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British Columbia: Factoring and PO Financing

Commercial Capital is a leading provider of factoring and purchase order financing in British Columbia. Our programs help small companies cover operational expenses and provide a platform for growth.

We have:

  1. Two decades of experience
  2. Simple qualification requirements
  3. Competitive rates
  4. The ability to get you funded quickly
  5. Expertise in many industries

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

Please select a product:

Factoring Invoices

Factoring Invoices

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 Bill Factoring

Freight Bill 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

Invoice factoring allows you to finance your accounts receivable. It provides immediate funds that your company can use to pay employees, suppliers, and other business expenses.

The program has simple qualification criteria and is available to small companies and startups. Please read “What is factoring?” to learn more.

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

a) Transaction Structure

Factoring is simple to use and works well with most businesses. Most transactions are financed in two instalments. However, transactions in transportation and staffing often qualify for single-instalment funding.

Transactions follow these steps:

  1. Submit invoice to factoring company
  2. Factoring company processes invoice
  3. Factoring company advances 80% – 95% into your account
  4. Your client pays the invoice 30 – 60 days later
  5. Factoring deposits remaining 5% – 20% (less fees)

Please read “How does invoice factoring work?” to learn more.

b) High advances and competitive rates

An effective factoring program should combine high advances with competitive costs. Our plans offer high advances from 80% – 95%. Advances are determined by your industry, volume, and transaction risk.

We offer competitive factoring rates from 1.5% – 2.5% per 30 days. Rates can be prorated and depend on your volume, industry, and transaction details.

c) Clear benefits

Factoring offers clear benefits over other financing solutions of comparable size. These include:

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

d) Simple qualification

One important advantage of invoice factoring is that it has simple qualification criteria. It’s easier to obtain than other solutions and is available to small businesses. To qualify, your company must meet the following requirements:

  1. Established federal or provincial company
  2. Creditworthy clients
  3. Unencumbered invoices (e.g., no PPSA)

e) Choosing the right factoring company

The factoring industry is competitive, and several companies provide factoring in British Columbia. Choosing the right factoring company is important to the success of your business. Consider asking the following questions during your evaluation:

1. How long has the company been in business?

You will usually be better off with a factoring company that has been in business for a few years. Longevity shows that they can manage a client portfolio in different economic environments.

2. Do they work in your industry?

Most factoring companies don’t have an industry specialty. They can finance businesses in most industries as long as they have good invoicing practises and creditworthy clients. However, some companies specialise in an industry, such as transportation or staffing.

Your company will usually be better off working with a factor that is familiar with your industry. They will often be familiar with industry nuances and offer better terms.

3. Do they offer competitive terms?

An effective factoring program should combine high advances, competitive rates, and flexible terms. This will ensure that you stay with a program that has outlived its usefulness.

Solution: Purchase Order Financing

Purchase order funding helps companies that have a large order and need funds to pay supplier expenses. This enables the company to fulfill the order and book the revenue.

This solution is intended for companies that re-sell goods at a markup. Manufacturing companies should consider supplier financing instead.

Read “What is purchase order financing?” to learn more.

a) Transaction structure

The first step is to submit the transaction to the finance company to ensure it meets the criteria for funding. Transactions that qualify follow these steps:

  1. Finance company handles supplier payment
  2. Supplier manufactures/delivers product
  3. End-customer received the product
  4. Transaction settles

Foreign suppliers that require a pre-payment are paid using a Letter of Credit (LC). Suppliers in Canada or the USA that need a pre-payment may be paid by wire if they meet the funder’s criteria. Otherwise, they can be paid with an LC.

Transactions settle through a factoring line if you have one. Alternatively, they can settle direct with the PO financing company when your end customer pays their invoice.

Read “How does purchase order funding work?” to learn more.

b) Qualification criteria

Purchase order funding is available to small and midsize companies. To qualify, your company must:

  1. Be a product reseller
  2. Have sold the product before
  3. Have profit margins over 20%
  4. Have an order over $100,000
  5. No be a direct manufacturing company

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

Essential reading

We want to help you make an educated decision about using factoring or purchase order financing. Commercial Capital keeps a learning centre with detailed explanations about our solutions. Popular articles include:

  1. How to finance a Canadian business
  2. Is Factoring Right for My Business?
  3. What is Supplier Financing?
  4. How to offer early payment discounts

Locations

We can finance companies in any city in the province, including the major metro areas of:

  1. Vancouver
  2. Surrey
  3. Victoria