The Receivables Exchange Reports 300% YTD Growth

NEW ORLEANS--(BUSINESS WIRE)--The Receivables Exchange, the world’s first online marketplace for real-time trading of accounts receivable, announced today that receivables trading volume on its market-based trading platform increased 300% YTD as of July 31, 2010. The company also announced that by selling receivables on the Exchange, businesses are lowering their cost of capital by 30%, on average. This triple-digit growth is further proof that The Receivables Exchange is turning receivables financing into a mainstream financing tool for businesses to improve liquidity and fund growth. The Exchange allows companies to sell their receivables to institutional investors, who compete in real time to purchase them for 98 to 99 cents on the dollar, on average.

“The growth of receivables traded on the Exchange over the past six months has been remarkable, and is proof that businesses are looking for better ways to fund their operations”

“When most businesses are contracting, I’m on pace to grow my business by 70% in 2010 by selling my receivables on the Exchange,” said Joe Reini, CEO and president of Mason-Grey Corporation, an Atlanta-based IT services company. “Rather than wait for my customers to pay, I post my outstanding invoices on the Exchange each week, and I’m able to reinvest the funds by taking on projects and hiring more employees. And, with the Exchange, I’ve lowered my cost of capital by 40%. As CEO of a growing company, I see The Receivables Exchange as a much-needed innovation to help companies realize their full potential in this new credit economy. Every business will soon be using receivables financing as a regular working capital solution.”

In the first half of 2010, The Receivables Exchange realized growth of 200% with growth increasing to 300% as of July 31, 2010. The Exchange grew its base of Sellers to over 1,100, with more than 74% becoming repeat Sellers. The average auction consists of 6 invoices and totals $52,000. The company’s credit summary shows that more than 50% of trading volume comes from account debtors with publicly rated debt, of which more than 94% is investment grade. The Exchange has Sellers in 49 states and 45 industries. Industries with high activity levels included manufacturing, wholesale and distribution, professional services, business support, media and technology. While the shortest auction of record closed in only 4 seconds, most auctions close in as little as 24 hours, with Sellers receiving their funds the next business day. Sellers on The Receivables Exchange have more than $15 billion in accounts receivable inventory; Exchange Buyers have more than $30 billion in Buyer liquidity.

“The growth of receivables traded on the Exchange over the past six months has been remarkable, and is proof that businesses are looking for better ways to fund their operations,” said Justin Brownhill, co-founder and CEO of The Receivables Exchange. “By using the Exchange, they can access capital on their terms in as little as one day, instead of the 60 days or more it usually takes to collect receivables.¹ The growth of our market-based receivables financing solution represents a fundamental shift in the way businesses access financing.”

Benefits of accounts receivable financing through The Receivables Exchange include:

Increased Liquidity: Access to cash in as little as 24 hours
Complete Control: Companies set all auction parameters, including minimum advance, maximum fee and auction duration
Lower Cost of Capital: Competitive real-time bidding drives down cost
Improved Debt Position: Receivables are sold as an asset versus traditional lines of credit, which are balance sheet liabilities
Less Restrictive: No all-asset liens, restrictive covenants or personal guarantees
Key Financial Benefits: Decrease Days Sales Outstanding (DSO), increase liquidity ratios, enhance ROE

About The Receivables Exchange

The Receivables Exchange is the world’s first online marketplace for real-time trading of accounts receivable. Changing the landscape of small business financing, The Receivables Exchange provides a new dimension in working capital management. The Exchange connects a global network of accredited institutional investors (Buyers) to the nation’s millions of small and midsize businesses (Sellers) in search of capital to grow. Buyers get direct access to an $17 trillion new investable asset; Sellers gain access to a new competitive working capital management solution by having their receivables bid on in real-time by multiple Buyers.

¹Average length of Days Sales Outstanding (DSO’s) of U.S. companies under $500 million in revenues (Source: The Wall Street Journal)