Small and midsize companies often have to wait 30 to 60 days to get paid by their commercial clients. This situation can create cash flow problems and affect your ability to operate the business effectively.

Commercial Capital is a leading provider of invoice factoring and purchase order financing in Canada. Our solutions enable you to leverage your accounts receivable and provide funds to pay suppliers, employees, and other expenses.

We have:

• Two decades of experience
• Simple qualification requirements
• Competitive rates
• The ability to get you funded quickly
• Expertise in many industries

For a quote, please fill out this form or call (877) 300 3258.

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Solution: Factoring

Invoice factoring allows companies to improve their cash flow by financing their accounts receivable. It provides funds that can be used to pay for the costs of running the business. When used correctly, factoring provides a stable platform that supports growth.

a) How does factoring work?

Transactions are usually financed in two installments. The initial installment covers between 80% – 95% of the invoice. Factoring companies deposit the advance shortly after processing your invoices.

The second installment covers the remaining 5% – 20% that was not initially advanced. The factoring fees are typically subtracted from this installment, which settles the transaction.

Most companies use factoring regularly. This ensures they have the working capital to meet their needs. To learn more, read “What is factoring?” and “How does invoice factoring work?”

b) High advances

The size of the advance is essential to your cash flow. In most cases, you want the highest possible advance.

Advances vary based on industry and transaction risk profile. Generally, staffing and transportation companies can expect advances of 90% to 95%. Other industries can expect advances of 80% to 85%.

c) Low rates

We provide competitive rates. They range from 1.5% to 3.5% per 30 days based on your industry, volume, and risk. To get an instant estimate, fill out this form. Call us toll-free at (877) 300 3258 to speak with an expert.

d) Clear benefits

Factoring offers many advantages to companies that use it. These include the following:

1. Improves cash flow
2. Minimizes financial uncertainty
3. Enables you to offer net-30 terms
4. Line adapts to growing revenues
5. Simple qualification
6. Quick deployment

e) Simple qualification

Invoice factoring has simpler qualification requirements than comparable lines of credit. Requirements include:

1. Company must be appropriately established
2. Customer must be creditworthy
3. Invoices should pay in less than 60 days
4. Unencumbered invoices (e.g., PPSA or Hypothèque)

Solution: Purchase order financing

Purchase order financing is a specialized program for companies that resell or wholesale goods. It helps companies that have a large purchase order by financing the supplier costs of the order. This transaction enables you to fulfill the order and book the revenue.

The transaction settles once your client pays for the goods.

Note: This solution cannot be used by companies that manufacture goods directly. Consider supplier financing instead.

a) How does PO financing work?

Purchase order financing companies handle the supplier payment directly. In most cases, the finance company pays your supplier with a Letter of Credit (LC). Some exceptions can be made if your supplier is a large company in Canada or the USA.

The letter of credit enables your supplier to manufacture and deliver the goods. These goods are then shipped to the end customer which concludes the order. The transaction settles once your customer pays their invoice, usually on net-30 to net-60 days.

Transactions flow as follows:

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

To learn more, read “How does purchase order financing work?”

b) Clear benefits

PO financing has several advantages over other solutions. These include the following:

1. Available to startups with some experience
2. Enables you to fulfill large orders
3. Can cover most of your supplier costs
4. Simple qualification
5. Flexible limits

c) Qualification criteria

Qualifying for PO financing is simple. The most important requirements include:

1. Sell products/services to creditworthy commercial clients
2. Have minimum margins of 20%
3. Have orders greater than $100,000
4. Use third-party manufacturing (or resell goods)
5. Don’t manufacture goods directly

d) Costs

The cost of PO financing varies based on  transaction risk. For an instant quote, submit this form or call (877) 300 3258.