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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 to 5 working days.
learn moreFor companies in need of cash sooner than the receivables are due, factoring receivables may be an excellent option.
Invoice Factoring is a straightforward yet effective solution that allows companies to trade their invoices for an injection of cash into their cash flow at a discount. Companies choose this method of financing to meet current and pressing business expenses while currently waiting on their receivable assets to be paid.
Reporting Benefits- Many business owners are hesitant to add more debt that must be reported on their company’s balance sheet. Factoring is an off-balance-sheet form of financing because receivables are considered contingent assets.
Minimizes Loss Risks- With traditional bank loans, all business assets are secured as collateral. On the other hand, a factoring company will only hold accounts receivable as collateral, minimizing the risks of losing your business equipment inventory or real estate assets. Business owners can also protect their equity and get through temporary cash shortages by factoring in receivables.
Helps Small Businesses- 1st Commercial Credit is a factoring company helping small businesses in Detroit with minimal sales volume by providing invoice factoring services. It is difficult for small companies that have been established recently and have lower annual revenue to be candidates for bank loans or lines of credit.
How Can An Invoice Factoring Company Help Businesses Offer Credit Terms To Their Customers? Another plus provided to your company by invoice factoring is customer credit flexibility. Many companies are losing potential customers to competitors because they cannot offer or extend credit terms. Offering multiple payment term choices is ideal for retaining and maintaining customers pleased.
Business owners no longer have to wait months for invoice payment and can factor in invoices quickly after these are issued and work is completed. Businesses will receive quick cash, and the company that factors the receivables will wait for the customer payments to arrive. This makes it easier to offer payment term options to clients without worrying about a possible shortage in cash flow.
1st Commercial Credit offers financial programs to businesses in Michigan and its cities in multiple industries including medical providers, trucking and freight, staffing agencies,cable and telecommunications, and many others. We also fund manufacturing companies in Detroit and offer payroll loans for businesses and lending on receivables.
Accounts receivable make excellent security for short-term loans needed to fund payroll, pay for materials, production costs production, and business expansion. (A/R) based financing involves the use of your Detroit company's accounts receivable to secure short-term loans. It's a form of asset-based lending that uses the organization's accounts receivable as collateral instead of using a combination of equipment, inventory, receivables, and other assets to secure the loan.
Receivables-based financing is different than factoring.
The terms Factoring and Receivables Based Financing are often mistaken by the other even though they are not the same. Both are financing ways of using receivables to obtain immediate cash flow. A/R-based financing uses receivables to get a loan, while factoring is selling the receivables to a factoring company.
A/R Financing vs. Factoring
Any manufacturing, distribution, service, or staffing company requiring short-term financing to manage its business cash flow may find A/R-based financing helpful.
This particular loan type is advantageous when:
New organizations without a substantial credit track record of their own will generally be unable to obtain A/R-based financing. If short-term cash is required, factoring would be a better, more feasible option.
Eligibility Requirements
To be eligible to receive accounts receivable financing, you'll need to meet the following requirements:
Most accounts receivable financing companies will also examine the business credit rating of your customers. Strong customer repayment history is a good indicator that you're eligible.
1st Commercial Credit's underwriting department makes the application process for financing receivables very simple and fast. The complete application process is online. An application can be filled and submitted there to get funding in 3 to 5 days.
1st Commercial Credit only asks for an accounts receivable aging report, your customer credit limit request, articles of incorporation, copies of your outstanding invoices, and rate confirmation agreements/ purchase orders.
1st Commercial Credit provides receivable finance for manufacturers experiencing growing orders and inability to keep up with the current working capital. Factoring for the manufacturing industry in Detroit involves selling a company's outstanding invoices to a factoring company for cash in advance. The money can be used to cover your operational business expenses.
If your Detroit company needs a manufacturing factoring company, 1st Commercial Credit is the answer. Businesses need to fill out a short application form, have invoices for work or orders already satisfied, and have creditworthy customers to qualify. Manufacturing companies in Detroit are choosing 1st Commercial Credit because we offer invoice factoring and financing for manufacturers. Our process is fast and straightforward. No financials are required to apply, no upfront or hidden fees, and we make same-day decisions.
1st Commercial Credit's invoice factoring and accounts receivable lines of credit provide the total flexibility needed to heighten your company's capacity to grow without having to pledge collateral. Manufacturers and importers in Detroit need more cash flow to run their businesses successfully. Crucial suppliers need to get paid, customers require longer credit terms, and 1st Commercial Credit can help make that happen.
Our supply chain finance solutions offer Detroit manufacturers the highest advance rate against the face value of unpaid receivables.
Once established with our receivable-based credit line, we can offer ancillary financial services to companies. These services include trade payable financing to suppliers, custom purchase order financing, non-audited inventory finance, and international invoice factoring.
What kind of staffing companies turn to us for funding?
Fast growing staffing agencies use this type of financing to increase their cash flow for daily expenses.We Finance staffing agencies with as little as $10,000 a month to $10 million for larger agencies. Most of our clients come to us with typical cash flow problems:
The biggest challenge staffing agencies face involves making weekly payroll when it takes 15 days, 30 days, or even 60 days for customer payments. If your company needs to borrow money for your staffing agency, factoring for staffing agencies gives companies access to the working capital they need to meet payroll obligations and grow.
Invoice factoring, also known as payroll funding, is a common financing solution for staffing agencies that helps them grow. The process works by submitting your invoices to a factoring company in exchange for immediate funding.
Factoring Helps You Grow Your Business
Invoice factoring for staffing agencies is more than a way to help you survive. It can help you thrive and grow. As you enjoy more reliable cash flow, you can focus your marketing resources and promote your agency. When you're struggling with cash flow issues, all you can do is tread water. Invoice factoring gives you the steady influx of cash you need to improve and expand your staffing agency.
Factoring Helps You Get Consistent Cash Flow
Lack of cash flow can seriously harm your business. Reliable cash flow is necessary for running your agency daily. As with any business, staffing agencies have their ups and downs. Yet even when business slows down, you still have to meet your financial obligations, such as paying employees and keeping your office running. Invoice factoring helps you get over rough patches by providing you with consistent cash flow.
Fast and Simple Type of Financing
Applying for a business loan is a complicated and time-consuming process. It can take weeks or months to get approved and get the funds you need. Invoice factoring, by contrast, is fast and simple. Once you're approved and submit unpaid invoices, you get funds deposited into your account right away. Banks limit the amount you can borrow based on criteria such as your credit score and how long you've been in business. With factoring, you can receive unlimited funds based on your receivables.
More Favorable Terms Than Traditional Financing
Many businesses that have trouble obtaining bank loans can qualify for factoring. Additionally, you'll find that the terms and conditions are more beneficial to your long-term financial health. For one thing, invoice factoring won't make your business take on additional debt. You aren't taking out a loan but simply leveraging your invoices. This means you don't need to put up collateral such as real estate or equipment. Many businesses find that factoring is a more favorable and less stressful type of financing than bank loans.
Factoring Companies Also Provide Back Office Support
Aside from financing, factoring companies help you save time and run your office more efficiently. They offer assistance in areas such as collections, accounts receivable reporting, and customer relationship management. When you work with a reputable factoring company, you get valuable help running your back-office tasks so you can devote more time to essential tasks such as recruitment. This is another way that lending for staffing companies can help your business thrive and grow.
Extra Benefits Staffing Agencies in Detroit Experience with Our Accounts Receivable Financing
Detroit is rated as one of the top 10 cities for the potential for economic growth. Detroit also provides the talent, international infrastructure, resources to help existing and new businesses to thrive. Detroit is recognized as one of the best places to live for tech entrepreneurs. Businesses are choosing Detroit because of its business environment and its tax foundations.
About 180,500 people work in downtown Detroit. Detroit has propelled Michigan's rankings in emerging tech fields such as information technology, life sciences, and advanced manufacturing. Metro Detroit is the second-largest source of engineering and architectural job opportunities in the U.S. The world's automobile capital, Detroit, has many of the auto industry companies headquartered there.
Detroit is known for its rock music, Motown sound, world-class museums, automobile culture, arts, sports teams, and theatres. Detroit offers many activities and things to see. It has become an exciting travel destination filled with technological advances and historic charm.
Detroit is a vibrant city with a fascinating history and an exciting future, rapidly becoming a must-visit destination in the USA. Nicknamed 'Motor City, it's best known as the birthplace of the modern automobile. Detroit also offers museums and is the perfect place for music and art lovers.
1st Commercial Credit is a receivable factoring company in Michigan offering funding programs in:
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