Financing & Factoring Produce
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We attract clients that:
Invoice Factoring with PACA Related Receivables for Produce and Agriculture Distributors
Our agriculture receivable factoring program is a unique financial tool and requires account representatives that specialize in meeting PACA’s strict requirements.
At 1st Commercial Credit, setting up an accounts receivable credit line in the produce industry is an easy process. Unlike most banks and financial lenders, we know the special characteristics of the agricultural industry inside and out. 1st Commercial Credit is staffed with people that know the process, challenges and the opportunities that await your business.
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Factoring for growers made simpler than ever:
Fast Approval Process
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3 to 5 Day Initial Setup
Free Invoicing Software
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Factoring for growers made simpler than ever:
Fast Approval Process
3 to 5 Day Initial Setup
Free Invoicing Software
Would Your Business Benefit By Converting Accounts Receivable To Working Capital?
Keeping up with your payables to growers is a challenge when you sell your produce on credit terms.
Yes, produce businesses benefit from converting their AR to working capital and many of our clients that come to us usually have the same cash flow issues. Growers usually want cash upon delivery or pickup, while customers expect credit terms of 14 to 21 days. This mismatch can create a substantial cash flow gap, especially when you're trying to expand your distribution company.
The agriculture and produce industry is undoubtedly one of the most fundamental sectors for the country and American families. Running an agriculture business involves a complex process with hard work and financial struggles from time to time. The process behind today’s farming involves numerous entities seemingly working together to bring food to our tables.
To make everything work smoothly, farms require consistent and reliable financing. Yet farming often involves a slim margin and seasonal sales that traditional banks generally do not want to touch.
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Agriculture financing through receivables factoring offers a solution for accessing the funds needed to harvest and ship crops, all while complying with the Perishable Agricultural Commodities Act (PACA). Timely delivery of perishable produce is essential to avoid business losses, and factoring can help bridge the gap. Failing to do so can result in considerable business losses.
Fortunately, 1st Commercial Credit can offer agriculture finance solutions such as account receivable factoring. The setup process for agriculture factoring involves filling out our quick and simple online application. In most cases, you can have the money you need in a matter of days rather than weeks or months.
Factoring produce receivables is an alternative financial solution to conventional loans and lines of credit. Unlike bank factoring and other financial lenders, which require almost perfect credit history and often substantial collateral to secure funding, factoring for agriculture businesses puts money in your bank account without making you go through an expensive, time-consuming, and painful process.
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Why Choose Produce And Agriculture Factoring?
Produce and agriculture factoring have been used by many companies over the past years and have become a long and reliable financing method for agriculturists.
Today, many companies benefit from agriculture funding. Among them are, farmers, retail food processors, food manufacturing companies, food packaging companies, food distributors, shippers, and suppliers.
Factoring companies provide immediate cash to cover essential expenses such as payroll, delivery, and pickup costs, ensuring smooth operations even during tight financial periods. This allows distributors to maintain their commitments and keep their supply chains moving efficiently.
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Any Produce Company Can Qualify For This Program As Long As They:
Unlike other accounts receivable financing companies, 1st Commercial Credit simplifies the process for the produce and agriculture industry. We offer easy-to-obtain receivable financing with minimal paperwork, focusing on the strength of your invoicing process and the creditworthiness of your buyers, rather than complex financial metrics.
1st Commercial Credit factoring program will provide capital for your business within just a few days. Once your account is approved, we can finance the invoices and advance you the funds within only 24 hours. Doing so will allow you to receive quick cash and avoid your business to wait weeks or months to receive payment from your customers.
Agriculture Receivable Factoring Offers Many Significant Benefits:
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Unlike other accounts receivable financing companies that finance the produce and agriculture industry, 1st Commercial Credit makes receivable financing easy to obtain with minimal paperwork. Our decisions are not based on financials, tax returns or even equity to debt ratios. We make decisions primarily on the invoicing process and the credit strength of the account debtor (buyer).
factoring vs Traditional Bank
When it comes to financing options for growers, factoring and traditional bank loans each offer different advantages. However, factoring often proves to be a more suitable option for growers due to the unique challenges of the agriculture industry.
Business loans from a bank have strict requirements to apply. They are usually paired with a complicated and time-consuming process. Banks demand an almost perfect personal credit and also ask for business collateral. Even if a company manages to qualify for all these requirements, the final approval and access to cash can still take several weeks or even months.
In summary, here are the main 5 difference when comparing a bank loan to factoring invoices:
- No collateral is needed
- Fast application and approval process
- High probability of approval
- Low credit score admitted
- Quick cash - enhanced cash flow
Produce Distributors Factoring Cost (Rates and Fees)
When considering factoring services for your agriculture business, understanding the costs of factoring involved is essential. At 1st Commercial Credit, we offer competitive and transparent rates, ranging from 2% to 3%. These fees reflect the flexibility and speed of our cash flow solutions, ensuring you can access the funds you need quickly and without hidden costs. Whether you require immediate capital to cover payroll, manage harvesting and shipping expenses, or invest in expanding your operations, our factoring rates provide a cost-effective way to enhance your farm's financial stability.
FAQ About Agriculture and Factoring
Yes, small farms and agricultural businesses can qualify for factoring. Unlike traditional lenders, factoring companies focus on the credit strength of your customers (the buyers of your products) rather than your financial history. This makes it easier for small and seasonal businesses to access financing.
Receivables from various types of agricultural activities can be factored, including those from the sale of crops, livestock, and related products. Any business that sells goods or services on credit terms can potentially benefit from factoring.
Yes, factoring can be structured to comply with PACA regulations. Factoring companies like 1st Commercial Credit are familiar with the specific requirements of the agriculture industry and ensure that all transactions meet legal standards.
No, factoring can actually strengthen your relationship with customers by allowing you to offer them longer payment terms without compromising your cash flow. Factoring companies handle collections professionally, ensuring a smooth process for both you and your customers.
