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Alberta: Invoice Factoring

We help small companies that need funds to pay employees, suppliers, and other essential business expenses. Commercial Capital LLC is a leading provider of factoring and purchase order financing in Alberta. We have:

  1. Over 20 years of experience
  2. Expertise in local industries
  3. Easy qualification requirements
  4. Competitive terms
  5. Fast turnaround

Our factoring programs improve your cash flow by financing your accounts receivable. They have simple qualification criteria, can be deployed quickly, and provide a platform to support your growth plans.

Fill out this form for an immediate quote. Call (877) 300 3258 to speak with an expert.

Product Selection

Invoice Factoring

Invoice Factoring

Helps companies whose clients pay in 30 to 90 days. It provides immediate cash flow to cover company expenses. Program has competitive terms and can be deployed quickly.

Freight Factoring

Freight Factoring

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 carriers of all sizes.

Construction Factoring

Construction Factoring

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 $500,000.

Purchase Order Financing

Purchase Order Financing

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

Service: Invoice Factoring

Factoring helps companies improve their cash flow by financing their accounts receivable. It provides funds to run the business and take on new opportunities.

Learn more: Read “What is invoice factoring?

a) How does invoice factoring work?

Invoice factoring is simple to use and can be implemented by most small businesses. Most transactions are funded in two instalments, though this varies by industry.

Transactions work as follows:

  1. Submit invoice to factor for processing
  2. Factor advances 80% – 95%
  3. Your clients pays the invoice on the usual terms
  4. Factoring company deposits 5% – 20% (less the fee)

Note that some companies in transportation may qualify for single instalment transactions. To learn more about transaction structure, read “How Does Invoice Factoring Work?

b) Low costs

The average factoring rate goes from 1.5% to 3.5% per 30 days. Your volume and transaction risk profile determine this. Rates can be pre rated.

Fill out this form for more information, or call (877) 300 3258 to speak with an expert.

c) High advances

We can provide high factoring advances from 80% to 95%. The advance varies by industry and transaction risk profile. Companies in transportation and staffing can qualify for higher advances that start at 90%.

d) Benefits

Factoring offers several benefits to small companies. These include the following:

  1. Improves cash flow quickly
  2. Enables you to offer net-30 terns
  3. Grows with your business
  4. Simple qualification

e) Industries

We can work with companies in most industries. Many of our clients in Alberta are in the transportation and Oilfield services industries. We offer specialised services to companies in those industries and have worked with companies in:

  1. Oilfield services
  2. Oilfield transportation
  3. Pipeline maintenance

Service: Purchase Order Financing

Purchase order financing helps product resellers cover the supplier cost associated with a large purchase order. The finance company pays the supplier directly, enabling you to fulfil the order and book the revenue.

To learn more, read “What is purchase order financing?

a) How does purchase order financing work?

The finance company evaluates the purchase order to ensure it meets the criteria for funding. If approved, the finance company handles the supplier payment directly.

Foreign suppliers that need a pre-payment are paid using a Letter of Credit (LC). Suppliers in Canada or the USA that qualify can be paid by wire transfer. Otherwise, they can be paid with an LC. Transactions work as follows:

  1. Finance company pays supplier
  2. Supplier delivers goods to end client
  3. End client received invoice
  4. Transaction settles

Transactions have two ways of settling. They can settle through a factoring line, if needed. Alternatively, they can settle once the end customer pays for the goods.

Learn more, read “How does PO financing work?

b) Qualification criteria

Purchase order financing is available to small and midsize companies. Qualification requirements include:

  1. Must be a product reseller
  2. Must have sold the product before
  3. Profit margins over 20%
  4. Minimum order of $100,000

Note that purchase order financing cannot be used to finance companies that manufacture goods. These companies should consider supplier financing instead.

Choosing a factoring company

Working with the best factoring company is essential to the success of your business. Evaluate each company carefully to ensure you choose the right provider for your business. Consider asking the following questions as part of your due diligence:

1. How long have they been in business?

You will usually be better off working with a factoring company that has been around for at least a few years. Longevity shows that they can manage a client portfolio during different economic environments.

2. Do they know your industry well?

The majority of factoring companies can finance clients in most industries. Alberta has a heavy concentration of companies in the Oil and Gas industry, as well as transportation. Companies. These two industries require some specialisation. You will be better off with a factoring company familiar with your industry and its nuances. They should also be able to provide you with better terms.

3. Are their terms competitive?

Evaluate your factoring company’s rates, advances, and contract terms carefully. Ensure that they support your business model. You don’t want a factoring program that has outlived its usefulness, so enquire about short-term contracts.

Essential Reading

We want to help you make an educated decision about our programs and how they work. Commercial Capital keeps a learning center with useful articles. These include:

  1. How to offer net-30 terms
  2. How to finance a business in Canada
  3. What is supplier financing?