Is It Important To Find A Finance Company That Specializes In Your Industry?

by Crestmark 23. May 2012 12:19

Are all factoring companies equally capable of financing every deal? From the perspective of someone seeking credit for your business, it can be tempting to knock on the door of every bank and non-traditional lender in your area and online. But is it really better to work with anyone who will give you the kind of loan you need?

Your Field Is Unique

Immersed in the daily reality of life in your industry, it's easy to lose perspective on just how unique your business really is. The flow of revenue for the transportation industry – punctuated by delays, spiking gas prices, and lag time between payments – is very different from the expected pattern in a staffing agency, which in turn is different from a retail business. Because non-traditional lenders are often relying on these patterns to provide financing, it's vital that they have an understanding of what to expect. Your explanations may not tell them what they need to know.

A Specialized Company Has Custom Solutions Ready To Go

Many fields have developed specific lending practices that are unique within that industry. For example, trucking has freight bill financing and fuel cards. Government contract financing has to understand the additional paperwork and disclosure requirements that are necessary when working with federal or state organizations. A company that has worked with your field before knows what to expect and has already created unique solutions that are designed specifically to meet your needs. You just won't find that level of service in factoring companies that don't know your business.

Crestmark has always been proud of our customized offerings for fields like staffing, manufacturing, transportation, apparel, and government contracting. Even when we don't have prior experience in your field (a rarity considering the diversity of our staff and years of lending across industries) we know the questions to ask in order to provide you with the right non-traditional lending tools for your needs. 

Discount Vs. Traditional Accounts Receivable Financing

by Crestmark 25. April 2012 06:35

Accounts receivable financing is one option for businesses whose working capital needs exceed what can be obtained through traditional term loans from conventional banks. Whether your enterprise is new, your funding demands unusual, or you're simply having trouble getting credit in a tight economy, accounts receivable financing can be a good choice. But what kind best suits your business? There are two main options: traditional A/R financing or discount financing.

Traditional, Non-Recourse Accounts Receivable Financing

Traditional A/R financing begins with your potential financier checking your customer's credit. This should happen before you invoice to determine approval. Once your client is approved, the financier (known in this case as the factor) will purchase the invoice from you. In this case, the factor actually assumes complete responsibility for the invoice because they now own it. That includes ensuring payment even if your customer is unable to pay.

Discount, Recourse Factoring

Discount factoring is similar to traditional accounts receivable financing. It too involves borrowing against unpaid invoices, but in this situation the factor does not actually purchase the accounts or assume liability for them. Advantages of this system include lower fees and in some cases faster turnaround and greater availability of funds.

Both of these options allow for flexibility and funding that might not otherwise be available. Both also involve your factor working directly with your client, a proven system that shortens the time between invoice and receipt of payment.

To learn more about accounts receivable financing, contact one of Crestmark's experts. We can help you understand the details and differences between discount/recourse and traditional/non-recourse factoring and select the right option for your business.   

Funding New Opportunities With Accounts Receivable Financing

by Crestmark 4. April 2012 06:19

Accounts receivable financing is a simple concept. You start by providing a product or service to your customer. Then you bill them for what you provided. The service has been provided, but they haven't paid you yet. An outstanding invoice like this is a perfect candidate for accounts receivable financing. Rather than having to wait for the client to eventually pay you, you may be able to obtain cash from the invoice more quickly by working with a lender like Crestmark.

Why It Works For New, Big Clients

There are many applications where accounts receivable can shine, but it can be particularly valuable when your business experiences a sudden surge of growth, such as a new client. When you provide the first delivery of goods or services, it is often difficult to come up with the funding to handle the second and third under your current business conditions. Using accounts receivable financing allows you to bridge the gap between the funds your business has currently and what you expect to need for future orders.

A Non-Conventional Funding Alternative

Accounts receivable financing is a good opportunity for new businesses because it often has different requirements for approval when compared with bank products such as a traditional term loan. In this case, the main concern is how creditworthy your client is, not your business. For this reason, a lot of new firms use this to help them expand early on as they receive their first major orders.

Crestmark offers accounts receivable financing and other financial tools that can help when traditional bank loans don't meet your needs. Contact one of our lending experts today to learn about how we might be able to assist you with your business capital requirements. 

Accounts Receivable lending still good option

by Michelle 10. August 2010 11:15

I was recently reading an article about access to credit for small businesses and thought, geeze…what’s a business owner to think these days?  Are things getting better?  Are banks lending…or not?

Here are a couple of quotes from the WSJ.com article, “For Small Business, Slow Gains In Credit,” dated July 13, 2010;

“Overall, the survey data seem to suggest that current economic conditions for small businesses, though still quite challenging, are less dire than they were in 2009.” This is a quote from Robin Prager, and assistant research director at the Fed.  She was quoted recently at the Fed’s forum for small business lending.  Sounds promising, right?

Well, not so fast…just 2 paragraphs later in the same article, Fed Chairman Ben Bernanke is quoted as saying, “The formation and growth of small businesses depend critically on access to credit.  Unfortunately, those businesses report that credit conditions remain very difficult.”

So, as a business owner who needs credit to start or grow their business I’m sure many are left wondering, “I can perhaps, maybe get a loan or not with my local bank…they more or less may or may not lend me a small amount of money???”

Sometimes I think we would all be better off reading tea leaves…but I digress.  On to the main point…

All of this uncertainty leaves many small business owners deciding not to hire or grow until they can get a better feel for what they can reasonably expect from lenders in their area.  And to speak to the other side of this equation, local and regional banks are nervous about what types of businesses to lend to due in part to the many regulatory rules and a general perception that in these times any risk may be too risky. 

The good news is that accounts receivable lending through factoring or asset based lines of credit remains an excellent option for small to medium sized businesses who don’t qualify for a traditional loan.  Our industry continues to see allot of activity and we are actively working to help as many business owners as possible.

In these perplexing times alternative lenders are a good option.

Crestmark announces our new website

by Michelle 2. August 2010 11:21

After almost a year of hard work and collaboration we are very excited to launch our new, updated website!

Crestmark is an FDIC insured financial institution which specializes in providing working capital through accounts receivable lending to small and medium sized businesses across the country. The bank was originally founded in Troy, MI and in recent years has expanded it’s footprint through a series of acquisitions. These acquisitions brought in already established, successful accounts receivable factoring companies. All of these events lead to the need to create a newer, updated and more comprehensive website.

We hope that you will find the new site informative and helpful! Within the pages of the site, you will find explanations of the various types of solutions that we offer; accounts receivable factoring, asset based lines of credit, and accounts receivable loans. I think you will also find that we are very diverse in the industries we serve; staffing, manufacturing, distribution, apparel, government contractors to name a few.

So…take a look, and let us know what you think. We think you’ll be pleased!

 


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