DSA says it takes credit risks
By Clint Engel -- Furniture Today, May 5, 2008
Chicago — Howard Tolsky says that in these tough economic times, lenders have gone from one extreme to the other, tightening credit lines to the point that retailers can't make the purchases they need to remain viable.
He says his small firm, DSA Factors, is trying to do the opposite.
"We are making a concerted effort to take more 'borderline' deals and look for reasons to approve a company for a credit line as opposed to looking for reasons to turn them down," said Tolsky, president of the Chicago-based company.
He said the firm's experience over the past 21 years is that even during tough economic times, many companies still pay their bills "relatively promptly." Retailers may stretch paying out a few extra days, but because interest rates are low, it doesn't have much impact on DSA's operations, he said.
"We have experienced previous economic downturns, and what we've found then and now is that businesses are reducing their purchases, but they are still making their payments," he said.
The furniture industry accounts for about 70% of DSA's business. DSA purchases invoices, then collects on them. Tolsky said that being independent gives his company the flexibility to be more lenient than most when retailers fall behind, and said DSA is geared to taking slightly more risk.
But it's also limited by its size. Tolsky said DSA typically can work with suppliers doing $1 million to $15 million a year. He said the company's rates "are extremely competitive."
