![]() Selling equity during a cash crisis can be a detrimental choice for a business on a long-term basis.ġst Commercial Credit is a factoring company that helps out small business with minimal sales volume. By using receivables factoring instead, business owners can protect their equity and get through temporary cash shortages. While some business loans provide cash based on equity, using them is like starting over and losing part of an investment. Using a factoring company to finance invoices only encumbers accounts receivable as collateral and minimizes the risks of losing equipment, or inventory not related to the invoice or real estate assets.Īlso, there is no need to give up equity. With conventional business loans, all business assets are used as collateral. Although it is not necessary to report, it is prudent to add information about the factoring arrangement in the balance sheet footnotes to provide full disclosure if your company is public. Since factored receivables are considered contingent assets with financing that is secured from non-lender and non-investor sources, factoring is an off-balance-sheet form of financing. Many business owners are hesitant to add more debt that must be reported on the balance sheet. Our average client pays an average discount fee of 2.25% depending on the days outstanding the invoices pay. 1st Commercial Credit offers very low rates between 0.69% to 4%. The rate is usually reasonable for the structure of the arrangement. As long as a business has been in operation, meets revenue requirements and is free of liens or legal issues, approval is likelier. It also helps to have creditworthy customers. 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. In comparison with a traditional bank loan, companies that factor receivables have quicker approval process. 1st Commercial Credit is a factoring company that specializes in evaluating accounts receivable and can make a prompt approval decision. It has become a simple, fast and easy way to access business cash flow. We leverage your credit eligibility based on your buyer's credit quality, not your company.Īn accounts receivable factoring service converts invoices sold on credit terms for immediate working capital. Factoring is not the same as a bank loan. Having a simplified option for getting cash is the biggest benefit. Benefits of Using Invoice Factoring Companies We provide fast funding, flexible approvals even if the owner has bad credit, affordable rates and other financial solutions that help grow companies. Our receivable factoring services allow our customers to offer credit terms to customers without running into cash flow shortages.
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