Unlike a traditional bank line of credit, factoring offers a line of credit secured by accounts receivable facilitated by a factoring company. It is based on outstanding invoices that can increase and decrease with your unpaid accounts receivable. If your Nevada business qualifies and an arrangement is established with a factoring company, they will advance up to 97% (depending on the industry) on outstanding accounts receivable. There are many benefits this line of credit or factoring line provides to companies in Nevada. When a company requests to factor invoices that are outstanding, the factoring company can advance the amount of funds needed in a matter of hours.
Every business finds itself faced with cash flow problems at one point or another. This can happen when a company is spending more money than is being brought in at that time. With a recently established business, you can expect cash flow issues because the reserves needed to cover the receivables owed to your business haven't been built up yet. Without a solution and a plan in place when cash flow becomes a problem, your business will struggle to afford the costs involved when running a business effectively. Poor cash flow management can even end up putting you out of business. Factoring companies for small businesses can provide a financial solution and help you resolve any business issues caused by a shortage in cash flow. In many cases, companies wait until their cash flow becomes an out of hand problem that they are forced to turn to bank loans with higher interest rates and cost much more than any other cash flow solution.
On the other hand, even if you don't have frequent cash flow problems or are currently experiencing difficulties, most businesses in Nevada will eventually experience circumstances that will put pressure on their cash flow. Some of the situations that can put a strain on your business include a downturn in the economy, a quickly growing payroll, a slowdown in your industry sector, a seasonal sales issue, or even an unexpected tax liability. The majority of these situations are beyond your control, and you need to be prepared for unexpected and sudden changes in your cash flow.
Regardless of your situation, when your business is in a similar financial struggle, a bank loan or an alternative like the services offered by a company that factors receivables are the options available to you. With this being said, there are many significant differences between a bank line of credit and a factoring line of credit and understanding which one is a better option for you and your business. On the positive side, qualifying for a factoring line of credit is a much simpler process for many small, medium-sized, or new companies than qualifying for a line of credit with a bank. Factoring companies look at the following factors when considering an application:
An invoice factoring company in Nevada does not focus on how many years a company has been in business or on the business owner's credit score. The main concern is that the invoice factoring company is buying invoices that will eventually get paid. For this reason, factoring is a proven and effective financial solution and an extremely valuable tool for a growing business in need of a finance partner to improve cash flow.
Invoice factoring is the sale of a company's receivable assets and a financial solution in which a Nevada business sells its pending invoices to a factoring company at a discount. Businesses in need of a healthy cash flow use this form of financing to gain access to immediate cash flow. The basic invoice factoring requirements for 1st Commercial Credit include that your business is selling products or services to other companies or the government, having clients who are creditworthy, and have payment terms of 30 to 90 days. Many businesses in Nevada have to sell to their clients on credit terms.
These businesses deliver the goods and services immediately, then send an invoice, and finally get paid a few weeks or even months later. Having many customers is great for business, but problems arise when some customers are paying late, not paying, or having extended payment terms. All of these situations can hurt your business. 1st Commercial Credit can offer the ideal financial solution to solve your business's cash flow issues and provides purchase order financing for small businesses in Nevada.
The factoring process with 1st Commercial Credit involves these 4 steps:
Step 1: Your business sells to another and has invoices for extended payment terms (30 to 90 days).
Step 2: Setting up an account with 1stCC so you can submit your outstanding invoices to the factor.
Step 3: 1stCC provides a cash advance equal to the agreed percentage right away.
Step 4: The account debtor pays the invoice owed to 1stCC, and you receive the remaining balance for the invoice, minus any applicable fees.
Factoring is an effective working capital solution for growing small businesses, startups, and established organizations that sell to creditworthy customers on credit. 1st Commercial Credit funds large and small businesses in Nevada that want to use factoring as a source of capital. We finance the following sectors: staffing agencies, trucking and freight, manufacturing, construction, distribution and wholesalers, security guards, oil and gas, medical providers, and many others and our accounts receivable financing rates are highly competitive, between 0.69% and 1.59%.
Some of the reasons why businesses in Nevada turn to us for invoice factoring financing are:
A factoring company (or accounts receivable factoring) converts invoices sold on credit terms for 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.
Suppose you own a manufacturing company and are tired of wasting time with banks and their extensive requirements and paperwork. In that case, 1st Commercial Credit has several options for manufacturing equipment leasing and financing for your business needs. We provide new and used equipment financing for various items, including:
We are dedicated to providing flexible leasing plans for new and used equipment starting at $35,000 to $15,000,000 and with 12 to 60-month terms. We have more than 20 years of experience in the industry, and we’re ready to help you make your manufacturing company succeed. Our equipment leasing options serve a variety of industries across the country, and here is why so many business owners are coming to us:
Want to start your leasing experience with us and enjoy all the benefits? Please feel free to contact our team of specialists for more information and get started with our equipment leasing company today! Here are the requirements for equipment financing and leasing with 1stCC:
Invoice factoring is a simple and accessible alternative to traditional bank loans and other forms of lending. Still, business owners need to fully understand the factoring process and the cost associated with it, and the benefits involved. Like any other lending service, factoring has fees for each transaction. The factoring rates depend highly on the type of industry, the factor, receivable volume, the creditworthiness of your customers, and the length of time it takes for invoices to be paid, among others.
Typically, factoring costs can be less than 1% and go up to 4%, depending on where your business stands when looking at the above factors. As a business owner, when thinking about establishing a factoring line of credit and beginning a financing relationship with a factoring company, it is crucial to read the contract thoroughly and familiarize yourself with the fees, rates, and percentages involved.
With invoice factoring, your business can access fast cash without having to go through the burden of an approval process that can take weeks or months, like with bank financing. Factoring companies have also made the application process straightforward and non-time consuming.