1st Commercial Credit funds Dallas, TX-based businesses by offering accounts receivable factoring services. Additional cash flow solutions including purchase order financing and trade payable finance.
Accounts receivable factoring is also called invoice factoring and is a financial transaction in which a business sells its accounts receivable to a lending company like 1st Commercial Credit, that specializes in buying receivables at a discount.
Companies turning to this type of financing alternative receive immediate cash rather than having to wait for the entire duration of the credit terms offered to their clients. With access to enough money from cash flow lending, businesses in Dallas can build up their cash balance and pay any existing debt and pending obligations. Factoring companies in Dallas will help your business free up working capital tied to unpaid receivables. They will also take responsibility for the risk associated with those receivables and will chase payment directly from your clients if needed.
The Dallas and Fort Worth area has the largest number of corporate headquarters in the country. This city is home to more than 10,000 corporate headquarters and various fortune 500 companies. Additionally, businesses all across the U.S. are moving to the business-friendly state of Texas, into cities like Dallas, Austin, and Houston.
This business influx is because the economic growth in Dallas is ideal for small businesses and startups. Dallas also has a very diverse economy with lots of activity in high-tech areas of software and communications. As industries in Dallas are experiencing unprecedented growth, some businesses are growing faster than their cash flow and need financing. Unfortunately, most small companies don’t have the credit or financial history to qualify for traditional bank lending. In this case, accounts receivable factoring is the ideal solution and an excellent financial tool for small to medium-sized B2B businesses.
Invoice factoring helps your cash flow, and it’s much easier to qualify and obtain because the funding decision will be based on the creditworthiness of your customers. Even if your personal credit is bad, a loan on receivables is still possible because a Dallas factoring company will focus on your receivables for collateral.
Sustaining healthy cash flow is the key to surviving and thriving in a stalled economy. Factoring companies offer invoice factoring services that give businesses of all sizes access to cash without the burden of taking out high-interest loans. Every business operator should understand what a factoring company does and how its services can give your business the boost that it needs to weather a financial storm or seize a great opportunity.
Instead of waiting weeks or months for invoice payments, factoring gives business owners a cash advance on their qualifying invoices that can be used for pressing business needs and expenses. This financial solution is ideal for businesses in Dallas with long net terms and ongoing operational costs. It can also help take care of unexpected expenses that come up. Businesses can factor in their invoices as soon as they provide services or goods to creditworthy customers giving them the freedom and financial flexibility a bank won’t. The process of factoring receivables is offered by specialized factoring companies that will work with you to structure a financing agreement that fits your business goals and needs.
Many companies only need a certain amount of funding to get through temporary cash flow shortfalls. Even if they meet a bank’s stringent qualifications, taking out loans isn’t necessarily the best solution for them. Invoice factoring gives you the flexibility to get the cash you need quickly without having a loan and interest to repay.
Unlike trade credit that limits you to purchases from specific suppliers, invoice factoring gives you cash to use for any business expense. Some reputable suppliers offer discounts to businesses that pay for goods early. You can use cash advances from invoice factoring to avoid trade credit late penalties and even take advantage of early payment discounts from your suppliers.
A factoring company (or accounts receivable factoring) converts invoices sold on credit terms to immediate working capital at a discount. It has become a simple, fast and easy way to access business cash flow. In comparison with a traditional bank loan, a company that factors receivables has a quicker approval process.
1st Commercial Credit is a factoring company that specializes in evaluating accounts receivable and can make a prompt approval decision. The documentation requirements are not as lengthy, and the main requirement is that an applicant has invoices for work or orders that have already been satisfied. It also helps to have creditworthy customers. As long as a business has been in operation, meets revenue requirements, and is free of liens or legal issues, approval is likelier.
Making funds available to businesses when they need them is the driving force behind factoring companies. Many businesses sell products and services to customers and allow them to pay for their purchases 30 or 90 days after the offerings are delivered. Instead of waiting for customers to pay invoices in that period of time, business owners can sell the invoices at a discounted rate to a factoring company and get cash early.
Factoring companies buy discounted invoices at rates that are based mainly on the creditworthiness of their clients’ customers. After establishing their fee rates, factoring companies offer their clients cash advances that are up to 95 percent of the value of the sold invoices. The balances of the invoices are paid to business operators minus all fees when the factoring company receives full payments for the invoices.
Factoring companies also determine fee rates by the volume of invoices that a customer wants to sell. A business that has multiple invoices to factor will be rewarded with lower fee rates than those that only want to factor single invoices per transaction.