1st Commercial Credit

We Offer Supply Chain Finance Solutions

Over 18 Years in Business

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Why Bank Lending Is A Bad Payroll Funding Option

Why Bank Lending Is A Bad Payroll Funding Option

When it comes time to meet payroll, you may think that a bank loan or a bank line of credit is the best answer. But the truth is that bank lending is probably the worst way to meet the ongoing payroll obligations that your company has.

Short-Term Need

Bank lines of credit are capped, and they don't move in proportion with your sales or expenses. Despite its significant financial burden and long-term implications, payroll remains a short-term funding need. When you meet payroll, you have employees to show for it, but they are a fleeting asset. An employee could decide to leave your company tomorrow and that would cost your company thousands of dollars.

A long-term need is something like a significant piece of equipment or real estate. Bank lending for a long-term need makes sense because the item being paid for by the funding should be around after the funding has been paid off. But payroll is fleeting and it is definitely not worth utilizing a long-term commitment like a bank loan to fund this short-term need.

Time Is Of The Essence

By the time that you realize that you need assistance making payroll, bank funding may not be an option because of the time table required to get approved. Even if you "know a guy," you are still in for a week or two of waiting after you have submitted the paperwork. By the time you get word of the approval, you would have already missed your payroll obligations.

There is also no guarantee that the bank will approve the entire amount that you are looking for. You may need $10,000, but the bank may feel that your current credit situation only allows a loan of $8,000. Now you have taken on extra debt against your bottom line, and you are still left trying to cover the balance of your payroll obligation.

Your Invoiced Sales Are A Better Option

The key to consistently making your payroll payments each month is your receivables aging report. Those outstanding invoices represent the cash that you need to meet your payroll obligations and prevent your company from having to tolerate the pitfalls of bank lending.

Even though your invoiced sales represent the cash you need to meet your obligations, the rash of past due invoices is choking your cash flow to the point where you are unable to rely on it. You need a way to improve your cash flow by getting the revenue from your invoiced sales on or before the invoice due dates.

You Need Invoice Factoring Services

A payroll funding company is an organization that uses invoice factoring to improve your cash flow and help you to meet your ongoing payroll obligations.

1st Commercial Credit is a factoring company that finances outstanding invoices. Factoring it is the process of using your verifiable invoices as collateral for cash advances that we send directly to your company bank accounts. As long as your clients are creditworthy, then we will advance you the full face value of your invoices, minus our fee. We will improve your cash flow and allow you to make payroll without the financial burden of bank lending.

1st Commercial Credit Is A Friend In The Financial Industry

We are not a bank and invoice funding is not a loan program. We do not charge set-up or facility fees, and we have no per invoice or per month minimums.

1st Commercial Credit has a two-page application on our website that you can use to get the process started. We will have an answer back to you the same day and your account set up in less than five business days. Once we have your account up and going, we can transfer funds to your company bank account within 24 hours of receiving your approved invoices.

Avoid Recurring Debt By Using Your Invoiced Sales

1st Commercial Credit will set up a flexible business line of credit using your outstanding invoices as collateral. As your invoiced sales increase, we will be able to make more cash available to you and help you to pay all of your ongoing obligations.

We have years of experience in helping clients in a variety of industries all over the world. Whether you have good credit, bad credit, or no credit at all; we have the custom lending programs you need to meet your ongoing bills and make sure that you make payroll on time.

Receivable Financing Rates at 0.69% to 1.59%

18 Years In business & Over 3,200 Clients Funded

  • Fast Approval Process
  • No Up Front Fees to Set up
  • No Financials Required
  • Low Credit Score Accepted
  • 3 to 5 Day Initial Setup
  • Free Invoicing Software