Agricultural Supply Chain Funding with PACA
As a part of being in the agriculture industry, you have worked hard to create, import, or distribute the perishable fruits and vegetables that keep American families healthy. As a backbone of American society, you deserve to have the confidence and comfort of being able to grow your business and take care of your family with consistently available cash in the bank.
At Paragon, we understand that when it comes to perishable goods, how difficult it can be to find a funding source who understands and is willing to work with PACA. With the Perishable Agricultural Commodities Act (PACA) rules, perishable goods have special lien rights and regulations. Understanding and dealing with the PACA rules and how it affects a financing package can be daunting for many lenders. The PACA trust puts most lenders at a disadvantage and creates an unwanted risk to them. Until suppliers of perishable agricultural commodities to a borrower are paid in full, a secured lender’s security interests are overruled by the sellers’ PACA claims.
At Paragon, our team knows how to navigate PACA rules and provide the agriculture industry successful funding packages.
What Are the Benefits of Agricultural Factoring?
- We understand PACA Regulations
- Cash in your hands in as little as 24 hours
- Up to 90% advanced on Your Invoices
- Payroll funding available
- IRS issues and liens can often be a non-factor
- Pre-approve your clients credit
- 23 years servicing the agricultural industry
- Credit protection against bankruptcy through Paragon’s Non-Recourse Factoring
What is PACA?
The Perishable Agricultural Commodities Act (PACA) are rules and regulations that help fresh and frozen fruits and vegetable sellers with vital protections to cover legal disputes as well as financial protections for the produce sellers. Protections include prioritizing payments to sellers if a grocery store files for bankruptcy and dispute resolution should one arise. There are requirements to gain these protections such as being licensed by the USDA.
PACA was specifically designed to help the produce industry protect themselves from middlemen and grocery chains. It has also opened opportunities for sellers to get safe funding to speed up their agriculture receivables collections and to get that important cash in the bank even faster.
The Agricultural Marketing Service is responsible for administering PACA and its related services to the produce industry.
What is Agriculture Factoring?
Agriculture factoring helps to keep market shelves filled with your produce – and more of it. Agriculture receivable factoring provides you with non-recourse funding on your open accounts receivables in record time, giving you the critical working capital immediate you need to run your business. Traditional banks often will often not loan you money, their loan approval process takes an exorbitant about of time or they simply won’t deal with PACA.
For the business owner who uses agricultural factoring from Paragon Financial, they receive fast, affordable funding releasing you from the uncertainty and worry of getting paid. You get the peace of mind that the cash flow will be there to keep your business running smooth. Paragon Financial can help by providing the cash on your accounts receivables produce sales, you can then provide even more high-quality produce to stores – and on that additional round of shipments, Paragon will still be there to get you funded and paid sooner.
Even in one-off cases of spot financing, Paragon Financial can help get you that bridge to cover your payroll funding or order financing cash flow to bridge you into the next sales and receivables cycle.
Let Paragon Financial help you maximize your businesses supply chain and annual sales by accelerating your collection period with its agricultural factoring offers.
Who Can Qualify for Agriculture Factoring?
- Companies along the Supply Chain that Follow PACA Rules and have a USDA License
- Startups, Turndowns, Bank Exiting or underperforming Banking Relationships
- Personal Credit of Owner is not an issue; we look at your customer’s ability to pay
- Businesses looking for Competitive Finance Rates
- Fast Growing Companies with sales of $25,000-$3,000,000 per month
- Paragon can move Quickly on New Client or High Growth Client Approvals