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.
Small and large business owners in Scottsdale can take advantage of factoring services and turn outstanding customer invoices into immediate cash. This financial solution is ideal for business owners currently struggling with cash flow and who have all money locked in a pile of sitting invoices. Clients often don't pay for goods or services right away, causing financial distress for some companies. Invoice factoring can provide a reliable and fast solution by providing immediate cash to businesses.
The invoice factoring process with us:
1st Commercial Credit provides reliable and straightforward receivables factoring for all types of businesses that serve many industries.
Any business that has to wait months to be paid for temporary staffing services will be hugely affected. Struggles with the ability to meet payroll and pay taxes on time will come soon. In addition, the lack of cash flow will prevent these businesses from expanding the staffing agency and hiring new employees. This situation can stop the growth and ability from taking on big contracts. 1st Commercial Credit specializes in providing staffing agency loans and has an efficient and fast application and funding process.
Staffing factoring is a practical financial alternative for short-term or long-term financing needs for staffing firms of all sizes and stages. We also provide payroll funding for staffing agencies and forward you the fast cash you need within 24 hours after approval and receivables verification.
We know that even well-managed, profitable small and mid-sized staffing agencies will experience cash flow difficulties as they overgrow. This is why we focus on making the funding process for staffing agency loans easy and accessible. We will evaluate your company's needs and goals to choose a funding program that will satisfy all of your business needs. 1st Commercial Credit is a company that factors receivables in the healthcare staffing industry. We understand the unique challenges faced by staffing firms in hospitals, medical clinics, nursing homes, and long-term care facilities and have a broad range of financial solutions for you.
Invoice factoring is a form of financing in which a third-party lender (factoring company) buys accounts receivable in exchange for immediate cash (early payment). Factoring helps businesses experiencing cash flow problems caused by extended payment terms, which result in months for customers to pay invoices. While factoring transactions are often confused for a line of credit but they are more structured as a sale.
For each invoice purchase, a business and the finance company will go through a purchase agreement. As part of the purchasing process, the factoring company notifies the payer (your client) of the purchase and verifies the invoice's validity. No credit checks are required to qualify for factoring.
Another form of financing is an asset-based loan (ABL), a loan or line of credit secured using a company's assets as collateral. The collateral used can include accounts receivable and equipment, inventory, and other assets. Many asset-based loans are structured as lines of credit. They allow the company to access funds to pay business expenses or make new investments. The lender will use the assets' established value to determine the borrowing base, which is the sum of money a company can borrow. The borrowing base is an established percentage of the total value of the assets. For example, ABL lenders often offer a loan-to-value ratio of 75% to 90% for accounts receivable. Other collateral, such as equipment or inventory, is financed at a lower loan-to-value ratio, usually 50% or less.
Factoring is a kind of asset-based financing that is commonly confused with asset-based lending. While these solutions have some similarities, they are very different. The following information will show the differences between these funding solutions and help you determine the best fit for your business.
Some Differences Between Asset-Based Lending And Invoice Factoring
Asset-based loans and factoring services have significant differences, including:
Risk — Factoring is accessible for new and growing companies that may not be eligible for conventional bank financing. Because of this, factoring is considered a riskier form of funding for the lending company. In contrast, asset-based loans are only for more established and larger companies. While these companies may still have difficulties qualifying for bank financing, they are considered "bankable."
Size — Most asset-based loans start with a borrowing base of $700k and can go up to a few million. On the other hand, factoring financing lines have no minimums and can work with startups and small businesses.
Cost — Generally, asset-based loans are cheaper when compared to invoice factoring. The price of a factoring line is established by discounting the total value of the invoice by a percentage. Discounts can range from 0.69% to 1.59% per 30 days. On the other hand, asset-based loan prices are calculated at an annual percentage rate. This yearly percentage on ABL's can range from 7% to 15%, and variables like line size and risk can significantly impact the final costs.
Discretion — Because the factoring company owns your invoices, they will be the ones contacting your customers for payment. Suppose an invoice isn't paid by the due date. In that case, your customer can expect a follow-up call from the lending company inquiring about the payment. In addition, factoring companies generally will require that your customer make checks payable directly to them. When working with asset-based loans, the lender will not contact your customers, and they will not know about the lender's involvement. As a result, your business will continue handling the collections of your receivables and retain a good and private relationship with your customers.
Financing your business equipment is a great way to make expensive machinery and tools more affordable. The equipment you need to operate a successful business can be obtained through a purchasing loan or a lease. To begin with the financing process, you’ll need to find a specialized lender like 1st Commercial Credit and apply for financing. Many banks and credit unions make the lending process more difficult and frequently reject many applications. On the contrary, an alternative lender like 1st Commercial Credit offers higher approval rates and customized financing options tailored to your business needs.
Many businesses debate whether to replace their old and obsolete equipment, which can be costly or continue to operate with the same inadequate equipment and lose business. We know getting the appropriate equipment for your business may require additional working capital that is not always available. Our equipment financing loans and leases help companies get the equipment they need when they need it. With our equipment financing programs, you can obtain the equipment using either a lease or a loan. An equipment loan allows you to purchase the equipment with payments stretched over time, so you don’t have to give up a large sum of business cash straight away.