Sometimes it takes a while to figure out why a company has the name it does. Not so with Overnite Capital. Because in the case of this California-based lender, that’s exactly what they provide. Overnite Capital finances the commercial receivables for vendors to retail, so that the manufacturers selling product to retailers on net-30 or net-60 day terms can have the ability to draw cash against their invoices, in advance of payment from the buyer. Advances can be as high as 90 percent on the invoices, depending on the industry. For example, for a company selling apparel to retail, the advance may be 80 percent on the invoices.
“Overnite Capital began in 2007, after I had been in the brokerage business for a number of years for a company called Capital Solutions,” says co-owner Brian Battaglia. “I had 16 years experience in the business. Overnite Capital was started to fill a void in the market, for companies with two million to 40 or 50 million in sales, whose operators or owners do not want to pay a minimum commission, but want a reasonable rate and fast service.”
The company serves a broad spectrum of wholesalers, but if there is any specific concentration, it would probably be in apparel manufacturers. Battaglia attributes this to their being most amenable to the practice of factoring, since it’s well-known in their industry. But Overnite Capital is a generalist as finance companies go; it’s meant to handle any kind of business in which invoices are created and cash is on-hand. For those companies, the potential for growth and expansion exists as a result of doing business with Overnite Capital. The extra layer of capital that they provide can make the owner more money, but the service is not geared for companies that are on the downswing.
“The fact that a lot of our clients have never factored before is a bit of a challenge,” says Battaglia. “It’s a completely different concept to many, and since we’re a national company, you have to close that deal over the telephone, which I think we’re very adept at doing. But it still requires a learning curve. A company may have four million in sales, never financed before, then along comes this concept called factoring, which is different than a traditional bank line, because of the fact that we have to handle the cash–meaning that the customer pays a lock box, and we control that cash. That’s how we’re able to get comfortable making the loan.”
Overnite Capital’s pricing is pretty much the same as what a business would get if it qualified for a traditional bank loan, but the difference is the fact that Overnite Capital purchases receivables at a discount in order to lend the money.
“I separate it into two buckets,” says Battaglia. “You have the loan, and then you have the service element, our back office, that purchases the receivable to create that loan. And the business we deal with want to verify that we have a good service component to our back office, and that we’re going to treat our customers fairly, their customers fairly, and our clients fairly.”
2817 Carlaris Road
San Marino, CA 91108