As Your Business Grows
We Deliver The FUNDS
We Deliver The FUNDS
Factoring has emerged as an attractive financing option for businesses seeking quick access to funds. Unlike bank loans with stringent borrowing requirements and lengthy approval processes, factoring offers a simpler and lower-risk alternative by providing immediate liquidity from unpaid invoices. Additional interest does not accrue, empowering businesses to manage finances more efficiently without burdening their balance sheets with debt.
Businesses looking for a suitable financing partner often come across a set of questions. Can the provider offer a comprehensive range of factoring solutions? Will it deliver quick and flexible options at competitive rates? Is it possible to get specialized, unconventional solutions?
When partnering with 1st Commercial Credit, the answer to these questions is a resounding "Yes."
Recognized as one of the largest independent providers of asset-based financial services, 1st Commercial Credit is a factoring company that holistically addresses the financial needs of a diverse clientele. Leveraging an innovative system and a team of experts, the company caters to businesses across various industries, including transportation, medical providers, exporters, importers, service providers, distributors and manufacturers.
A privately owned company, it demonstrates significant autonomy and flexibility in offering customized solutions.
Going beyond conventional underwriting norms, flexible funding requirements that most businesses can easily qualify for are offered. A receivable based line of credit is initiated within days. Whether it is a small corporation with $10,000 a month in sales or a company that needs $10 million in working capital, 1st Commercial Credit caters to them all.
"Our factoring solutions are categorized into three divisions, each of which is designed to serve different industries based on the client's needs," says Raul Esqueda, president.
In contrast to the specialization trend, this branched approach sets 1st Commercial apart. The three divisions include accounts receivable financing, purchase order financing, and trade payable financing, each addressing needs within its domain. For example, the accounts receivable financing programs-invoice factoring and asset-based lending-provide different advantages based on industry needs.
With invoice factoring, 1st Commercial provides funding for up to 98 percent of the outstanding invoice value, with variations depending on the industry and the client's profile. Factoring is a straightforward agreement between buyer and seller that converts receivables to a cash on hand asset, distinct from a loan, in which 1st Commercial Credit regularly buys the invoices, functioning similarly to a credit line. Payments from account debtors are made to a specific lockbox, streamlining the process for incorporating account debtors into the payment assignment transition. With "Selective" invoice factoring, clients have the flexibility to choose which invoices to finance, or select specific account debtors whose invoices they wish to use for funding. Additionally, for more established companies with a solid history of collections, profitability, and consistent sales and balances exceeding 3million, 1st Commercial provides asset-based lending. This type of lending is secured by assets such as equipment, inventory and accounts receivable.
An unconventional mix of factoring solutions has helped many businesses, including a client who needed aid in managing in-transit inventory. The overseas supplier, specializing in unique valves for the oil and gas industry as well as for medical and pharmaceutical manufacturing sectors, was already utilizing accounts receivable factoring but needed additional funds to pay for in-transit inventory. The client had established more than 40 U.S.-based accounts operating on net 45 to 60 day payment terms, and products taking 4 to 6 weeks to arrive via ocean freight from China, the client encountered difficulties due to prolonged lead times and fluctuating SKU dynamics This situation highlighted the critical need for a financial strategy capable of accommodating the intricate demands of their supply chain.
In response, 1st Commercial Credit developed a tailored supply chain finance solution to address the unique transaction flow needs based on the in-transit inventory connected to the receivables being financed. This solution gave the client a transparent overview of shipments and sales, bridging the gap between procurement and sales cycles and streamlining its business.
The types of specialized solutions are what 1st Commercial Credit is widely recognized for. It extends this tailored approach to numerous temporary staffing agencies, where employees are typically paid weekly, but the agency's clients often have payment terms of net 30 to 60 days. When working with 1st Commercial, they benefit from a streamlined process, with payroll invoices promptly funded—often the same or next day.
Alternatively, when serving government contractors, who, unlike staffing agencies, generate invoices every month, a distinctive line of credit for payroll funding is implemented based on the completed work. The strategy ensures timely payroll support, and at the end of the month, the generated invoice settles the funding, with the remaining balance returned to the client.
The trucking industry is another beneficiary. Being prepared and anticipating trends is key to staying ahead in this industry. For instance, load boards provided by freight brokers have emerged as crucial tools for trucking companies to bid on. However, new freight brokers without established credit pose a risk.
Acknowledging this, 1st Commercial extends its services beyond invoice factoring to include an immediate credit check feature. Utilizing the MC number of the freight broker, it provides swift responses, indicating the validity for a specific load amount. This proactive approach empowers clients to make informed decisions, ensuring they engage with reputable and creditworthy freight brokers, preventing potential losses.
OUR FACTORING SOLUTIONS ARE CATEGORIZED INTO THREE DIVISIONS, EACH OF WHICH IS DESIGNED TO SERVE DIFFERENT INDUSTRIES BASED O N THE CLIENT'S NEEDS
1st Commercial never hesitates to go the extra mile to support a client's business. When a startup secured a contract to supply food products for government programs during COVID-19, its limited capital and lack of a substantial sales history prevented ti from establishing a line of credit.
1st Commercial Credit devised an innovative solution—a vendor payable letter of credit. The approach assured vendors of confirmed purchase orders upon product release, with 1st Commercial committing to factor the invoice and make direct payments to the vendors. This facilitated sales totaling approximately $30 million in February 2020, with efficient product turnaround every 7to 14 days and payment terms aligned with client preferences.
Client engagements like these showcase 1st Commercial Credit's multifaceted expertise and ability to switch hats to accommodate requirements. An impressive long-term client attrition rate directly results from the company's commitment to making factoring easy, powered by its innovative technology solutions and user-friendly software.
1st Commercial Credit's innovative edge extends to a proprietary invoicing system that streamlines the funding process for clients from different industries. Operating as a distinct software company called MyBizPad®, the cloud-based accounting and invoicing software system is integrated with invoice factoring management tools. The platform reduces the workload associated with traditional funding processes.
A noteworthy feature is the automation of numerous invoicing aspects, like sending an automated notice of assignment to factored accounts required in the trucking industry. This facilitates compliance by merging all necessary documents and emailing them to customers upon invoice finalization.
The seamless integration of technology into the funding workflow transforms the manual and complex process into a user-friendly and efficient one.
MyBizPad® accommodates diverse scenarios. Whether a vendor demands a deposit or has an open credit line, users can generate a purchase order, solidifying a commitment and future liability. The system offers flexibility when handling deposits and records inventory in the received purchase order, simultaneously generating the payable entry. These features ensure a more accurate representation of a company's financial status, aligning the recognition of liabilities with the commencement of sales.
Another notable aspect is its ability to accommodate price fluctuations between the time an order is placed and the time it is received. This empowers the accounts payable clerk to adjust the pricing based on the actual cost, aligning it with the purchase order and reflecting the product cost over time.
Along with its technological edge, 1st Commercial Credit leverages industry expertise to ensure clients are handled by professionals familiar with their sectors. Once the sales team gathers all the necessary documents for client onboarding, the baton is passed to the underwriting department. Athorough examination takes place to check for liens on receivables. Account debtor credit checks are conducted for all accounts, and after verification, the team takes a fine-tuned approach to work through more specific challenges.
For example, the prevalence of "pay when paid" clauses in contracts have increased, which, a decade ago, would have led to automatic declines. The company's underwriting team is flexible in accommodating these clauses. Acknowledging these nuances and adapting to industry-specific challenges showcases the flexibility and adaptability of 1st Commercial Credit in navigating the complexities of receivables financing.
Once a client completes the underwriting phase and undergoes the initial funding process, the operations team takes charge. The client is introduced to a dedicated crew that serves as the main point of contact for ongoing interactions. This team-oriented approach is essential to prevent potential communication bottlenecks.
The team effectively communicates the factoring arrangement to clients' customers during onboarding. They skillfully explain the financing relationship, ensuring a smooth transition for buyers. Their proficiency in managing this aspect of the operational process minimizes potential disruptions to the client's business and highlights the company's expertise in client relationships.
1st Commercial Credit's strategy for the future focuses on identifying and engaging with growing industries, with an emphasis on clients experiencing organic expansion. By harnessing financial expertise and innovative technology, the company will continue to cement its position as a pioneering force in the factoring business.
Stop waiting 30-90 days for your customers to pay their invoices. Factor with 1st Commercial Credit and receive the working capital your business needs to grow.
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