Within the last thirty years no bank in the Southeastern United States has entered the factoring business in any way except by acquiring a factoring company that was already in business, or by a joint venture with an established factor (Affidavit of Clifton B
17. Types of activity which the plaintiff contends are all separate “lines of commerce” as to which the evidence may present questions of possible application of Section 7 of the Clayton Act appear to be restricted to the following:
(d) Automobile loans, including (i) direct loans to borrowers on the security of automobiles; (ii) indirect loans (discount of automobile dealer paper); and (iii) floor planning of dealer inventory.
Although not strictly a lending business, it serves a credit-related purpose by putting the factor’s assets to work instead of requiring borrowing from other sources by the factor’s customers (Affidavit of Clifton B
18. Factoring. American owns Southeastern Financial Corporation, which is a factor. It factored about $284,000,000 in accounts receivable in 1969. Of these accounts, about $177,000,000 were purchased from North Carolina clients. It has 172 factoring clients. Of these, 67% or 115 ar located in North Carolina. Its North Carolina volume is roughly 62% of its total volume of $284,000,000. The other 38% of its total volume was for concerns located outside North Carolina. The outstanding volume of accounts receivable being factored on August 31, 1969, was approximately $36,000,000. The entire volume of factoring in the nation at large, according to trade association reports for 1969, was nearly nine and one-half billion dollars. American’s 1969 factoring volume was about 3% of *636 that total. Although American’s main volume is in North Carolina, it does business in a national erican’s share of the more than $1,200,000 payday loans in West Virginia,000 volume of factoring in North Carolina in 1968 was slightly over 13% and it was third among factors in its volume of North Carolina business (Affidavit of Clifton B. Wilburn). Meinhart-Commercial Corporation and John P. Maquire & Company, with North Carolina business of about $245,000,000 each are larger.
Factoring is a process by which business enterprises acquire more capital and keep their own capital turning over faster. A factor purchases the accounts receivable without recourse but at a discount, and then collects the accounts. This enables the factor’s customer to get his money out of his accounts receivable without delay. Wilburn).
Wachovia is not in the factoring business now. It has advertised to its stockholders its intention to go into the factoring business. It has the financial resources and capacity to go into the factoring business. It has chosen to do so by purchase instead of direct entry. Its acquisition of American stock would put it directly into factoring by purchase of American’s control over Southeastern Financial Corporation, which is a factor. Wilburn, paragraph 10). The market is highly competitive. The testimony showed that Wachovia, after survey of the situation, concluded that it would not enter the factoring business directly but would do so by acquiring an existing factor. The large capital outlay and the difficulty of acquiring the necessary “know how” and personnel are two of the reasons for this decision. A third reason is that at least thirty factors are already actively factoring within North Carolina, and the buildup of factoring customers would be faced with intensive competition from those factors already in the business. The dollar volume of all factoring in North Carolina for the last full year for which figures are available (1968) was something over $1,200,000,000.
The acquisition of factoring companies by other large chain banks (H. A. Caesar & Company by First Union and Factors, Inc. by NCNB Corporation) (R. 154-55 and R. 34) shows that by purchase two other factoring companies have recently been added to the competitive list in North Carolina. It may even be that to allow the third major chain to purchase a factoring company will tend to heighten rather than reduce competition in factoring.
