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Your Asset Based Lending, Equipment Leasing, Factoring, Purchase Order Financing, Business Loans questions answered

Frequently Asked Questions


General


What kind of financial services does Able Business Credit provide?

Able Business Credit provides a wide array of financing options in almost any industry that can require financing. Our more popular services include; factoring, asset based financing, purchase order financing, business loans, and equipment leasing.

Why should I choose Able Business Credit?

Our dedicated team strives to help businesses get the financial support they need to not only survive, but continue to grow. We take pride in making sure we do whatever we can to get you the money that you need for your business.

How do I get started?

You can do one of the following:

  1. Fill out the quick quote and get a response from one of our agents.
  2. If you are familiar with the services we provide, you can fill out the application form so that we can get back to you on a decision as quickly as possible.
  3. You can give us a call at our toll free number 1-855-800-5525.
  4. Use our live chat feature to ask a quick question if you have one.
  5. Send us an email about any inquiries to info@ablebusinesscredit.com.

Factoring


What is factoring?

Factoring is the sale of your accounts receivables at a discount in exchange for money up front. While outstanding balances can often restrict cash flow, we forward up to 95% of the invoice value immediately so that you can have working capital.

Why does Factoring Have a Bad Reputation?

Factoring is a relatively new concept in North America; people think that factoring is only for businesses that are in financial trouble. While there are instances where this is true, factoring is best served for businesses who are going through a large growth spurt or deal with payment terms that do not align. Click Here for more information.

How does factoring work?

  1. You send a copy of the invoice to your customer and to us.
  2. We get you funding for up to 95% of the invoice amount.
  3. We let your customers know that invoices are to be paid out to us now.
  4. We collect 100% of that invoice.
  5. We then return the remaining percent of the invoice minus fees.

Are my customers going to be responsive knowing that their invoices are no longer being paid to my business?

Every business is different, with that being said; from experience, most businesses to not have a problem with this process because they are familiar with it or have used it in the past. They still receive the same product at the same price, and they often understand the financial burden that outstanding balances can create.

What if I don’t want my customers to know that I am factoring?

There is an alternative method called non-notification factoring. It is essentially completed in the same way but obviously the collection process is more closely monitored to ensure payments are made.

What does factoring do for my business?

Factoring keeps your business liquid. It not only allows you to make payments on your outstanding balances, it gives you the financial opportunity to take on an increased amount of sales.

What happens if my customer does not pay the invoice?

Factoring is a type of recourse financing. If your customer is unwilling to pay the invoice or returning the product, you are responsible to return the amount that was funded for this specific invoice.

How are my customers supposed to know they are to remit payments to the factoring company?

Your customer will be contacted by a letter and informed that payments are to be made to the factoring company. Invoices that still have not been paid will be resent with a notification that the invoice is now paid to the factor.

Do I have to sell all of my receivables?

Part of the custom tailored program, you can choose the invoices you would like to finance. As long as your customers have a good credit standing, it doesn’t matter which invoices you want to finance.

Asset Based Lending


What is asset based lending?

Asset based lending is the financing of a secured asset. Whether it is inventory, accounts receivables, equipment, machinery, or even real estate; the asset is secured in exchange for working capital.

What is the main difference between traditional lending and asset based lending?

With banks and other commercial lenders, they will look first at cash flow and then collateral. With asset based lending the collateral is looked at first by underwriters.

What can make asset based lending better then traditional lending?

Depending on the structure of your company, asset based lending can be much easier to obtain. With traditional lending being strongly based on cash flow, companies who have asset-rich businesses have an opportunity to get more working capital in exchange of collateral.

Why does asset-based lending work for my business?

Asset based lending is a timely and reliable source of capital which helps pay off existing expenses as well as taking on additional orders. Not only are we able to help you financially, but we monitor and manage your account which allows us to offer our insight on ways you may be able to better manage your business.

What are the criteria for getting approved?

Most of our deals are above the 1 million dollar mark, stretching to about 15 million. These deals require a fair bit of due diligence on our part since the risk involved tends to be much greater. Most of the businesses that do get approved only need temporary financing for growth or unexpected changes as they tend to be financially prosperous.

Purchase Order Financing


What is purchase order financing?

Purchase order financing is the financing of finished goods to YOU the business. As long as you have orders from credit worthy customers, we can get you financing so that you can produce these orders. The main reason why businesses use this method is that they see an unexpected increase in sales that outweigh their current working capital.

How does it work?

  1. You receive an invoice from your customer.
  2. Then an order is put out to the supplier with an invoice coming back.
  3. When the goods are shipped, the invoice is paid to the supplier.
  4. The finished product is then shipped to the customer.
  5. You send invoice to customer and to funder.
  6. Funder receives payment from the customer.
  7. After they have received payment, they return the margin minus the fees.

What makes purchase order financing effective?

Business is business. Increasing the volume of sales not only creates stronger finances; it allows you the business owner to build stronger relationships with your customers. Purchase order financing is particularly effective for businesses that have to stock orders for large seasonal spikes. If you have orders from your customers but don’t have the capital to push the order through, then give us a call and our agents we’ll do what they can to help you.

What if the supplier wants money up front?

Here at Able Business Credit we will find you a line of credit as long as the supplier can fulfil the guidelines that are issued by us.

Equipment Leasing


Why would I want to lease equipment?

Leasing machinery and equipment can be a very effective way to manage your assets over a long period of time. Rather then purchasing the equipment upfront, equipment leasing allows you to make term payments that would be much less strenuous over a long period of time.

What happens to the equipment when the lease is over?

Once the equipment has finished its lease, it can be bought out from anywhere between 5-10% of the original value or can be returned to the funding company. For businesses that rely on having the most up-to-date technology, leasing allows you to switch equipment more frequently and maintaining similar payments on a monthly basis.

What kind of equipment can I lease?

Equipment is a very broad term and covers almost any workplace tool that can be considered an asset. We focus more on leasing machinery which can run up into the millions for industries like manufacturing or construction.

Business Loans


What is a business loan?

A business loan is basically the lending of working capital to a business in exchange for payments over a period of time plus interest. These loans can be used to be re-invested in the company or payoff any overdue balances.

What happens if I am unable to pay back the loan?

If for some unforeseen reason you are unable to pay back the loan, payment will be made in the form of collateral. The remaining value will be paid back in assets and will be further discussed in the agreement you make with the lender.