Accounts receivable financing is used by businesses to convert sales on credit terms for immediate cash flow. 1st Commercial Credit adopts a quick and simple approval process and expedites initial funding in 3 to 5 working days.
1st Commercial Credit provides a variety of purchase order financing solutions to meet your trade financing needs. P.O. financing is suitable for any wholesaler, reseller, importer or any company that purchases and resells goods.
If your Portland business needs working capital, you will likely come across invoice factoring and bank loans as possible funding options. The better choice for your business will vary and largely depends on a business's unique scenario. There will be many different factors impacting your decision, but there are two main ones to consider: the cost and how long it takes to get the funds. These two financing solutions have little in common other than providing cash to businesses. 1st Commercial Credit is an experienced lender specializing in factoring services for Maine (ME) Businesses and can evaluate your situation to provide you with the best financial alternative.
Invoice factoring is a funding alternative that allows businesses to access immediate cash by selling your invoices to a factor at a slight discount. Imagine you're expecting a customer to pay a $15,000 invoice in 30 days. Suppose you need that money today to cover operational expenses and payroll. In that case, you can sell that invoice to a factoring company and receive a considerable percentage of that invoice value immediately. So factoring isn't the same as borrowing money with a bank loan. Instead, you're selling an asset which means you don't owe the lender any money, and there's no debt added to your business.
When a business owner in Portland borrows money from a bank, it's typically in the form of a line of credit or a traditional loan. You pay the loan amount plus interest with this type of financing until the loan is repaid in full. While these conventional loans might seem like the only option that comes to mind for many businesses, they are pretty challenging to qualify for as they require lots of collateral and an outstanding credit score, among other strict requirements. In addition, they also add more debt to your business. Because of this, bank loans can end up costing more in the long run, and you may not be able to close the cash flow gap when needed. Approval may also take a long time, and you'll also be adding another liability to your business.
Here’s a quick comparison between accounts receivables loans and bank loans:
When comparing invoice factoring services and traditional financing, you may realize that bank loans are sometimes less advantageous in the long term. You might end up paying more for the access to that capital than you would with factoring and adding on liability on your company's balance sheet.
If you think about purchase order financing as a possible financial solution to get additional funds for your business, 1st Commercial Credit can help. When a customer agrees to buy something from a supplier, they usually send over what's called a purchase order. When you receive a purchase order and agree to the terms, you enter a legally binding contract between you and the buyer.
While it's a good thing to get a large purchase order, not every company has the available cash needed to fill every order, especially if there are multiple orders. As every small business owner knows, cash issues are part of running operations in many industries. No business wants to be forced to turn away a large purchase order because their company's cash is tight, and they can't afford to fulfill and deliver the order. Instead of missing out on potential revenue or worrying about being unable to fulfill a purchase order that could damage the business's reputation, many suppliers that lack the cash needed to ship goods are turning to purchase order finance solutions.
A purchase order, also known as PO financing, is an arrangement where a third party gives a supplier the funds to fulfill a customer's purchase order. In some cases, purchase order loans can be used to finance an entire order, while they may only finance a portion of it in other cases. The good news about the purchase order financing process is that it is a fast and straightforward alternative to fund purchase orders, meaning suppliers can fulfill their customers' needs while growing their operations.
While small business owners used to only see traditional banking as an option to obtain the funds to meet their financing needs, bank lending has become more challenging to qualify for in recent years. Bank institutions tend to be picky, preferring to lend to well-established companies with outstanding credit scores. On the other hand, a purchase order financing company like 1st Commercial Credit is willing to fund suppliers even if they don't have perfect credit scores. These PO lenders are more interested in the creditworthiness of the customers that send in purchase orders. In addition, PO loans are much easier and faster to obtain. This is particularly beneficial to newer companies getting large purchase orders when they're not yet ready for it.
Suppose you're a small business struggling to get the cash it needs to fulfill the next large purchase order, or you find that you need to purchase items from suppliers before fulfilling a customer order. In that case, PO financing might be an excellent option for you. Typically, the types of businesses using PO financing include:
The healthcare sector has experienced a period of unprecedented growth in Portland, Maine. Companies providing medical services, such as diagnostic centers and doctor’s offices, serve many patients and can significantly benefit from receivable financing. Unfortunately, the amount of money private and government insurers pay for insurance claims has decreased and can also take a long time. Having more patients and longer payment times can often result in cash flow problems. Even though most healthcare businesses will inevitably encounter this problem, few business owners will know how to handle it. One popular solution to solve cash flow issues is working with lenders that offer financing medical receivables. Our factoring services provide:
Hospitals and healthcare businesses have constant pressure to meet their daily obligations. They have numerous expenses, including payroll, leases, and equipment, which must be paid on time. 1st Commercial Credit offers efficient and straightforward solutions to improve your cash flow. Some of these solutions include asset-based lending, medical factoring, and purchase order financing. The healthcare company gets the funds it needs to pay business expenses and grow, and patients get the treatment and care they deserve.
Medical factoring allows companies to finance their medical claims with the help of a factoring company. The factor gives you an advance on your claims, giving you immediate access to working capital. Transactions are ongoing and settle as insurance companies pay claims on their established payment schedules. In addition, medical factoring is considerably easier to obtain than traditional financing. The lines of credit are more flexible and don’t have strict requirements. 1st Commercial Credit also offers accessible and reliable medical staffing factoring services.
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