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Québec: Invoice Factoring

Commercial Capital is a leading provider of factoring and purchase order financing in Québec. We help small and midsize companies that need funds to pay employees, suppliers, and other business expenses. A few details about us:

  1. Over 20 years of experience
  2. Expertise in many industries
  3. Simple qualification requirements
  4. Competitive terms
  5. Quick deployment

Our financing solutions provide you with dependable cash flow. We help companies that need working capital to improve operations and pursue growth opportunities. Complete this form or call us toll-free at (877) 300 3258 for a quote.

Product selection:

Invoice Factoring

Invoice Factoring

Helps companies whose clients pay in 30 to 90 days. Factoring provides immediate cash flow to cover company expenses. Available to companies of all sizes.

Freight Bill Factoring

Freight Bill Factoring

Helps trucking carriers whose shippers and freight brokers pay in 30 to 90 days. Provides funds to pay for drivers, fuel, and other expenses. Available to companies of all sizes.

Staffing Agency Factoring

Staffing Agency Factoring

Helps staffing companies whose clients pay in 30 to 90 days. Provides funds to cover payroll and expenses. Available to staffing agencies of all sizes.

Purchase Order Financing

Purchase Order Financing

Helps companies that have a purchase order from a large client and need funds to fulfil it. Helps cover direct supplier expenses enabling you to fulfil the order.

Solution: Invoice factoring

Factoring improves your cash flow by financing your invoices due to be paid in 30 to 90 days. It provides working capital to small and midsize companies that need funds to pay for critical business expenses.

Invoice factoring is designed for small businesses that need immediate funding. It has simple qualification criteria and can be deployed quickly.

a) How does factoring work?

Most factoring transactions are financed in two instalments. The first instalment is called the advance. The advance is deposited into your account shortly after your invoice is processed.

The advance covers 80% to 95% of the invoice value. It varies based on your industry and transaction risk profile. The remaining 5% to 20% is deposited into your account, less the factoring fee, once your customer pays their invoice on their usual schedule.

Learn more: Read “How Does Factoring Work?

b) Competitive terms

Our factoring plans combine a high advance at a competitive cost. Our average advance is 85%, though industries like transportation and staffing qualify for advances in the 90% to 95% range.

The average factoring rate ranges from 1.5% to 3.5% per 30 days. Rates vary based on your industry and transaction risk. Complete this form or call us toll-free at (877) 300 3258 for a quote.

c) Clear benefits

Invoice factoring offers clear benefits over comparably sized alternatives. These include the following:

  1. Improves cash flow
  2. Enables you to offer net-30 terms
  3. Adapts to your revenues
  4. Can be deployed quickly
  5. Simple qualification

d) Simple qualification

Qualifying for invoice factoring is simpler than for other solutions of comparable size. Requirements include the following:

  1. Be a provincial or federal incorporation
  2. Have creditworthy invoices
  3. Have unencumbered invoices (e.g., Hypothèque)
  4. Have no serious legal/tax issues

Solution: Purchase order financing

Purchase order (PO) financing helps companies that resell products, have a large order, and need funds to cover supplier expenses. It provides funds to pay the supplier, enabling you to fulfil the order and book the revenue.

Commercial Capital is one of the few companies that can provide purchase order financing in Québec. Fill out this form or call us toll-free at (877) 300 3258 for more information.

a) How does it work?

The first step in the transaction is to set up an account and determine if the purchase order qualifies for financing. Once approved, the factoring company handles supplier payments directly.

All foreign suppliers that need a pre-payment must be paid with a Letter of Credit (LC). Canadian and US suppliers may be paid by wire transfer if they meet certain criteria. In most cases, they will be paid with an LC as well.

Most go through these steps:

  1. Finance company issues LC to supplier
  2. Supplier manufactures product
  3. Product delivered to the end customer
  4. End customer pays, and the transaction settles

Transactions can settle through a factoring line or by waiting until the end customer pays. Which method is used depends on the transaction profile.

To learn more, read “How Does Purchase Order Financing Work?

b) Simple qualification

PO financing has simple qualification requirements and can be used by small companies. The most important requirements include:

  1. Being a registered provincial or federal company
  2. Selling products/services to creditworthy commercial clients
  3. Having minimum margins of 20%
  4. Having orders greater than $100,000
  5. Using third-party manufacturing (or reselling goods)
  6. Not manufacturing goods directly

Fill out this form or call us toll-free at (877) 300 3258 for more information.

How to select a factoring company

Selecting the right factoring company is essential to the success of your business. Québec has a few factoring companies, and the field is competitive. Consider asking the following questions while you evaluate potential partners:

a) Do they have representatives in Québec?

Most Canadian factoring companies offer services in Québec. However, only a few of them have representatives in the province. These are usually based in Montréal or Québec City. In general, you are better off with a factoring company that has a local representative.

Keep in mind that only a few companies offer purchase order financing in Québec. Working with a PO financing company based elsewhere should be fine as long as they have experience financing transactions in the province.

b) How long have they been in business?

You are usually better off with a factoring company that has been in business for a few years. Longevity usually shows the factoring company is well-managed and can handle different economic cycles.

c) Are their terms competitive?

You want to make sure that your financing plan does not outlive its usefulness. Examine their terms, including advances, rates, and contract length, to determine whether they are competitive and fit your objectives.

Essential reading

We want to help you make an educated decision about using our products and services. We keep a learning centre with important financing information. Popular articles include:

1. What is Factoring?
2. Freight Factoring for Québec-Based Carriers
3. Is Factoring Right for my Business?