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.
- Two decades of experience
- Simple qualification requirements
- Competitive rates
- The ability to get you funded quickly
- Expertise in many industries
For a quote, fill out this form or call us toll-free at (877) 300 3258.
Main Product Selection
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.
Helps trucking companies 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.
Helps subcontractors whose commercial clients, GCs, and builders pay in 30 to 90 days. Provides funds to cover company expenses. Requires a minimum A/R volume of $100,000
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.
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 instalments. The initial instalment covers 80% to 95% of the invoice. Factoring companies deposit the advance shortly after processing your invoices.
The second instalment covers the remaining 5% to 20% that was not initially advanced. The factoring fees are typically subtracted from this instalment, which settles the transaction.
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:
- Improves cash flow
- Minimizes financial uncertainty
- Enables you to offer net-30 terms
- Line adapts to growing revenues
- Simple qualification
- Quick deployment
e) Simple qualification
Invoice factoring has simpler qualification requirements than comparable lines of credit. Requirements include:
- Company must be appropriately established
- Customer must be creditworthy
- Invoices should pay in less than 60 days
- Unencumbered invoices (e.g., PPSA or Hypothèque)
Solution: Purchase order financing
Purchase order (PO) 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 fulfil 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 US.
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:
- Finance company evaluates the order
- Finance company issues LC to supplier
- Supplier manufactures product
- Product delivered to the end customer
- 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:
- Available to startups with some experience
- Enables you to fulfil large orders
- Can cover most of your supplier costs
- Simple qualification
- Flexible limits
c) Qualification criteria
Qualifying for PO financing is simple. The most important requirements include:
- Sell products/services to creditworthy commercial clients
- Have minimum margins of 20%
- Have orders greater than $100,000
- Use third-party manufacturing (or resell goods)
- Don’t manufacture goods directly
The cost of PO financing varies based on transaction risk. For an instant quote, submit this form or call us toll-free at (877) 300 3258.