David Tatge Quoted in Article, “Ancient Practice Found Fertile Ground in L.A.”
March 18th, 2013
David Tatge was quoted in an article titled "Ancient Practice Found Fertile Ground in L.A." in the Los Angeles Business Journal.
Following is an excerpt:
"The history of factoring is the history of commercial finance in America," said David Tatge, author of 2010 book "American Factoring Law." ?...
"The American factor no longer acted as a commissioned sales agent," Tatge says in his book. "Instead, the factor now emerged as a commercial financier and purchaser of its client's receivables, while also making loans against the security of client-owned inventory." ?...
Tatge's book refers to 1987 articles in the Wall Street Journal and Fortune magazine that express the perception: "Historically, the factoring business has a smell about it, usually because firms that sell off receivables have tended to be strapped for cash. To get quick money, they sell their accounts receivable to last-resort lenders, typically at steep discounts from face value."
Tatge rebuts this perception, noting that the American factoring sector since then has expanded into a huge industry, reaching $135 billion in volume of factored goods in 2007, according to a survey from the International Factoring Association in Pismo Beach. He told the Business Journal that recourse factors now account for about 25 percent of that volume; the other 75 percent are nonrecourse factors that take the hit themselves if end customers don't pay or pay late.
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