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.
1. What is invoice factoring?
Factoring is an alternative form of financing where a company sells some or all of its outstanding invoices to a factoring company to improve cash flow and financial stability. The factoring company will pay you a significant percentage of the total invoice amount right away, and then it will collect payment directly from your clients. Factoring is also known as accounts receivable factoring or debt factoring.
2. How does factoring work?
The process of factoring looks like this:
3.When should your business use factoring?
When your business is constantly dealing with piles of outstanding invoices due in several weeks to months, invoice factoring could be the financial solution to save you from financial distress. It is usual for many industries to have 30+ day payment terms.
What this means is that often companies will have to wait that established time before receiving payment. Your company has money that should be flowing in the cash flow that is instead stuck in stagnant invoices.
In order to have access and use this money immediately, selling these invoices to 1st Commercial Credit for receivables funding is the answer which will allow you to release a considerably large part of the total invoice amount. With this fast cash, your business will be able to:
4. Advantages of factoring with 1stCC
Working with a company that factors receivables can bring many advantages to your business.
Here are a few of those benefits:
Immediate, predictable, and improved cash flow: when a company uses invoice factoring, a bulk of the invoices are paid immediately without waiting an extended period for payments to come in. businesses can plan and forecast for the future without lacking the working capital to continue operating.
It is easier and cheaper to obtain than a bank loan: a great alternative to a bank loan because of its easy approval and funding process. It is excellent for businesses looking for short-term funding needs.
Allows businesses to continue growing and thriving: many companies have to give up because they cannot survive without cash flow. Factoring offers a reliable and safe alternative for businesses to access the working capital they need to cover daily operational expenses while waiting for payment.
As a staffing agency owner, you know a wide range of financial obligations must be covered, from worker insurance to marketing and office equipment. But the major financial challenge is payroll funding. Many staffing agencies choose to work with a lender that offers payroll funding for staffing agencies to avoid issues with making payroll each period.
Some of the benefits companies experience when working with a payroll factoring company include greater flexibility for growth, consistent and reliable cash flow, and the ability to cover expenses on time, especially payroll for temp employees.
When a staffing firm establishes an account with a factoring company, it can simply submit the invoices it wants to sell along with supporting time cards to 1st Commercial Credit for the current period to receive the payroll funds. Once the submitted invoice is verified, a percentage of up to 97% will be immediately transferred to your business account. The remaining percentage will be held in a reserve until your clients pay the invoices in full.
Payroll factoring will help your business in the following ways:
A few things will be looked at when a factoring company like 1st Commercial Credit receives a prospective client looking for healthcare receivable-based financing in Mesa. Lenders will base their decision on several factors, and one of them is the net realized value (NRV) of the receivables.
The primary purpose of this assessment is to establish the quality of the receivables that will be considered for the borrowing base (funding base). This evaluation will also help determine the advance rate.
The second thing is conducting a third-party payer analysis and compliance review. Since the lender company or asset-based lender will be collateralizing on the receivables, this review will identify clinical liability issues that expose the client and the finance company regarding the receivables.
In addition, the lender will evaluate proper licensing, a review of current surveys, and payment frequency for each payer class. Lastly, financial statements will also be evaluated. Funding decisions are not solely based on a good balance sheet, but it’s helpful to see proof of profitability.
Factoring companies focus mainly on the quality of eligible receivables and the competency of the billing department. Therefore, account receivable loan decisions are not based solely on the balance sheet that may show significant fluctuations. However, as long as it can provide proof of profitability, the factoring company may still go forward with funding the client.
Healthcare providers are choosing medical accounts receivable factoring as a viable option to fund their growth. Receivable-based financing creates predictable cash flow in an unpredictable payment cycle industry. Healthcare factoring companies can help healthcare providers that bill private insurance or Medicare/Medicaid for medical services and need to get paid sooner.
Some examples of clients working with 1st Commercial Credit in Mesa include medical staffing companies and:
To qualify for medical factoring is relatively easy. Still, the following requirements should be fulfilled:
Some of the prominent industries in Mesa are healthcare, aerospace/aviation/defense, education, tourism, and technology. The economic development taking place in Mesa is due to the city’s quality infrastructure, strengths, talented workforce, projected growth, and global market trends.
In healthcare, Mesa has world-class specialty and general hospitals. It is also home to Banner Simulation Medical Center, the largest simulation training center in the southwest. The healthcare and bioscience jobs have grown 45% over the last ten years.
In education, Mesa has more than 40,000 students enrolled in Mesa’s higher education. Mesa also has the largest school district in the state and is recognized nationally because of its excellent education programs and student achievements.
Mesa is home to the Mesa Arts Center, the largest arts center in the state. More than 46 million visitors visited the state in 2019 and collectively spent over $25 billion in the state.
Mesa is close to Phoenix, about 20 miles east, and it is currently the third-largest city in the state with a population of 500,000. Mesa is known for its beautiful views of the Superstition Mountains, desert climate, and occasionally an intolerable heat during the summer. Nevertheless, Mesa has transformed into a vibrant suburban city rich with history and diverse culture.
1st Commercial Credit is a company factoring receivables for Arizona and various cities including: