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.
Financing accounts receivables is often the answer to problems revolving around cash flow and credit extensions offered to clients. Factoring loans have become a safe and reliable alternative for financing needs for any growing business. In summary, factoring is a financial tool allowing you to finance those invoices from slow-paying customers. However, just like with any form of financing, factoring has both advantages and disadvantages, and it is crucial to figure out if factoring is the right fit for your business.
Some of the advantages of factoring for a business selling on credit terms include the ability to increase funding alongside sales as long as you are selling to creditworthy clients. Other benefits of invoice factoring services include:
Disadvantages Of Invoice Factoring
As we mentioned before, factoring might not be the best solution for all. There is no perfect solution, and invoice factoring does have some disadvantages as well. It is crucial for business owners to be aware of every detail to make an informed decision.
Among the disadvantages we have:
The cost of factoring financing is considerably higher than the cost of other types of funding. However, the factoring fee is based on every transaction and is exclusively charged when a transaction occurs.
Solves a very particular problem. Factoring is specifically designed to address the cash flow issues created by slow-paying clients. If you have other financial issues, or if you need capital to buy equipment, factoring might not provide the funds required for that.
Your customers will know. Your customers will be aware that you are using this type of financing. They receive a notice advising them of your factoring relationship. Clients sometimes might feel a bit uncomfortable about the interaction with the factoring company at first. After a while, it usually is not a problem.
Your invoices will be verified. Most factoring companies will verify the invoices with your customers to ensure that they are accurate and that your customers are satisfied with the products/services.
Staffing agencies can grow quickly and bring in a lot of money if managed adequately. With that said, staffing agencies require owners and managers who have experience in the industry to make it succeed. 1st Commercial Credit has over 18 years of experience financing this industry and provides a source of funds for temporary staffing companies. Here we present a couple of tips to help take your temporary agency firm to the next level.
Choosing the right industry to serve
Examine and research the market needs to make sure your staffing firm can fulfill them. It is also crucial to know the supply/demand cycles of the select industry. Most temp staffing agencies are found in the following segments: industrial, professional/technical, and office/clerical.
Establish startup and operational costs
Operational and establishment are the two types of costs that need to be considered. Establishment costs include those required to set up basic business needs. Some of these can be a one-time cost and must be covered before the business even takes its first client. Examples of these types of expenses are computers, legal setup expenses, office, insurance, and software, to mention a few. On the other hand, operational costs arise from finding employees, clients, and delivery during those few first months.
Understand the business’ cash flow
Not understanding how cash flow works can be a huge mistake made by operators. For example, in the staffing industry, a firm must make payments to employees weekly or biweekly while at the same time, you wait 30 to 90 days to receive payment from the clients that are being served. This delay issue can create a problem if not managed properly.
Finding the right employees is always challenging. Make sure you ask yourself which kinds of candidates you are looking for precisely before beginning the search. You should be creative and find non-traditional ways of recruitment.
Many business owners wonder what might be the better option: replacing their old and broken equipment, which is very expensive or continuing to operate with the same equipment and losing customers. We know obtaining the right equipment for your business may require additional working capital that is not always readily available. Our equipment financing loans and leases help get you the equipment you need when you need it. With our equipment financing programs, you can obtain the equipment using a loan or a lease.
Suppose you are looking for equipment financing plans for your trucking and transportation business. In that case, you must choose a reliable and experienced lender that knows your industry and is ready to offer the best financing deals. Whether you are looking into starting a trucking business or making plans on growing your existing fleet, 1st Commercial Credit’s trucking and transportation equipment leasing and financing programs are flexible and will meet the needs and goals of your business.