In the News

February 13, 2020

 

Every business is different. Whether it’s differences in the goods/services offered, general operations or size, no two businesses are cookie cutter versions of one another. In recent years, the credit industry has proven this true with the incorporation of technology in credit departments: Some are “set in their ways,” while others utilize new solutions. But what about those that don’t have the option, yet want to adopt new tech? For example, small businesses.

Not all small- to medium-sized businesses (SMBs) have sworn off technology; however, being a smaller business comes with its own challenges. According to PaymentsSource, for instance, SMBs’ ability to use new payment solutions varies based on whether they have the resources. Despite many companies forming in the age of technology and expanding globally, companies’ operations haven’t adapted.

“The combination of these two trends means that small- and medium-sized businesses are desperately in need of partners who are as global and nimble as they are,” an article in PaymentsSource stated. “With political headwinds such as Brexit and the trade war further threatening to destabilize worldwide markets, decreasing business confidence, and putting costs and efficiency front and center—it’s at the intersection of SMEs (small- to medium-sized enterprises) and B2B (business-to-business) credit where we’ll be seeing the future of payments.”

Even if such partnerships arise, finding a solution that best fits small businesses is a separate roadblock. During an interview with PYMNTS, Matan Bar, co-founder and CEO of Melio Payments, said the majority of payment solutions today are built to handle large amounts of invoices, whereas SMBs may see only “60 to 80 payments a month.” Although automation is beneficial, many of the current solutions don’t push enough SMBs away from paper checks.

For Credit Manager Yokaira Acosta, one of the reasons his company integrated technology was because it had the money to invest. Technology is changing the credit department’s operations, he said, and it was time the company embraced it.

“We want to stay competitive and make it easier for the customer to view products online and pay for their bill securely online,” said Acosta, who works for a company of approximately 500 employees. “Customers provide their credit card [information] securely on our website, and we are still working on making changes.”

At ELIX Polymers, another small business, Credit Manager Marc Molines said digitalization was completed to automate reports to monitor debt and feed the credit model, and is now underway to automate approval workflow. Similar to Acosta, Molines said it’s tough for SMBs to invest and then generate a Return on Investment (ROI).

Technology has helped Molines automate the major part of the order-to-cash process in addition to accessing rating agencies’ data. The platform he is in the process of implementing will allow him to automate the approval workflow of credit lines.

“Also, Blockchain to secure payments must be used when it is proven and working, and the automation of the banking process or cash allocation process—when the portfolio is extensive—can be easily profitable,” Molines said. “In my opinion, without technology and because of the size of my credit department, I would have become crazy.”

 

 

The home of The Great American Irish Festival is facing hundreds of thousands of dollars in liens following the latest one from a contractor. According to WKTV in Utica, New York, the Irish Cultural Center was recently hit with a nearly $217,000 lien by a contractor. This brought the total amount of liens on the multi-use event, museum and restaurant space to roughly $340,000. However, the center’s developer is not worried about liens on the property as this is typical for construction projects.

"Just because it's filed for that amount doesn't mean that amount is due," Vaughn Lang told WKTV. "The amount owing is in controversy. It's a typical thing for the amount owing to be in controversy." He will dispute the dollar amount of the lien in New York State Supreme Court. "It doesn't bother me that some contractor or any contractor files a mechanic’s lien because I'm so used to this. I deal with it all the time as an attorney," he continued.

Another lien previously filed for roughly $67,000 is also still unpaid.

While some states require documentation such as a preliminary notice before any mechanic’s lien discussion can begin, New York does not. Nevertheless, NACM’s Secured Transaction Services suggests serving the notice 45 days from last furnishing to prompt payment. With that said, that doesn’t mean no documentation is ever required to file a lien in New York because it is, and there are certain timeframes that must be met to form a valid lien. This is similar to any lien statute—to have a valid lien and rights to become a lien claimant, timeframes must be followed.

Lien claimants have eight months from last furnishing, among other deadlines, to file a notice of lien on private commercial projects. This notice can be filed at any time during work on the project as well. The notice of lien must also be filed in the county clerk’s office where the project is located—and in all county clerk offices if the project is in more than one county.

A copy of the notice of lien must be served to the owner “within five days before or 30 days after filing the notice of lien,” according to Section 11 of the state’s lien law. Within this time, there are several steps that must be completed to satisfy serving the copy of the notice. Two ways to fulfill this obligation are: delivering to the owner, their agent or attorney personally and certified or registered mail to the last known place of residence.

For a copy of the notice of lien to a contractor or subcontractor, those lower on the supply chain must serve the notice copy to the “contractor, subcontractor, assignee or legal representative for whom he was employed or to whom he furnished materials, or if the lienor is a contractor or subcontractor to the person, firm or corporation with whom the contract was made” via certified mail. A claimant with a direct contractual relationship with a sub or sub-subcontractor but not with a contractor must also serve a copy by certified mail to the contractor.

“Failure to file proof of such a service with the county clerk within 35 days after the notice of lien is filed shall terminate the notice as a lien.”

 

 

Because the term “consumer” is so broad in the California Consumer Privacy Act (remember: it’s any California resident), it would have applied to employee and job applicant data and all business contact information across the board. After much negotiation, the legislature enacted (and the Governor signed) two amendments dealing with this information. Until Jan. 1, 2021, the California Consumer Privacy Act (CCPA) will not apply to information collected about employees or job applicants, or in typical business-to-business (B2B) transactions by a business otherwise required to comply with CCPA.

Employees and job applicants. Certain information collected from, or about, employees and job applicants in the course of employment will be outside of the scope of the CCPA until Jan. 1, 2021. This includes emergency contact information, so long as it is only used for that purpose. It also covers information that an applicant, employee, etc. provides in the context of applying for or receiving benefits for that individual or others related to the individual, again—so long as it is only used for that purpose. This leaves any other information that is received from any of these individuals in any other context. Examples are when an employee makes a purchase or signs up for a newsletter. Businesses covered by CCPA are still required to give employees/job applicants notice of the collection/use practices and are also prohibited from collecting additional information or using it for additional purposes without first providing notice. Notices must be given “at or before the time of collection” of the information. The amendment does not apply to the employee or job applicant’s private right of action under Section 1798.150 in the event of a data breach of such information.

B2B information. This amendment temporarily exempts “information reflecting a written or verbal communication or a transaction between the business and a consumer, where the consumer is a natural person who is acting as an employee, owner, director, officer or contractor of a company, partnership, sole proprietorship, nonprofit or government agency and whose communications or transaction with the business occur solely within the context of the business conducting due diligence regarding, or providing or receiving a product or service to or from such company, partnership, sole proprietorship, nonprofit or government agency.” The amendment takes out of the CCPA scope any personal information in this context, whether the business the buyer or seller of goods or services, including when the business is preparing to buy or sell goods or services. The exemption in this amendment extends request for deletion (§1798.105), request to know (§1798.110), disclosure of information sharing (§1798.115) and §1798.135 (implementing do-not-sell requests). The amendment does not exempt a CCPA-covered business from its “Do Not Sell” obligations, therefore, if your business collects this type of B2B information and “sells” in the meaning of the CCPA, you will be required to put a “Do Not Sell My Personal Information” link on your website, or provide some other means by which individuals can opt-out of such sales.

These amendments automatically sunset on Jan. 1, 2021 unless the legislature takes further action in the 2020 legislative session.

Cynthia Larose, Esq., is chair of the Privacy & Cybersecurity Practice of Mintz Levin Cohn Ferris Glovsky and Popeo PC. Cynthia has extensive experience in privacy, data security and information management matters, including state, federal and international laws and regulations on the use of transfer of information, data security breach compliance and incident response and data breach incident response planning, as well as data transfers in the context of mergers and acquisition and technology transactions.