Sami Boutaleb on the story behind Montreal Heritage Capital

Phil Siarri talks to Sami Boutaleb, CEO of Montreal Heritage Capital, the only Canadian factoring company to entirely specialise in governmental, para-governmental and health segments.

Hi Sami, nice to meet you. Can you tell us about your background and professional experience?

First, thanks Phil for holding this interview! Regarding my educational background, I did my BBA at HEC Montreal and my PLD at Harvard Business School. As for my professional background, I have over 15 years of experience in business development. After holding senior positions in the pharmaceutical industry, I pursued my career in financing solutions, which allowed me to become a shareholder of private companies specialised in asset-based lending, invoice financing and factoring.

I’m currently director of the International Factoring Association — Quebec Chapter. I’m also chairman of the Montreal Connexions Group, executive director of the Quebec Young Trading Boards of Commerce Association, and ambassador for the Montreal Museum of Fine Arts.

What’s the story and concept behind Montreal Heritage Capital?

MHC is a specialised financing company offering unique solutions to SMEs working with the governmental and healthcare industry. Our niche includes all suppliers working with municipal, provincial and federal agencies. We provide our partners financing solutions that no other bank in Canada offers. We don’t replace their financial institution. What we do is partner with our customers for specific projects when they need immediate access to capital.

Our flagship product is factoring. A factor is a financial intermediary that purchases receivables from a company. Factoring is essentially a funding source that agrees to pay the company a percentage of the value of the invoice less a service fee. The factor advances the invoiced amount to the company and the balance upon receipt of funds from their customer.

Montreal Heritage Capital will act as a growth partner, and we’re committed to providing a unique, quality service. We set up an in-house database management process and a strict monitoring call protocol. We treat our customers as we would like to be treated.

What are the minimum criteria to qualify for financing with your company?

  • Annual sales greater than $500,000.
  • Accounts receivable between $5,000 to $200,000, up to 180 days’ terms.
  • Growing company currently overgrowing their credit line capacity.

Once we have all the documents required, we’ll review internally and come back to them with a go/no-go, with the amount, within four days.

What is your strategy to educate prospective clients and partners about factoring? Do you sometimes encounter resistance?

We understand that access to cash flow is the main challenge faced by growing companies, and that’s why we position ourselves should they ever require immediate access to capital. This ensures they can take on new projects and manage existing ones at full capacity when they’re in negative cash flow cycles. We don’t replace their existing financial institution — we’re like their short-term corporate credit card. We’re their financial partner that’s on call 24 hours a day to make sure their growth has no restrictions.

Right now, private finance isn’t a regulated industry in North America. Do you think this could change in the future? If so, how would this affect your business model?

As the financial services industry is shifting towards digitisation and undergoing a fundamental transformation within its regulation system, all players need to understand the necessity of digitising all aspects of the sector and go beyond the borrowing and lending processes, and include investment management, retail payments and market analytics. The key is that the use of technology has infinite applications, and can provide more leads as more data is gathered over time.

For companies in the financial services industry that cannot undergo a total digital transformation, (stress too high on current systems, not enough resources, and so on), the use of third party software is also a viable solution. In fact, there’s a multitude of newcomer third party technology companies whose aim is to serve companies that want to leverage the power of technology, but cannot undertake a total shift in their strategies towards digitisation. As an example, Bectran — a leading SaaS platform — has teamed up with the Credit Management Association (CMA) to create a new service accessing trade credit data from the three main credit reporting bureaus. This will help customers access more pertinent data on the click of a mouse, and the information can be tailored for the businesses’ specific needs.

The use of third party software can serve as a transition phase for companies that want to do a complete digital shift in the future, or save costs by outsourcing part of their processes to third parties.

All these innovations are currently being scrutinised by US Congress, and may in future become regulated. I believe Canada won’t regulate until then.

Read the rest of the interview on BankNXT

Founder of Nuadox | Tech & Innovation Commentator | Digital Strategist | MTL | More about me> psiarri.xyz