Invoice Lending for the Manufacturing Industry
Posted on December 06, 2013 in Manufacturing
In the manufacturing industry, obtaining new clients and new contracts can help provide the resources necessary to expand business operations and introduce new product lines for added profitability. These opportunities may require additional financial resources to ensure that manufacturers can meet their contractual obligations and that workflows and supply chain relationships are maintained at optimal levels. Finding the right financial solutions to manage short-term cash flow shortfalls or to fund expansions of the manufacturing business can secure a positive market position for these firms and can offer a valuable competitive edge in dealings with vendors, retail outlets and clients in the commercial marketplace. For companies that lack traditional collateral or that have had credit difficulties in the past, invoice lending arrangements can provide an alternative to bank loans and lines of credit and can help manufacturers acquire the necessary capital to finance expansion and growth.
An Alternative Form of Financing
Invoice loans and lines of credit are designed for companies that may not qualify for traditional lending arrangements for a variety of reasons:
- Lack of traditional collateral sources
- Too many outstanding bank loans or lines of credit
- Little or no credit history
- Past credit difficulties
Asset-based invoice lenders can use the value of outstanding accounts receivable to collateralize lending arrangements and provide necessary funding for manufacturers. Because these loans are based primarily on the creditworthiness and reliability of the companies that owe money to the borrower rather than on the borrower's own credit history, manufacturing firms can often be approved for these loans and lines of credit much more easily.
Faster Response Times and Faster Funding
Invoice lending companies specialize in alternative funding for business customers. As a result, they can provide much faster response times than banking institutions that may take weeks or months to come to a final decision regarding a loan or line of credit. Invoice loans require minimal paperwork and can often be approved within one or two business days. By taking advantage of these alternative lending arrangements, companies can acquire the raw materials needed to manufacture their products and to make delivery on time and in full. This can ensure a positive beginning for new client relationships in this competitive field of industry.
The lending professionals at 1st Commercial Credit offer a wide range of invoice loans, purchase order financing arrangements and other asset-based funding options to suit almost any business need. For manufacturers making the move to new markets and new clients, these loans can establish a solid financial foundation for future growth.