Does NOA = DOA?

“I don’t want to look weak.”

“Won’t it look like my business is failing?”

“I’m not sure how I feel about you contacting my customers.”

I hear some version of these 3 statements on almost every introductory call I have with a prospective client. Every business owner has the same fear when it comes to financing their Accounts Receivable: Notification of Assignment.

What is Notification of Assignment (NOA)? When Dare purchases a customer’s invoices, we notify our customer’s customer that the invoice will be paid to Dare. That’s what NOA means.

Simple, right?

But ahead of time? It is like a fear of needles for a shot or having your blood drawn. Tons of fear for something tiny, quick, and relatively harmless. People automatically believe this simple process means it is doomsday for their business.

Last week, a subcontractor in South Carolina almost ended our call when I mentioned this process. “I CAN’T DO THAT” he suddenly yelled in the middle of an otherwise pleasant conversation.

Why?

I understand the fear of looking weak. No one wants to look weak in business especially in the construction industry. ?I also understand that invoices are a business’ most valuable asset. It is your hard work personified in soon to be dollars and cents. Selling them to another business is an emotional decision for most business owners but notifying your customer? Where does that fear come from?

It does not come from our client’s customers. Rarely does a customer ever react or feel the way our client fears that they might on our introductory call. I believe most clients discredit the value they bring to their customers. Their customers don’t expect them to be a bank. Customers want to continue working together.

The fear does not come from Dare’s practice or NOA procedures. Sure we could tell your customer that your business is failing so you have to sell your invoices. But that is never the case. Why would be buy invoices from a failing business? Wouldn’t that hurt us? Who would actually tell that story anyway?

“Hi Mr. Customer – We wanted to let you know that the XYZ company is failing. We’re here to bail them out of their awful decision making.” I doubt that happens in reality. Ever.

For us, most of our clients are growing businesses and a lot are high growth businesses (think $500,000 of revenue in 2020 and on target for $7,000,000 in revenue for 2021). We highlight that growth in our NOA letter. But we don’t send letters out of the blue.

We encourage our clients to talk with their customers first. Explain what’s going on and prepare them for the process. Communication is key in life and no less so here. We help our clients with this conversation then send a letter behind highlighting our client’s growth.

Does that sound scary?

Maybe it does. Maybe it doesn’t.

Either way, the initial fear is a reality of every introductory call but it doesn’t necessarily mean ?that every deal is dead on arrival.