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Invoice Factoring Company In Maryland
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 to 5 working days.
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Does Your Maryland (MD) Business Need An Accredited Invoice Factoring Company?
Invoice factoring is a financing alternative where a business "sells" some or all of the company's unpaid invoices to a third party to improve cash flow and obtain revenue stability. A qualified and experienced factoring company like 1st Commercial Credit will pay you a high percentage of the invoiced amount right away, then collect payment directly from your customers. There are many advantages associated with invoice factoring, which will be explained in the following paragraphs.
When should your Maryland company use factoring?
Your business should think about using invoice factoring when you frequently have many outstanding invoices putting your cash flow in a tough spot. For example, let's imagine you sell on 30,60, and 90-day payment terms. Most of your clients will pay within 30 days – some may require chasing, others might pay on time – while others may go over the limit and require more effort on your part to obtain final payment.
Those extended payment terms will take out a big chunk of revenue and business cash reserve, representing the bulk of your potential cash flow, but you can't use it. Factoring receivables allows business owners to release that cash almost immediately, or at least a large part of it.
This money can be used to:
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- Improve cash flow
- Repay an existing loan
- Cover short-term expenses
- Take on more business opportunities
Factoring Advantages:
- Reliable, predictable, and improved cash flow — By selling your invoices to specialized cash flow lenders, you can have most of your invoices paid almost immediately rather than having to wait a long time before receiving payment. It makes running a business more efficient and accurate and allows you to take advantage of opportunities that might otherwise be unaffordable.
- Better chance of your business overcoming financial struggles and unexpected expenses — Better cash flow gives your business a better chance to survive in a competitive business climate. Many companies fail due to poor cash flow, but invoice factoring can help you achieve a reliable and healthy cash flow.
- Cheaper and more accessible than a bank loan — accounts receivable funding is usually more affordable than a traditional loan and easier to obtain, making it suitable for short-term funding needs. Factoring also takes the nuisance of debt management out of your hands.
- Reduces business overheads — Invoice factoring could help reduce your company overheads. As with any other financing method, there are fees associated with invoice factoring. These invoice factoring fees may result in costing less than the cost of paying dedicated staff for that specific area. Invoice factoring may also make it a lot easier for staff working in your accounts department, as chasing payments is often challenging.
Does Your Staffing Firm Have To Wait 30-90 days To Receive Payments From Clients?
Invoice factoring services can help you make payroll each period. If your business is in a situation where cash flow prevents you from hiring new employees, factoring might be the financial solution you need. In order to be sure that this financial alternative is the best fit for your business, getting familiar with the factoring process and what to expect is crucial.
As a temporary staffing agency, we know that having reliable and consistent cash flow is the lifeline of your business. Firms have many expenses, and weekly payroll is a big one. 1st Commercial Credit has been providing financial solutions to companies in Maryland for over 18 years and can help your business today. As your business grows, the more money you need to pay your staff. Instead of turning to traditional bank loans, you can sell us your unpaid invoices at a discounted rate in exchange for immediate cash. Payroll is the most considerable expense for most companies, and to be fulfilled each period, a healthy business cash flow is crucial, especially for the staffing industry.
How Can Invoice Factoring Help You Make Payroll?
A staffing company needs to have a solid cash reserve and cash flow. Most staffing firms need to pay their staff weekly or bi-weekly, but customer payments can take 30 or 60 days to come in. Like most staffing companies, you will need financial assistance to run and continue growing your business. You can tap into your personal savings or obtain a line of credit with the bank to get the working capital, but this also comes with high costs.
1st Commercial Credit offers factoring services with a quick, easy to qualify for, and debt-free. We are experts when it comes to financing staffing agencies for payroll needs. Invoice financing for staffing companies is a fast and straightforward financing method, especially when compared to a bank line of credit. Once you send us the invoices you want to factor in, we verify them and send the money within 24 hours.
Invoice Factoring or Bank Line of Credit?
Staffing companies have a difficult time getting approval for traditional bank loans. This is because a line of credit with the bank is generally based on a company's taxes, existing debt, collateral, and time in business.
On the other hand, when business owners use receivable loans for staffing agencies to cover payroll, they will be selling their outstanding invoices to a specialized factoring company each week. This type of financing will give you up to 97% (for some businesses) of the total invoice amount within 24 hours. As with any other financing method, a factoring fee is charged and deducted from the reserve before giving it back to the business owner. The best thing about receivable factoring is that as your staffing firm grows, so can your funding possibilities.
What is a Factoring Company?
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 receivables 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.
Providing Financial Solutions To Cybersecurity & IT Companies In Need
When it comes to cybersecurity, Maryland is the place to be. It has the largest cybersecurity employee population in the country. Some of the top cybersecurity agencies call Maryland home, including the U.S. Cyber Command, National Security Agency, Defense Information Systems Agency, and National Institute of Standards and Technology. Leading IT firms, top universities, and tech-savvy workers are working together with the federal government and the U.S. military in Maryland to create the best environment and assist each other in succeeding.
Maryland is where cyber works. Here, businesses can find a high density of cyber engineers from the area’s strong intelligence community. Companies will also find a lower cost of doing business than other tech-focused states like California, New York, or Massachusetts. On top of this, in Maryland, you’ll find the nation’s top security agencies along with universities dedicated to preparing tomorrow’s cybersecurity leaders.
Because of all of the advantages this state offers, big cybersecurity companies choose to establish their cybersecurity operations in Maryland. Consequently, these institutions attract the nation’s best cybersecurity practitioners, who will then turn to Maryland’s private IT & cybersecurity sector or build their path with a startup. In addition to cybersecurity, Maryland universities are leading in other high-tech arenas, such as quantum computing. As an example, the University of Maryland, College Park, was among the top 10 institutions for quantum computing worldwide.
There are currently 60 federal agencies and 20 military installations in the Maryland area, creating serious business opportunities for cybersecurity and technology companies. These abundant business opportunities are paired with another critical component to business success: affordability. The cost of running your business here is far more affordable than running a cyber business in New York City or Silicon Valley. Employees also find the lower cost of living and the highest median household income a huge plus when working in a company established or relocating to Maryland.
1st Commercial Credit has approved and processed funding and IT staffing factoring for companies specializing in various cyber security layers, including Network Security, Data Security, and Applications Security. Our clients come to us because of increased demand for their services and a lack of working capital to continue payroll obligations.
Need Funding For Your Company In Maryland?
All the IT Security Companies have the same problem easily fixed with our accounts receivable financing program. While some businesses can invoice at net 30-day terms, some are waiting until the 1st day of the month to invoice for the previous month’s work. This situation makes it very difficult for the average IT Company to deliver its services while experiencing a shortage in cash flow caused by the extended terms offered to the customers while keeping payables afloat. 1st Commercial Credit is a factoring company that provides payroll financing, which is crucial to completing work before generating an invoice.
About Maryland
Are Collateral and Good Credit Required For Factoring?
So let's imagine you are a business owner that has done the proper research about all possible financing alternatives for your cash flow needs. After all this research and due diligence, you have concluded that an invoice factoring service is the best fit for your business. That's amazing! 1st Commercial Credit is an experienced factoring company that is happy to finance companies in Maryland.
To be better prepared, here is a preview of the few things that you may need to submit during the application process:
- A 2-page online application
- Invoices for orders that have been completed
- An accounts receivable aging report
- A copy of your Articles of Incorporation
- Creditworthy customers
- A business account with the bank
- A tax ID number
- A form of personal identification
Qualifying for the AR financing program is quick and simple. Generally, the majority of companies that sell on credit terms and apply will be approved. However, as with any other type of financing, there are some qualification requirements that business owners should be aware of:
- The company must be selling invoices on net-30, 60, or 90 credit terms. Terms longer than 90 days are unlikely to be eligible for funding, but exceptions can be possible in some cases.
- The company's account debtors (the company's clients) should have good credit and an extended payment track record. Each account you plan to factor in is assigned a credit limit previously established by the factoring company. This limit can be adjusted if needed.
- A business must have a good structure within the corporation. This means making sure all documents related to insurance, service agreements, tax information, and invoices match the Articles of Incorporation.
- The business must be free and clear of any UCC filings limiting the "Accounts and Proceeds." In some specific cases, we can still be able to fund a business with IRS tax liens. These are situations that can be addressed on a case-by-case basis.
- The owners must have a clean criminal background.
- The account debtor (company's clients) will need to acknowledge that the invoices have been pledged. The factoring company's address will need to be updated as the new payment address.
When Could Invoice Factoring Not Be A Good Fit For You?
Not all businesses will qualify for an invoice factoring service for different reasons, including the nature of the industry or the types of clients the company sells to. Sometimes the risk is far greater than what factoring companies can manage and consider. To learn more about this and how we can help your business, contact 1st Commercial Credit directly for an assessment.
