1st Commercial Credit Featured in Corporate Review
Posted on December 07, 2017 in 1st Commercial Credit
Today on Corporate Review, join us as we explore innovative technologies, cutting edge solutions and timely discussions from leaders across the globe. This is Corporate Review. Welcome to Corporate Review, I am Jackie Bales. Most factoring companies and traditional lending institutions base their receivable financing decisions on a company’s financials, their tax return, credit score, the years in business, minimum monthly sales requirements, or even equity to debt ratios. Which makes it difficult for many companies to qualify. Raul Esqueda president of 1st Commercial Credit is with me now to discuss how they are making receivable financing easy to obtain with minimal paperwork. Welcome Raul, thank you for having me Jackie.
Raul why is it hard for many small to mid-sized companies to obtain receivable financing. Well many businesses do not know factoring companies exist so the first choice they would go to is a traditional bank. Banks do not realize accounts receivables collateral so they usually get declined. So how are you able to extend a factoring line of credit to these companies when a bank would say no?
Well 1st Commercial Credit specializes in funding accounts receivable and what we look at is the quality of the account that our client is selling to. So we base our decision more on the quality of the credit of the accounts. We also don’t look at financial statements or credit scores from the owners.
We are more of a transactional funding company. What exactly does 1st Commercial Credit do? Can you elaborate on that?
1st Commercial Credit is an asset based lending company that specializes in funding accounts receivable, purchase order, and inventory. We are comprised of several companies located in the United States. We have access to Canadian businesses; we are also available through affiliates in the United Kingdom.
What is accounts receivable financing and how does that actually work? It will only apply to businesses that sell on credit terms to credit worthy commercial accounts. Most businesses get into a cash flow shortage because their sales start to grow on credit and there comes a point where they cannot pay their suppliers and make payroll because all their money is tied up on unpaid invoices.
So what kind of business come to 1st Commercial Credit looking for receivable finance?
Any business that sells on credit terms to credit worthy clients can apply for this type of financing. Typically, we finance manufacturers, distributors, exporters, importers, transportation such as trucking, and many service providers. Raul what are the typical funding parameters required by the applicant for receivable financing. Looking at the number of clients they have, sales volume and the location they are at. Typically, we require they do at least $10,000 a month in sales, that they have a good back up on their invoices, and that they are clear and free of any leans.
So Raul my last question is how important is this of lending to a growing economy?
Well a growing economy has many entrepreneurs and as you know, banks are not lending to small businesses that are under two years old. Alternative lending such as accounts receivables financing has become a tool that a lot startup businesses are doing. Well Raul thanks for joining us. It certainly sounds like 1st Commercial Credit really can help small and mid-sized businesses take the needed next steps to grow. Thanks for being here. Well thank you.