Categories: Case Studies

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Andy Cagle

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Golf shoe distributor utilizes a total accounts receivable financing and management solution from LSQ to grow its business.

Since 2009, KloneLab has been supplying premier athletic and lifestyle brands to some of the largest retailers in North America. Currently the company distributes Callaway and New Balance golf shoes to Amazon, Golf Galaxy, The Golfers Warehouse, and hundreds of pro shops.

In KloneLab’s licensing and distribution business, working capital is essential: manufacturers have to be paid in a timely manner, which can be difficult when buyers push out payment terms to 60 or 90 days.

“KloneLabs started working with an accounts receivable financing company on day one in 2009,” said KloneLab CFO Brian Seppa. “But there were some major gaps in the solutions they provided. So when I joined in 2013, we started looking at other companies that could do more things.”

According to Seppa, one of those things was inventory finance in addition to financing receivables. In his search, he was referred to LSQ.

“(When I first met with LSQ) we just kind of hit it off and the numbers made sense,” Seppa said. “Honestly, I don’t think we even looked at anybody else, and just signed up with LSQ and have been working together for nine years now.”

A Total Accounts Receivables Management Solution

Since the beginning of KloneLab’s relationship with LSQ, the services have gone beyond simply financing.

“When we first started, we were using LSQ not only as a credit facility but as a receivables department as well,” said Seppa. “You guys were also handling the collection side of it, making calls and that aspect of it because we just didn’t have the bandwidth.

“In order for us to handle what I’d call all the back office AR, we’d have to go out and hire a credit manager and then we’d have to go hire two people on top of that to handle the receivables (that LSQ handles for us).”

Data for Better Credit Decisions

klonelab uses lsq to finance accounts receivables and manage ar to distribute callaway golf shoes and new balance golf shoes

For many companies, assessing the creditworthiness of customers and potential customers is a hard problem to tackle. KloneLab finds itself in that category. LSQ helps them make credit decisions when they are looking to start new relationships.

“What LSQ does is set a credit line per customer,” said Seppa. “If I went to my account manager and said, ‘I need a $200,000 credit line,’ LSQ would come back and say yes or no or we will only give you $50,000 because the numbers out there for that company aren’t that great.

“It really gives us insight into how to assess customer risk without having to hire a credit manager.”

A Long-Term Relationship

After nine years of working together, Seppa doesn’t see the KloneLab/LSQ relationship ending anytime soon.

“Even if we were so inclined to move to some other form of financing,” Seppa said, “it would be hard to replace the value of all the AR management and credit services LSQ offers.”

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