Factoring is the process by which business owners sell their accounts receivables to obtain financing. This means that your company receivables can be made available to you much faster than usual. 1st Commercial Credit is an experienced lender that works closely with business owners and explains all of the benefits that cash on hand can mean, considerations to keep in mind when seeking a factoring company, the financing process behind factoring, and answers all questions and concerns about the topic.
Factoring is a cash management technique that has been used for many years by many different businesses. Factoring is now available to most industries in the country, and if you fulfill the few requirements needed, you could also begin taking advantage of this financial solution. Factoring allows a business in Shreveport to receive immediate cash for goods or services sold instead of waiting 30-90 or more days for payment. In addition to having working capital immediately available to meet payroll and other obligations, business owners will also have the ability to buy more materials and take advantage of volume discounts while removing debt from the balance sheet.
Business factoring is nothing like a traditional business loan. Instead, it's the sale of an asset (unpaid invoice). Essentially, the factor purchases the right to collect on an invoice when it's due, minus a discount of 2 to 6%, depending on the factor. The factor will pay around 75-97% of the invoice upfront, followed by the remainder once they've collected the invoice directly from your customer.
Because factors collect payment from your customers directly, they are more concerned with your customers' financial status. Factoring companies may require you to validate your customers' payment and credit history. If your business is working with creditworthy customers, factoring could help you get the cash you need upfront.
The key benefit of factoring is receiving immediate working capital, as many factors in Shreveport will pay for your invoices within 24 hours or less. Since factoring is not a loan, you do not assume debt for the money you receive, and there is nothing to pay back. The cost of factoring receivables will vary depending on various factors, including the type of industry, the factoring company, and the quality of your invoices. Commercial Credit is a factoring company in Louisiana with different supply chain solutions offering financing rates between 0.69% and 1.59%.
Smaller manufacturing firms with qualifying invoices sold to creditworthy customers can apply for loans using these financial documents as collateral. Specialized lenders like 1st Commercial Credit will evaluate these accounts receivable to determine their market value. If the line of credit is approved, we will offer a high percentage of the total value of these unpaid invoices immediately. When the invoices are paid, factoring companies will collect the fees and return any remaining funds to you, the borrower.
1st Commercial Credit specializes in receivable finance for manufacturing companies in Shreveport. Receivable loans and purchase order funding are ideal solutions for many small manufacturers in Shreveport who can't qualify for bank financing, making it tough to obtain the working capital needed. By taking advantage of these alternative lending services, manufacturers in Shreveport can begin planning for future growth and not stress about cash flow problems that could potentially hurt the business.
The factoring process with 1st Commercial Credit involves the following steps:
Manufacturing financing with 1st Commercial Credit can help your business:
Manufacturing factoring is a better financial solution when compared to traditional banks. Business loans from a bank have a long and strict list of requirements to apply. They are usually paired with a complicated and time-consuming process. In addition, banks demand perfect personal credit and ask for business collateral. Even if a business manages to qualify, the final approval and access to cash can still take several weeks or even months.
In summary, here are the main six reasons why invoice factoring is a better option than a bank loan:
The healthcare sector has an old-fashioned billing and payment system and many additional insurance complications and layers of bureaucracies. This situation causes medical bills to take weeks or even months before they are paid. Even though it is common for medical companies to deal with slow-paying customers, too many outstanding invoices can negatively affect businesses and restrict cash flow and growth. For that reason, healthcare invoice factoring is an effective financial solution for medical companies in Shreveport.
Healthcare factoring is a financing service dedicated for companies in the healthcare sector that are currently struggling with cash flow issues due to invoices with net terms between 30 to 120 days or more. With factoring, medical businesses can continue to care for their patients without stressing about insufficient cash flow.
If you own a company that offers information technology services, you know that the service industry faces unique cash flow management challenges. As a small business, you may invest a lot of effort to land a large client, only to lack the business financing needed to meet the client's needs. Additionally, fluctuating overhead, payroll responsibilities, and late customer payments can all threaten your business's cash flow and future. For companies offering IT services, financing through Invoice factoring for technology companies is the best way to go. Our A/R funding solutions offer accounts receivable financing. IT companies in Shreveport sell us their invoices, and we provide funding in as little as 28 hours!
The process is fast and straightforward:
Factoring is a better option over traditional business loans for businesses offering information technology services. Conventional banks will put your company in debt, will only accept outstanding personal credit, and your operations will have to be paused for weeks or months while awaiting approval. Through invoice factoring, IT services companies can have immediate access to the funding they need. Another advantage this alternative form of financing offers is that approval is based on your customer's creditworthiness and the quality of your invoices, not your credit.
For companies in the information technology sector in Shreveport, factoring makes more sense for many reasons. 1st Commercial Credit is an industry leader in accounts receivable funding services. Contact us today to start taking advantage of our expert management, industry-leading technology, and highly trained customer support.
The identity of Shreveport, Louisiana, is portrayed by a blended Southern culture. Shreveport is Ark-La-Tex's economic and cultural hub and the point where northeastern Texas, southern Arkansas, and northwestern Louisiana meet. When living in Shreveport, people need to accept that even though they are technically in Louisiana, the city's identity is rooted in three different states. This explains why a never ending debate arises each fall over which NFL team northwest Louisiana supports the most: the New Orleans Saints or the Dallas Cowboys. Like many other mid-sized metro areas in the country, Shreveport deals with infrastructure issues, income disparity, and crime. However, some negatives are often overshadowed by the many positives, including friendly people, beautiful green spaces, and a business-friendly economic environment.
The Shreveport area offers a mix of some of Louisiana's best southern casinos, food, music, and culture. The residents of Shreveport represent a cross-section of identities and cultures, and families make up a majority of Shreveport households. Shreveport is famous for its flashy riverboat casinos, but it also has many other activities and adventures.
The annual Louisiana Film Prize for short films and the Louisiana Music Prize are festivals attracting thousands of visitors to the city. Other famous festivals include the Red River Revel and the Mudbug Madness Festival. Wine enthusiasts can enjoy the yearly Cork Wine Festival, and Shreveport also hosts the State Fair of Louisiana, attracting thousands of visitors and participants each year.
Some other famous attractions to visit are:
A variety of diverse industries in Shreveport contribute to the city's thriving economy. From rapid-growth sectors such as film and digital media to traditional, powerhouse sectors, including advanced manufacturing continue to be crucial to the region's success, there are many reasons why this Louisiana region is experiencing so much growth. In 2012, Shreveport was ranked the No. 1 in the nation with the lowest costs for new business investments across many key industries. Here are a few of the top Shreveport industries that play a crucial role in powering the economy of Northwest Louisiana: