Financing Distribution Centers with A/R lending
Posted on July 25, 2013 in Distribution
Managing Distribution Company Finances with A/R Lending Arrangements Distribution centers are a vital part of the modern supply chain and provide storage and transportation options for retail and manufacturing clients. Warehousing and distribution firms often face significant cash flow challenges due to delays in payment and ongoing fuel and staffing costs. Managing these shortfalls effectively is a key element in the continued success of distribution companies. Accounts receivable (A/R) loans and lines of credit can provide added flexibility for distribution and warehousing enterprises to manage financial emergencies in a proactive way.
How Accounts Receivable Lending Works
Accounts receivable financing uses outstanding invoices from regular clients as the collateral for a business loan. This distinguishes A/R funding from traditional secured and unsecured loans and provides an alternative to these standard credit arrangements. A/R loans are evaluated on the strength of the invoice collateral rather than on the credit rating of the borrower. As a result, companies that have a strong and creditworthy customer base can often qualify for these A/R lending arrangements even if they have little or no credit history or have experienced credit difficulties in the past.
Uses for A/R Lending Arrangements
Companies can put A/R loans and lines of credit to work in a number of ways:
• Implementing advanced security for client shipments, including RFID and tattle-tape systems
• Purchasing added storage space or expanding into new territories
• Managing the gap between major client payments on invoices
• Scheduling necessary vehicle maintenance or facility upkeep
• Managing seasonal demand by hiring temporary staff
• Paying for ongoing expenses, including fuel bills, utilities and staff salaries
The loans on A/R from 1st Commercial Credit come with the most favorable terms and the lowest interest rates possible to help distribution firms manage their expenses in the best and most cost-effective way possible.
The Credit Application
At 1st Commercial Credit, we specialize in streamlining the application process for accounts receivable loans and lines of credit. Our loan application is only two pages long, and we require minimal documentation and financial information to make our decision on your loan. In most cases, we can provide a decision within 24 hours of the receipt of your application. Once your loan has been approved, we disburse funds within three to five days to ensure that you receive the cash you need quickly.
The helpful and courteous lending staff at 1st Commercial Credit can help your distribution firm obtain the loans and lines of credit necessary to manage your business effectively. We offer fast decisions, rapid disbursements and ongoing services to ensure that your company has the tools it needs to succeed in the modern supply chain management industry.