Sales Lender Credit Lines

1. Application & Underwriting

• Client submits:
  
  • Current A/R aging report
  • Last 2 years of financial statements
  • Proof of customer credit quality (ratings, payment history, etc.)

• 1st CC evaluates:
  
  • Invoice quality and customer creditworthiness
  • Establishes an initial advance rate (typically 70–90%)
  • Proposes a credit limit ranging from $3 million to $20 million

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2. Credit Line Setup

• Client signs a continuing receivable purchase agreement outlining:
  
  • Advance rate
  • Fee structure (discount + Prime-based interest)
  • Reporting cadence (e.g., weekly/monthly A/R aging updates)

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3. Invoice Submission & Borrowing Base Calculation

• Client provides regular A/R aging reports or borrowing base certificates (BBCs) to detail outstanding, eligible receivables.

• 1st CC calculates the available credit using:
  Borrowing Base = Eligible A/R × Advance Rate
  (e.g., $5M eligible × 90% = $4.5M in available funds)

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4. Drawing Funds

• Client submits draw request with supporting invoices.

• 1st CC advances up to 90% of verified invoice value—typically within 24–48 hours.

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5. Customer Payments & Reconciliation

• Customers remit payments to a lockbox or account managed by 1st CC.

• Client controls collections and maintains customer relationships.

• 1st CC deducts fees and remits the remaining reserve to the client.
  The credit line replenishes with each incoming payment.

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6. Ongoing Management

• Clients submit ongoing A/R updates to reflect current receivables.

• 1st CC offers:

• Credit monitoring

• A/R reporting tools

• Optional collection support

• Periodic audits to confirm invoice legitimacy