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In 1935 the United States was in the throes of the great depression, but Walter Heller, a prominent Chicago asset-based lender, was a rock-solid component of the Midwestern economy. With Ralph Carlson, Heller decided to enter into what for the Midwest was new territory. It was called factoring.
Factoring existed in those days but only in New York, the center of the garment industry, where it provided working capital to typically small and medium-sized apparel manufactures who were struggling to pay suppliers because their customers didn't pay them fast enough.
Heller made factoring a national industry; starting first in the Midwest, he made it available to businesses like furniture, toy, shoe, and lumber companies.
Heller was also a full-service factoring company, purchasing a manufacturer's accounts receivable, extending an instant credit line of cash, providing collection and billing services, as well as charging a fee, which included a percentage of the receivables and interest on cash borrowed.
Walter Heller pioneered factoring in the United States, expanding its influence beyond the garment industry and making it available throughout the country to businesses that held promise. His expansion of factoring took place at a time in this country when help for struggling businesses was difficult to find. He was a successful financier whose vision not only established the feasibility of independent factors but eventually led to banks embracing factoring through subsidiary companies.
Cash flow professionals can be thankful that the industry's pioneers are ready and waiting to blaze the trail to the next great discovery.
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