Bank Factoring of Accounts Receivable

Until recently, banks have stayed out of the factoring business and for the most part, they still prefer tangible assets to collateralize their lines of credit. Banks realize that receivable finance requires high overhead, professional credit analysis, technology updates and substantial maintenance.

More often than not, bankers find themselves referring out clients that wish to use or require a “Bank Factoring” program. Government regulation pressures on the banking industry have tightened lending parameters, and banking clients with rapid growth will inevitably cause the borrowing leverage to grow to levels which are unacceptable to most banking institutions.

A good banker knows the bank's limitations and will work to preserve at least part of the relationship. Our factoring solutions benefit the bank by keeping a long term relationship with their clients. The customer's business benefits by accessing receivable finance that their bank can no longer provide or extend.

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1st Commercial Credit has become a great outsource for bankers that want to help their clients establish a receivable finance program while still maintaining a close relationship. The process is simple with a more basic credit analysis focusing on the quality of the account debtors (your customers). Most funding transactions (depending on the industry) may take only 3 to 5 working days vs. months by another lending institution.

We are not in the banking business, banks will not have to worry about us competing for their business. 1st Commercial Credit specializes in providing domestic and export receivable finance, purchase order financing, letters of credit, credit analysis, credit protection, collections and accounts receivable management.

Bankers a Referral Source: A good banker knows the bank's limitations and will work to preserve at least part of the relationship. Our factoring programs benefit both the bank by keeping a long term relationship with the customer, and the customer in need of receivable financing that the bank can no longer provide or extend.

While banks typically need a history of profits and audited financials, 1st Commercial Credit provides factoring facilities with much more flexibility with regard to documentation, credit, and record keeping issues. In some cases, companies that qualify for a bank credit line today, may find themselves with inadequate funds for growth in the near future.

1st Commercial Credit can accommodate businesses that have outgrown their bank line by (a) buying out the bank credit line using the receivables to leverage out the buyout or (b) the bank will subordinate the accounts receivable to us in order to provide a factoring arrangement with the prospective client.

Factoring companies establish credit limits by evaluating your customer’s ability to pay, not yours. Your factoring credit facility will be virtually unlimited for future growth and will be based on accounts receivable owed by credible clients.