eRevWorks^SM: Transaction-Based Financing

Each decade an innovative product comes along that completely changes the way we do business.

TBF is similar to factoring accounts receivable in that the invoice(s) are actually purchased, not borrowed against. Unlike factoring receivables, however, transaction-based financing is transaction-based, not batch-based. This means that every invoice is purchased as a standalone asset, not put into a group masking the invoice identity, validity, credit worthiness, etc. Because of the individual invoice structure of TBF, it can only be quickly and accurately administrated on a state-of-the-art technology platform that enables such individual invoice verification, validation, credit analysis of the paying customer, visibility, etc.

TBF is ideal for less established businesses that invoice to Fortune 500 companies or other credit established companies since the credit decision is largely based on the company paying the invoice. TBF is also ideal for expanding businesses that are rapidly outgrowing their borrowing base as shown in the illustration on the right.

provides complete outsource processing for banks who would like to offer their clients transaction-based financing but must stay within their financial institutions' credit culture and FDIC guidelines to do so.

HOW IT WORKS: provides the back-office operation which allows the bank to know the invoice origin, validation, credit strength, etc., before the bank actually purchases the invoice(s) (accounts receivable) from the bank's client at a discount.


Ridiculous - I know, but in many cases, that is how factoring receivables is done. The invoices are simply batched together and discounted. You have no idea what is making up the pool. If your client were to go out of business, how would you ever collect?


handles all the back-office administration to safely allow the bank to do TBF. Although the margins of TBF are greater than any other product offered by banks, many banks shy away from this type of funding due to the perceived risk. renders the risks to be less than covering an overdraft or an unsecured line of credit. Risk is managed to give the financial institution a high yield/low risk product.


Safely administrated, TBF can be the most profitable product in the bank. The Program in Action section of this website has real-life stories of banks who have implemented this product, outsourcing to , with phenomenal results. You can be another success story.

Like the thought of someone else doing the work, but want to be able to look over their shoulder?

Now you can have it all. has eliminated the learning curve and time constraints of the bank’s back-office processing by assigning the workflow to their own experienced office staff. The processing is handled on , a state-of-the-art SAS 70 audited internet system which enables verification, validation and credit evaluation to take place at the individual invoice level. The platform allows the banker to have complete visibility into all funding with real-time information that is auditable and traceable. Many of the financial institutions view the high visibility the most powerful feature of the program, especially in today's regulatory environment.

Don't like the idea of worrying about what is going on in the portfolio, since you have so many other things on your plate?

The management team will assist the financial institution in developing customized policies, procedures, credit guidelines and business rules that are compliant within that lending institution's credit culture. These policies, procedures and business rules will be programmed (many on an individual client basis) into the system and applied daily throughout the workflow process. Since the bank procedures will be automated within the system, the bank can be assured regulatory compliance will occur with its real-time audit trail. Complete visibility into each and every aspect of the compliance environment created by the procedures and business rules will not only give the bank peace of mind, but also the ability to make adjustments wherever or whenever they feel it is necessary.

Partnering with is the ideal way to maintain control of the portfolio management without having to worry about the day-to-day workload. The bank makes the administrative decisions relative to client fees and set up. The web-based software platform used by has complete pricing flexibility in order to maintain the appropriate margin to mitigate the risks of the transaction. The bank is also able to select a discount fee that can be either fixed, graduated, or even variable.

Would you love to offer this type of non-traditional funding, but need to make sure it fits your bank/financial institution's credit culture?

Easy. Just customize what works for you. The bank selects the way they want to structure the safety of their own TBF portfolio. The experienced Processing Center staff does the work. Example of Custom Designed Controls for Transaction Based Financing: The bank can select and customize any or all of the following business rules and controls in the web-based software platform. will process the TBF portfolio according to the pre-selected controls.

• Customer Credit Requirements
  The bank decides if they want the credit checked on their client’s customers. Based on their strength, each customer would receive a credit rating relative to a specific dollar amount. Any invoices entering the system above the customers’ pre-set dollar amount would not be eligible for purchasing. also has many other credit algorithms that safely manage customer credit within the portfolio.
  
  
• Notification Requirements
  The bank decides if they wish to have their client's customers notified regarding the relationship with the bank/financial institution while re-directing payments to the bank/financial institution’s lockbox.
  
  
• Validation
  will validate invoices to be purchased according to the bank's pre-selected validation criteria. The bank is able to dictate certain parameters they choose to have set within the software. Validation can be set for UPS tracking per dollar amount as well as on a pick up or delivery basis. The system can also be set to check invoices per customer or per amount. The bank also has the option of instructing the Processing Center to select a pre-set number of invoices for validation on a sampling basis. Any one or a combination of the above courses of action can be implemented, along with other validation algorithms inherent in the system.
  
  
• Verification
  The bank decides if they wish to have invoices verified as to accuracy on an invoice-specific basis or on an invoice sampling basis. The bank is able to dictate certain parameters they choose to have set within the software. Verification will be done by the Processing Center according to the pre-selected parameters.
  
  
• Excluded from Advance:
  Safety rules can be set to exclude invoices that reach x number of days old from being eligible for advance. has many other rules and algorithms that cover the entire spectrum of determining ineligibility.
  
  
• Customer Concentration:
  The bank can set up an overall customer concentration percentage that applies across the entire portfolio or at many other levels throughout the system. For example, when a customer's invoice exceeding the pre-set percentage enters the system, it will not be available for advance. The bank then has the managerial flexibility to override this safety rule on an individual invoice basis as needed.
  
  
• Maximum Invoice Age:
  Safety rules can be set to exclude invoices that are x number of days old from being eligible for advance. This is just one example of many direct rules that can be established in the system.
  
  
• Maximum Invoice Amount:
  Any invoice that is over a pre-set amount can be excluded from advance eligibility. Other algorithms that deal with such issues as dilution and offset are also available in the system.
  
  
• ECP:
  Any new invoice can be excluded from being eligible for advance if it belongs to a customer that has existing advanced invoices that are already past their expected collection period (ECP). ECP is calculated using sophisticated formulas that draw data from proprietary credit information only provided by the platform. This prevents further exposure of a customer not paying according to their normal payment cycle.
  
  
• Collections:
  ' trained collectors will professionally and sensitively collect on all purchased invoices. This significantly speeds up payments. It should be noted that, due to pre-funding verification, collections relative to chargebacks is at the lowest in the industry.
  
  
• Posting:
  specialists will post from a feed or file copy supplied by the bank/financial institution or client, as well as taken from checks that went to the bank's lockbox. Posting will be done in the system the same day the information reaches our Processing Center. Proprietary payment application algorithms and protocols exist to streamline the posting process.
  
  

All work performed at the Processing Center is done professionally and in a timely manner. This value-added service enables banks to take advantage of offering Transaction-Based Financing to their clients, thus participating in a significant new source of fee revenue without compromising safety and soundness.