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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 moreInvoice factoring services are the ideal financing solution. A company can sell some or all of its outstanding invoices to a factoring company to improve cash flow and achieve financial stability. The factoring company will immediately give you a large percentage of the total invoice amount and then collect payment directly from your clients.
The process of factoring looks like this:
When businesses constantly deal with piles of outstanding invoices due in weeks to months, invoice factoring is the financial solution to save you from financial struggles. It is common for many industries to have 30+ day payment terms, meaning that companies often have to wait before receiving payment. If your company has money that should be flowing in the cash flow and instead is stuck in stagnant invoices, you should consider factoring receivables.
Selling these outstanding invoices to a factoring company will allow you to release a considerably large part of the total invoice amount. It is always a great idea to begin planning and become familiar with the services offered by a reliable and experienced lending company that will work with your situation and improve your cash flow.
Factoring companies are specialized lenders that provide factoring services, which involve buying a business's unpaid invoices at a discount. Your business is advanced a percentage of the invoice, say 90%, within a few working days, and the factoring company will take ownership of the invoice and collections.
Working with cash flow lenders will provide your business with fast cash, so you can repay debts, cover short-term expenses, and take advantage of business opportunities. Turning to factoring businesses in Minnesota can bring many advantages to your business.
Some of those benefits include:
A factoring company (or accounts receivable factoring) converts invoices sold on credit terms for 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 specializing in evaluating accounts receivable and making 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. Approval is likelier as long as a business has been in operation, meets revenue requirements, and is free of liens or legal issues,
As businesses in Minnesota experience growth, they will find themselves in need of extra cash flow at some point. A good cash flow is needed for payroll, expansion, marketing, and other business expenses. For some businesses, traditional bank loans are just not an option. Companies in Minnesota looking for short-term flexible funding or trying to avoid adding more debt to their books might want to stay away from bank loans. On the other hand, accounts receivable factoring (invoice factoring) is a financing solution that helps companies improve cash flow by putting the cash stuck in unpaid receivables to work. Receivable financing takes outstanding invoices as a company's collateral, which are then sold to factoring companies. By selling your company's receivables, you will receive fast cash in advance with each invoice sold. The amount of funding available grows as your business sales increase.
It's common for banks to deny small business owners a business line of credit, especially if it's a recent or emerging business. Factoring companies base approval on the credit status of your customers (not your company's), who will be the ones paying the invoice. Factoring financing is an excellent solution for businesses in Minnesota with bad credit or no credit at all.
As an extra benefit, the process of factoring can even help you improve your credit score and obtain financial stability within your business. 1st Commercial Credit works with many industries and is one of the best factoring companies across the nation. We will evaluate your company's receivables and match them with a financing program that will help you meet any specific goals or financial needs.
Conventional bank loans are strict and fixed in their process. Banks will lend businesses an amount of money, which is expected to be paid back over a certain period in addition to a high amount of interest. Obtaining the extra cash also means adding more debt to your books. With factoring, you aren't acquiring any more debt because you're selling a valuable asset. Another advantage of factoring is that businesses are not locked into long-term contracts, and the terms are flexible. Invoice factoring offers financial solutions that can yield unlimited growth for companies in Minnesota, including credit protection, credit checking and collection services, same-day funding, and unlimited funding potential.
Factoring gives businesses access to unlimited funding, has no debt to repay, has a fast approval process in 3 to 5 working days, and approval is based on your customers' credit strength, not your company's. With a traditional bank loan, interests have to be paid overtime, and funding potential is usually capped at a certain amount.
Also, the approval process for banks is usually long, can take up to a few months and is primarily based on your company's credit history. It is generally challenging for small businesses and startups to qualify for bank financing, but it is common for them to be eligible for invoice factoring. 1st Commercial Credit provides invoice factoring services for all businesses in many industries, and our invoice factoring rates are competitive between 0.69% to 1.59%. We also offer other financial services like PO financing and our purchase order financing rates are extremely competitive. Our PO financing program provides funding for businesses with purchase orders to pay their suppliers and smooth out cash flow. This form of financing is an effective and popular option for those businesses in need of a quick, effective and reliable way to finance their purchase orders. Additionally, businesses looking for asset-based financing can also come to 1st Commercial Credit and take advantage of our asset-based lending rates.
Produce clients that come to us all have the same cash flow issues. Agriculture companies usually want cash on delivery or pickup, and the customers wish to have credit terms of weeks or months. This situation causes a tremendous cash flow gap when trying to grow your distribution company. The agriculture business involves a complex process with hard work and financial struggles from time to time. Factoring agricultural businesses is a simple process for us, and we can evaluate and determine if your Minnesota business can benefit from our financing services.
To make everything work smoothly, farms and agriculture companies require consistent and reliable financing. Yet, the agriculture business often involves slim margins and seasonal sales that traditional banks do not want to lend on. Agriculture factoring is how agriculture companies can access the funds needed to harvest and ship their crops. The prompt delivery of perishable produce is crucial for all agriculture businesses. Failing to complete the delivery on time can result in considerable business losses. Fortunately, 1st Commercial Credit offers agriculture financing methods such as account receivable factoring.
Factoring produce receivables is a better financial solution than traditional loans and lines of credit. Unlike bank loans, which require an almost flawless credit history and often substantial collateral to secure funding, factoring for agriculture businesses puts cash in your business account without making you go through a time-consuming, expensive, and dreadful process.
Agriculture and produce factoring offer many significant advantages to your company, including:
1st Commercial Credit is a company that factors receivables and provides financial services for producers while making the entire process simple and accessible. Receivables funding can be a complicated process that can be made easier if you partner with an experienced funding company. Your ability to grow your business will be dependent on your ability to manage your business's finances.
One of the most common struggles for small and medium-sized companies is maintaining a consistent and healthy cash flow. Many companies in the agriculture industry struggle with cash flow dips when it takes 30, 60, 90, or more days for payments to arrive. As a lending company, we strive to offer the best financial services to businesses and our factoring rates are among the lowest for the produce industry.
Agriculture factoring is a long-established form of financing offered by 1st Commercial Credit that has been used for many years. Farmers, distributors, food processors, food manufacturing companies, food packaging companies, shippers, and suppliers can all take advantage of this form of financing. Agriculture factoring provides capital for your business fast in as little as 3 to 5 days. By purchasing your current unpaid invoices, agriculture factoring companies can pay you for them right away. Businesses won't have to wait weeks or months to collect payment from their customers.
Minnesota has a robust industry, and it shows no signs of slowing down. Agriculture is a crucial sector and its successful growth supports the state's economy. Minnesota is home to over 74,000 farms and 1,000 agricultural and food companies. Altogether, the industry contributes $75 billion to the state's economy annually and provides more than 340,000 jobs. Minnesota makes a massive impact across the country with several top crops. Also, several of these crops are essential not only for the United States but for the world, too. Soybeans, corn, and wheat are Minnesota's leading exports, heading across the globe to top markets in China, Japan, and Mexico.
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