The portfolio consists of approximately 150 small and middle-market clients that primarily serve the retail channel, representing approximately $4bn in annual volume of factored receivables.
Wells Fargo Bank will also acquire the client service application system currently used to manage these relationships. The portfolio and client service application system will become part of the trade capital division of Wells Fargo Capital Finance upon the closing of the transaction.
Wells Fargo Capital Finance is the trade name for certain asset-based lending, accounts receivable and purchase order finance services of Wells Fargo and its subsidiaries.
Reportedly, the losses in residential mortgage division ResCap has compelled the GMAC to focus on its core automotive lending business.
Stuart Brister, president of the trade capital division of Wells Fargo Capital Finance, said: “We look forward to being able to help them achieve success through the expertise we’ve gained in more than 50 years in factoring and through all the additional financial products and services Wells Fargo has to offer.
“As the market has tightened up for traditional bank loans, many people are seeking the services of asset based lenders,” reported Financial Times.
Bill Mayer, president of the commercial and retail finance group at Wells Fargo Capital Finance, said: “Wells Fargo is committed to helping small and middle-market businesses succeed. Being able to provide continuous service and financing for these clients during these uncertain times is another example of how we deliver on that commitment.”
