Accounts receivable financing is used by businesses to convert sales on credit terms for immediate cash flow. 1st Commercial Credit adopts a quick and simple approval process and expedites initial funding in 3 to 5 working days.
1st Commercial Credit provides a variety of purchase order financing solutions to meet your trade financing needs. P.O. financing is suitable for any wholesaler, reseller, importer or any company that purchases and resells goods.
The process of selling receivables to a cash flow lender in Birmingham differs from obtaining financing from a bank. Your invoices are sold to a specialized factoring company at a discount in exchange for an amount of cash. These invoices become the property of the factoring company responsible for collecting directly from your customers after the payment terms come to an end. Many times dealing with the bank is challenging and time-consuming. They also have strict requirements to apply for loans, and they usually demand a perfect credit history and substantial business collateral.
Our funding decision is not dependent on your company's creditworthiness. Banks will do an extensive assessment of your financial and credit history. In contrast, a factoring company focuses exclusively on the creditworthiness of your clients and their ability to pay the invoices. Banks often will determine loan rates, terms, and approval on your company's financial records.
Our financing alternatives and purchase order financing give you access to sufficient funding. It has become increasingly challenging to obtain business lending through other financial institutions, which has caused small businesses and startups to struggle to find a consistent and reliable source of funding to grow their business. 1st Commercial Credit will ensure you get the funds you need as long as you can provide accounts receivable invoices to sell. The funding process with many factoring companies is fast and straightforward, and a decision can even be made on the same day.
Factoring invoices comes with many advantages, and the main one is that it offers a debt-free funding solution for businesses. Additionally, factoring will simplify the process to get the fast cash you need to expand your services and meet payroll without incurring debt with a bank.
5 main differences between a bank loan and invoice factoring:
Waiting extended periods to receive payment is expected in the healthcare industry, especially for medical staffing agencies. If slow-payers are hurting your cash flow, you could benefit from being paid “sooner” with our medical factoring services. There are many different types of medical companies that benefit from healthcare accounts receivable financing. 1st Commercial Credit works closely with clients to devise customized and flexible financing arrangements for healthcare companies that help immensely as they routinely experience expenses and slow-paying customers.
Our factoring services offer a fast and straightforward solution to obtain working capital for your medical staffing firm. With sufficient funds in hand, you can have the ability to hire new employees, open new locations and expand your business. There are no limits to the funding you can obtain because it increases along with your invoiced sales. Medical factoring is a financing option that allows you to grow your financing without worrying about cash flow shortages.
We have over 18 years of experience factoring healthcare receivables for companies in Birmingham in need of funds to cover their payroll responsibilities. Medical receivables financing is incredibly beneficial for staffing medical businesses to maintain a positive cash flow when their customers take weeks or months to pay them for their services.
Many companies in Birmingham find traditional financing to be costly and challenging to obtain; this is where 1st Commercial Credit's invoice factoring program comes in. The fastest way to access cash upfront is through a factoring company that can provide immediate and simple funding. 1st Commercial Credit can assess, approve, and provide financing within 3-5 working days. Accounts receivable factoring is an ideal financial solution to improve cash flow when payments from customers take 30 days or more. Distribution factoring is typically the perfect alternative for your business if:
Once you have determined that factoring in your receivables is the right solution for your company, the next step involves evaluating a list of potential factoring companies in Birmingham to find the best rates and services. When searching and selecting a factoring company:
A business owner who doesn't take care of cash flow problems might miss out on business opportunities, be forced to make late payments, and struggle to fund payroll. Eventually, the business will run out of money for fixed expenses and growth opportunities and could risk the company's future.
Everyday situations causing cash flow shortages to include:
Utilizing invoice factoring services to solve cash flow problems can empower your business to grow and succeed by having a safety net to avoid possible financial trouble. Covering business expenses and paying off current debt can be a struggle when the cash going out of a business exceeds the amounts coming in. Invoice factoring solves cash flow issues. It gives your business the push it needs to excel in this competitive industry. 1st Commercial Credit is an experienced invoice factoring company in Alabama with supply chain finance solutions and can evaluate your Birmingham business's receivables today and provide a solution.
Obtaining new and bigger contracts is crucial for any manufacturing business in Birmingham. The ability to grow will depend on having access to the resources necessary to run operations. Because of this, companies need to find the right financial solutions and partners to manage short-term cash flow needs to fund growth. Invoice lending arrangements can be particularly beneficial to those businesses that lack collateral or have had financial challenges in the past.
A Factoring manufacturing company helps businesses that may not be eligible to qualify for traditional lending arrangements for several reasons, including:
Factoring companies can use the value of outstanding accounts receivable to collateralize lending arrangements and provide necessary cash advances to manufacturers. We base our approval decisions mainly on the creditworthiness and reliability of the customers who owe you money. Because of this, manufacturing businesses can often be approved for these loans and lines of credit much more quickly.
Asset-based financing for small businesses
Meeting specific short-term cash needs means that small businesses will need access to working capital while using short-term assets as collateral for financing. Common types of asset-based financing include:
Accounts receivable financing is a secured loan in which a company's accounts receivable are pledged as collateral in exchange for cash. This type of loan is repaid within a specified short-term period as the receivables are collected. Accounts receivable financing is commonly used by businesses facing short-term cash-flow problems. The primary source of accounts receivable financing for small businesses are factoring companies.
Inventory financing and factoring
Inventory financing has some similarities to accounts receivable financing, but the main difference is that your business' current inventory is used as collateral to secure a loan. You can anticipate a conservative valuation of your inventory. An average lender would lend anywhere from 60-80% of the value of your retail inventory. This percentage will be different for different companies and is based on various factors, including the merchantability of the inventory.
The loans have similar interest rates to AR lending and are typically short-term. A common use of inventory financing is to purchase new inventory, especially when an upcoming season requires businesses to keep additional inventory in stock.
Factoring is simply the sale of a company's receivables. Selling your invoices for future payment helps you generate cash sooner than if you waited and collected the money on your own. The factoring company that purchases your receivables takes ownership of the invoices and the responsibility of collecting them when they are due.
If you've determined that factoring is the best solution for your businesses, it will offer many benefits, including:
Factoring agreements can be pretty flexible, and you should always try to negotiate for the best terms possible before selecting your factoring partner.
Birmingham has a metropolitan population of around a million people and is the largest city in Alabama. Birmingham is also famous for serving the best fried pies and barbecue. Additionally, Birmingham is a national leader in urban green spaces and has thousands of woody acres for biking and hiking within minutes of downtown. The University of Alabama, located in Birmingham, is a global leader in healthcare and is currently at the top of transplant centers in the world.
Birmingham has the culture and tools that allow for innovation and entrepreneurship. The local government strives to provide economic growth and stability for residents, businesses, and persons looking to do business in Birmingham. This diversified, knowledge-driven economy is strengthened by established and emerging sectors building on the city’s competitive strengths and providing job opportunities in various occupations and skill levels. Birmingham’s key industries include healthcare, tourism, financial services, primary and fabricated metals manufacturing, distribution, and emerging industries such as digital information and media, life sciences, and specific advanced manufacturing specializations.