The founders behind Towercap have been active in the telecommunications market since early 2012. They started Towercap recently to provide custom-built factoring solutions that are purposefully non-traditional. The founders – Dean Rosenthal, Larry Raff, and Saul Gewer – include two chartered accountants and a telecommunications lawyer respectively, that set out to develop a factoring service to meet the unique requirements of small and medium-sized businesses in the tower industry.
Towercap is an alternative lender, able to make capital available rapidly and in much larger amounts than would usually be available from banks.
“While conducting business in the international long-distance voice space – very distant from the tower space – we recognized a commonality. The same lack of financing in one was also a challenge in the other,” said Saul Gewer, Chief Operating Officer. “The networks have been pushing the tower companies’ payments out 60, 90 and sometimes even 120 days which hurts cash flow for small and medium-sized companies. We knew there was a better way to manage the process.”
Towercap provides factoring services in a manner that 100 percent focuses on tower construction and tower servicing businesses. Due to nuances that exist in the tower space, Towercap has designed a product that considers some of the realities of being a service provider in the tower industry, such as having to pay crews regularly, buy fuel, purchase materials and more.
“Unless significant capital exists within the business, these seemingly straightforward operational tasks can become herculean feats,” said Gewer. “We understand the tower space and clients’ needs and can commit capital quickly since we know the industry and the risks. Because we’re not a bank, we’re agile and able to provide custom solutions to our customers. It’s not a one-size-fits-all approach.”
One factor that makes Towercap unique is that they can finance on a non-disclosed basis, where required, meaning they’ve designed a process where their customers don’t even have to tell carriers they’re working with a third-party factoring house – invoices get paid and business continues as usual. It’s a seamless transaction that keeps everyone on track from a financial standpoint.
Another differentiator is that Towercap offers non-recourse financing. When customer invoices are approved, the payment is made up to 90 percent of face value on day one, and then Towercap waits for the third-party to pay them.
“Towercap won’t come back and ask for money if an invoice doesn’t get paid. We don’t do that; we take on the credit risk ourselves so our clients can anticipate their cash flow and have confidence that they’ll receive payment on time, in full,” said Gewer.
Working with smaller businesses in the tower space, Towercap has the capital necessary to factor invoices – having already financed more than $1.2 billion invoices in the telecoms space since they started. Since the company is not a bank, they can work faster and provide much greater access to capital than a bank can in a loan scenario.
“As a result of accessing capital, one customer’s business has grown ten times over in the past 12 months. They originally came to us for $120,000 and now require upwards of $1 million in factoring services,” said Gewer. “A bank would not have been interested in funding the initial need, but we did, and the business grew because of it. That’s a great feeling for everyone involved.”
As a growing company themselves, what does the future hold for Towercap? With 5G on the horizon, the entire industry is poised for a significant growth spurt. As the race gets on to deploy the next generation network quickly and efficiently, the workers and companies in the tower space will be doing more – and that requires capital.
“For a company to take advantage of the impending growth that is 5G, it needs to be well-funded to take on as much work as possible,” said Gewer. “We are proud and excited to be partnering with tower construction companies and tower servicing companies as they embark on the journey to provide America with its next generation network. We’re here to support that today and tomorrow.”
Towercap is in New York, New York and has financed over $1.2 billion in invoices. Their team of finance and telecom professionals has the experience, expertise, and understanding to provide customers with a customized finance solution tailored to their needs. For more information or to contact the company, visit https://towercap.com/.
May 17, 2019
The post Towercap: Working Capital Solutions at Your Fingertips appeared first on Inside Towers.