The line of credit from factoring services comes with many benefits. In addition, it is much easier to qualify for this alternative form of financing than conventional financing. Most factoring companies in Springfield have few requirements to qualify, and their processes are made to be fast and straightforward. Here are some of the main conditions to be eligible for receivables factoring.
Factoring companies can only provide financing to businesses and not individuals. Most factors prefer that your company is formalized and has a corporate structure recognized either as an LLC or an Inc., allowing factors to differentiate business assets from personal assets.
Factoring programs provide financing by allowing business owners to sell their accounts receivables (unpaid invoices) to a factoring company. Factors can buy your invoices only if they're from commercial companies or government entities.
The best part about factoring is that the funding approval is based on the credit quality of your invoices. Factors will only finance invoices that are likely to be paid on their due date by your customers. Factoring companies will determine the credit quality of your invoices by running a credit check on your customers.
Businesses can only finance invoices that have not been pledged as collateral to other lending institutions. If your accounts receivables are pledged as collateral, the other finance company must agree to subordination before the invoices can be accepted for factoring. Tax liens can also encumber accounts receivable and need to be resolved before we can fund your invoices.
While some factors can offer bankruptcy financing, it's a complex and expensive process. Most factors will prefer to finance companies that don't have open bankruptcies, making the process much simpler.
While your customers' credit is the main factor in determining an approval decision for a factoring company, it is not the only one. Your company must be able to provide some basic information about the business. Some requirements vary by industry, but the most common documents will include a government-issued identification, articles of incorporation, accounts receivable aging report, and payroll tax information.
It is crucial to mention that all factoring companies in Missouri are different and have specific requirements to be fulfilled to qualify for factoring. However, it is good to do some research before so you can have a good idea of what is needed to be eligible for an invoice factoring line. If you are looking for factoring, 1st Commercial Credit can offer the best service. We will evaluate your company's cash flow situation and structure a financing plan that best fits your business needs and goals.
Cash flow is a significant challenge for many businesses. This is especially true when companies deal with customers who pay their invoices on net-30 or even net-90 terms. Unfortunately, that makes it challenging for you to manage and grow your business. If you have big plans for your business, this cash flow situation could get in the way. Cash is needed to pay employees, buy equipment and material, invest in marketing, and much more. This can all be possible with invoice factoring.
Perhaps the best part of factoring is that the service isn't based on your credit. Instead, approval is based on the creditworthiness of your customers. Even if you have a not-so-great credit history, factoring financing may still be a viable option. In addition, the only collateral that factoring companies ask for is your accounts receivable or invoices, so it is very easy to qualify as long as you have those two main requirements.
To summarize again, here's the list of typical factoring requirements:
1st Commercial Credit can help your Springfield business by delivering the funds when you need them the most. Once you set up an invoice factoring services account with us, we can offer additional financial tools, including purchase order financing, supply chain financing, and short-term cash advances against future orders.
These types of services could be good especially for businesses facing seasonal sales or other fluctuating capital demands. Our funding decisions are made within hours when a client requests additional working capital once a factoring line of credit is set up.
Purchase order financing is a financial solution for businesses to help them fulfill their product orders. Clients struggling with cash flow issues can benefit from PO financing, another service that invoice factoring companies offer. We offer this short-term solution for businesses that cannot fulfill some of their financial obligations to deliver the clients' orders. Purchase order finance is beneficial when companies in Springfield decide to extend credit terms to their clients or when they have to wait 30-90 days for their invoices to be paid. This financing option allows businesses to proceed with payments for manufacturing and transportation while waiting for their payments to come in. It is crucial to mention that if your company has not delivered the goods or products to the customers and, most importantly haven't been invoiced yet, then our po financing process is the way to go.
On the contrary, invoice factoring is a better option if your company has delivered goods and invoiced the customer. If you're searching for a financing solution for your business but are unsure which one will be the right one, don't hesitate to contact 1st Commercial Credit. One of our specialists will address all of your questions and concerns and evaluate your specific situation to see how our financing programs can improve your situation.
1st Commercial Credit is a specialized lender that can also provide trade payable financing, which is the process of financing goods or services in a trade or transaction that goes from a supplier to the end buyer. The term "trade finance" refers to various financial tools, including purchase order financing, invoice financing, supply chain finance, and letters of credit. Importers and exporters can particularly benefit from these financial tools offered by international trade finance companies. Trade payable financing is a service that allows a company (buyer) to extend the payment terms of its purchases from crucial suppliers by partnering up with 1st Commercial Credit. We will pay the suppliers on behalf of your company on the due date and collect from the company later. Your suppliers don't have to be legally involved in this arrangement, making it a quick and straightforward process. Trade payable finance works best for those companies sourcing from crucial suppliers and looking to extend the payment terms.
Trade financing is a popular supply chain finance solution for distributors, manufacturers, importers, and exporters. This solution is an essential economic accelerator for development since it keeps maintaining credit flowing throughout supply chains. 1st Commercial Credit is committed to offering the best financial services to businesses in Springfield. This is why we offer various options so business owners can select the one that best fits their needs.
To summarize, here is a shortlist of some of the main benefits of invoice factoring for new business owners:
Springfield, Missouri, is located in Greene County and is the third-largest city in the state. Lying within the Ozarks region of the U.S., Springfield is known for its beautiful landscapes, outdoor recreation, and fantastic weather. Springfield is also famous for its small-town feel and big-city attractions. Also referred to as the “Queen City” of the Ozarks, this city is a central entertainment and shopping hub for the surrounding communities.
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The Springfield region comprises Missouri’s metro area and the third-largest city. The region is highly recognized for its livability factors, tax climate, and growth in jobs and population. Key industries in the Springfield region include advanced manufacturing, distribution & logistics, call centers & back office, technology & innovation, corporate office, and data centers. Springfield is also famous for being the stainless steel capital of the world, where most of the stainless steel tanks used in the processing and food production industry around the globe are manufactured. Some of the major employers in Springfield include: