoy the holiday season with the satisfaction that you’ve provided your organization with the gift of found, year-end cash.
In closing, all I want for Christmas are happy clients that get what they want in time for us all to enjoy the holidays. Thanks for reading and enjoy the rest of the summer!
Joe Bufano – SVP, Business Development