The Client: Funky Planet
Paul Abondano and his brother Sebastian design and sell several lines of radio-controlled helicopters, quadcopters, and cars from their Florida-based company Funky Planet and its sister-company Grooyi Toys.
It’s not an easy business. Kids get swept up in free-to-play mobile games and when there is a new “hot toy” it often fizzles out after a few months. Flexible and reliable financing is definitely important, Paul says. Unfortunately, they didn’t find it in “old-school lending.”
What Funky Planet Needed
Bank Loans Are Tough to Get
The brothers started the businesses in 2008, shortly after graduating from college. “There was a lot of uncertainty when we started,” says Paul. “Banks were strict about funding and financing startups.” They didn’t have solid financing options in the early years.
Waiting to Get Paid
It’s the typical dilemma of a manufacturer: the factory that makes your product wants to get paid sooner than your customer pays you. That makes it tough to pay your bills. “If I get a $2 million order, I have to go purchase the goods. The manufacturer might give me 30 days to pay, but it’ll be 60 days before I get anything from my customer,” Paul says.
Traditional Factoring Woes
The Abondano brothers tried factoring, a centuries-old type of financing which lets them tap into capital in unpaid invoices. But traditional factoring turned out to be constraining.
“With other companies, we had to sign an exclusive contract and had to factor every single invoice,” Paul says. It was adding unnecessary costs and headaches to running the company money. “It felt a little bit like submission; it’s like their contracts were created to get fees and fines.”
How BlueVine Helped
Then Paul found BlueVine—and factoring BlueVine-style. This gave Funky Planet more flexibility and convenience. “With BlueVine, we can choose a specific account or specific invoices within an account. Eighty percent of my sales are from 20 percent of my customers. So, the 20 percent are what I factor—my big invoices. And it’s enough to pull the whole business through.”
Working Capital Muscle
Eventually, BlueVine offered Funky Planet another option: a business line of credit. With BlueVine’s Flex Credit, the company had quick access to capital and they only pay for the funds the use. “The factories usually want a down payment with the purchase order,” explains Paul. “BlueVine’s Flex Credit line gives me muscle when I want to place orders. When I sell the goods, I can use factoring to pay off the credit line.”
Financing the Future
“I definitely recommend BlueVine. Based on five years of experience with other factoring companies, BlueVine has been by far the most pleasant and most profitable,” says Paul.
“In the next decade, when we develop the next cool product, we’ll have the infrastructure and financing tools to leverage the opportunity.”
About Growing Business With BlueVine
Our clients grow with us. They use BlueVine financing to address everyday funding needs and to pursue opportunities to take their business to the next level. This series aims to highlight the stories of small and medium-sized businesses that have grown and continue to grow with BlueVine.
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The information and insights in this blog post are provided for educational purposes only, and do not constitute financial advice from BlueVine. Please consult your financial advisor before making any business financing decision. For information about BlueVine products and services, please visit the BlueVine FAQ page.
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