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Accounts Receivable Financing is used by businesses to convert sales on credit terms for immediate cash flow. 1st Commercial Credit adopts a quick and simple approval process and expedites initial funding in 3-5 days.
Learn more1st Commercial Credit helps San Antonio-based businesses by offering invoice factoring services, short term transactional funding, purchase order finance, and many other forms of cash flow and supply chain finance solutions.
Cash flow can be a major challenge for small and mid-sized San Antonio-based businesses, especially when the company doesn't get paid immediately after delivering their product or service. Accounts receivable factoring is a common type of commercial financing that helps your business access capital right away. If you're looking into loan options, you should understand what accounts receivable financing is, how it works, and what the advantages are.
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Accounts receivable is the amount owed to a business by customers who have not yet paid. Many businesses bill customers by invoice, and there can be a gap of weeks or months between the time the product or service is provided and when the customer pays. Accounts receivable is listed on a company's balance sheet as an asset.
Accounts receivable financing provides capital to a company based on its accounts receivable. This allows companies to get immediate access to the cash they were due to receive from customers in the future. Companies will often struggle while waiting for customer payments while still having to fulfill ongoing costs and taking care of unexpected business expenses.
Companies in San Antonio won’t have to be forced to be in this situation because we can provide financing and the funds today. 1st Commercial Credit has financial resources to help San Antonio-based businesses We help nationwide and foreign businesses finance their transactions with San Antonio buyers and sellers. We offer unique financial solutions to finance the supply chain, including invoice factoring, purchase order financing and accounts payable financing programs.
Some of the reasons businesses choose factoring financing and other alternative forms of funding include needing temporary cash flow for ongoing expenses, the inability to qualify for bank loans, or avoiding debt. 1st Commercial Credit is an experienced accounts receivable financing company in San Antonio, offering the best financial solutions and competitive financing rates ranging from 0.69% to 1.59%.
In summary, invoice factoring makes it easy for the clients in the following situations to qualify:
We are a flexible Texas factoring company when it comes to financing your accounts receivable. Small to large companies can pledge their receivables and obtain a line of credit using their unpaid invoices as collateral in only 3 to 5 working days.
A factoring company (or accounts receivable factoring) converts invoices sold on credit terms to 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.
Accounts receivable financing can be structured in a few different ways. The two main types of accounts receivable financing are asset sales and loan agreements.
Asset Sales
The asset sale process is sometimes called factoring, and financing companies that use this system are called factoring companies. During an asset sale, a business sells its accounts receivable to the financier. The financier provides the business with capital to replace the value of the accounts receivable. Then, the financier takes over the invoices and becomes responsible for collecting the amounts owed. Most factoring companies will only buy short-term receivables, and they usually steer clear of defaulted receivables. They want to minimize the risk of losing out on payments, so they may only be interested in companies with recent invoices.
The terms of the agreement can vary depending on the size of the sale and the risk involved. The financier can pay up to 100 percent of the accounts receivable balance up-front, but most companies will pay around 80 percent. The financier may ask for the company's financial records or credit history as well as details about the invoices they're buying. Once the financier verifies the invoices, they will send the funds to the seller through a wire transfer or direct deposit. This process usually happens very quickly, and businesses can expect to receive their funds within one business day of verification.
The financier will pay the remainder of the balance when they receive the payments from the customers. However, they will subtract financing fees from this amount. Most factoring companies charge 3 to 5 percent of the total invoice value.
Loan Agreement
Another way to structure accounts receivable financing is with a loan. In this situation, the financier provides an advance on the accounts receivable balance, but the business does not sell the invoices to the lender. Instead, the business repays the amount as they receive payments from their customers.
Accounts receivable loans can be secured with the invoices used as collateral, or they can be unsecured. Like asset sales, the terms vary depending on the circumstances. Lenders rarely offer a 100 percent advance on the accounts receivable balance.
Most loans will amount to 70 to 90 percent of the total value of the invoices. Lenders usually charge 2 to 4 percent of the loan's value in fees each month. The APR for accounts receivable loans can be significantly higher than bank loans, but many small businesses prefer them because they provide such fast access to cash flow.
Selective Receivables Factoring
Selective factoring can be a good option for businesses that need smaller amounts of capital. They can receive the cash flow they need without having to submit all their accounts. It also isn't included on the balance sheet, so it doesn't affect the debt ratio.
Different lenders have different requirements for approving accounts receivable financing. Factoring companies can be choosy about which businesses they work with because there is never a total guarantee that customers will pay.
Financiers may consider the following information when determining whether or not to work with a business:
Lenders prefer working with businesses that have short-term invoices in a low-risk industry. Like with other types of loans, a poor credit history can prevent a company from qualifying.
1st Commercial Credit is an experienced factoring company facilitating payroll lines of credit for staffing companies and recruiting agencies. The services offered by staffing companies are fundamental and vital to connect employees and employers in San Antonio. In this sector, payroll funding remains the responsibility of the staffing firm and needs to occur before customers pay. This situation can cause some financial struggles if clients have extended payment terms for these services.
When a business begins experiencing cash flow shortages, a payroll financing company for staffing companies can help and provide the best financial solutions. In some cases, clients can take 30 to 90 days before paying, but payroll is still due every week. The overall costs of funding can affect your business and put you in a challenging situation financially. 1st Commercial Credit offers payroll funding solutions so you can continue running a successful business and take advantage of many other possibilities.
We provide payroll funding for staffing agencies in San Antonio, Texas, and buy their outstanding invoices for immediate cash—no need to wait weeks or months for payments when your company can have fast cash today. Once you set up an account with 1st Commercial Credit and sign an agreement, you will receive a cash advance for your invoices. This advance will vary depending on the type of industry and the risk associated with it. The factoring company will retain a percentage of the total invoice value, which is considered the factoring fee. These fees are calculated based on your client's creditworthiness and the length they take to pay.
San Antonio businesses have to wait months to be paid for temp staffing services, which can significantly affect your ability to meet payroll and pay taxes on time. In addition, the lack of cash flow prevents you from expanding your staffing agency and hiring new staff. This situation can put a stop to the growth and ability to take on big contracts. 1st Commercial Credit specializes in providing lending options for staffing companies and has an efficient and fast application and funding process. Staffing factoring is a financial alternative for short-term or long-term financing for staffing firms of all sizes and stages.
1st Commercial Credit is a company that factors receivables and understands the unique challenges of staffing firms in San Antonio. We know that even good and well-managed staffing agencies will experience cash flow difficulties as they expand quickly. 1st Commercial Credit strives to make the funding process for staffing agencies easy and accessible. We will evaluate your company's goals and needs to choose a funding program that will be the best fit for all of your business needs.
1st Commercial Credit can fund all temporary staffing agencies, regardless of industry, size, or time in business. Our financing services offer a consistent and reliable source of cash to alleviate cash flow issues. Your company will have the ability to cover pressing costs, manage growth, and take on new contracts and opportunities. Loans for staffing agencies are an ideal funding option for businesses just starting up or those companies with difficulties obtaining a traditional form of financing.
For bank loans, time in business and perfect credit history is a must to qualify. When companies don't fulfill all of these requirements, they will be turned down by banks and need to find an alternative to finance their business. To qualify with 1st Commercial Credit, your business only needs to provide outstanding invoices from creditworthy customers, and approval only takes a few business days.
700 N St Mary's St Suite 1400
San Antonio, TX 78205
Email: San Antonio Office
Call: +1 (210) 851-8286
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1st Commercial Credit is a company factoring receivables for Texas and various cities including:
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