Credit Union and Community Bank Invoice Factoring Program

invoice factoring
As a credit union or community bank you always want to say “Yes” to your valued small business borrowing prospects seeking a line of credit. How can you say “No” and not lose a business client or prospect that does not qualify for traditional bank financing?

For over 25 years, Paragon Financial has worked with state and federally chartered institutions to get their business customers working capital. Financing is through Invoice Factoring, A/R Management, Credit Protection, and Purchase Order Funding Programs. Paragon creates opportunities for banks helping the non-bankable business or under bankable business client.

In the past, there have been small business A/R Funding programs for community banks, but the emphasis was on client acquisition. For those with long memories, the correct focus should have been on risk in all its flavors. That is fraud, proper verification, dilution, and debtor credit risk, to name a few.

At Paragon, we attribute 25 years of successful A/R financing & PO funding to careful risk assessment. We take control (not leaving it to bank personnel) offering our expertise with a historical loss rate of less than ½ of 1%.

Also, Paragon understands how difficult it is to keep or capture the depository relationship with current or potential clients in this low-interest-rate environment. We help you to grow deposits and fee services to customers who you might lose or not capture because they do not meet lending requirements.

Benefits for Your Credit Union or Community Bank

  • Alternate sources of financing instead of just saying  “No” and helps you retain the client for other bank products. You will also have a borrower opportunity when the customer fits your lending criteria in 6-24 months. The factor becomes your de facto “farm system.”
  • The Factor can have an inter-creditor agreement with your institution to “carve-out” and advance against and manage some or all of your borrower’s Accounts Receivable (including SBA 7A).
  • Factors require businesses to keep their existing depository relationship with certain institutions.
  • Participate with us at no credit risk or take a referral fee — your choice.
  • Other factors, like Paragon, allows you to brand our products under your banner but outsource all credit, verification, collection, risk, and back-office functions to Paragon utilizing our 25 years of experience.
  • Design programs with specificity in mind. What industries dominate your local footprint? You can be a leader in that type Invoice Factoring. For example, Paragon has broad experience in funding all levels of Government Receivables and the oil, staffing, broadband, and wine/spirits industries.
  • Our seasoned and professional account managers professionally and cordially manage your client’s A/R.
  • Paragon has a solid balance sheet if you choose to participate with us.
  • We can shoulder credit risk with our portfolio insured against bankruptcy in regards to your customer’s clients (the account debtors).
  • Our programs are great tools to manage NSF’s better and give branch personnel and rainmakers more products to cross-sell.
  • Your workout department receives an experienced partner in Paragon with bankruptcy and DIP financing expertise.
  • Does your Bank have a factoring or ABL Group? Paragon can participate in significant or high concentration deals to help mitigate risk.

Benefits For Your Client from a Credit Union or Community Bank

  • Our credit/collection services can eliminate bad debt for your Customers. They get a “free” credit manager from Paragon.
  • No credit line caps. Line limits based on strong, insurable Accounts Receivable (including SBA 7A).
  • Clients can safely offer credit terms to customers, which will help in growing their business by making it easier for their customers to buy from them.
  • Client A/R is professionally managed with a soft touch.
  • Customer DSO’s are historically less once they become a Paragon client.
  • Client builds balance sheet and credit to the point that they eventually qualify for conventional bank financing from your institution.

Target Client

  • Our niche is Fast Growth, Startups, Turnarounds, Bank Exiting, and Non or Under-Bankable Relationships.
  • Businesses with solid A/R from creditworthy customers are Paragon’s prospect base.
  • Personal credit of the business owner is not an issue; we look at our client’s customer’s ability to pay. Tax liens, client concentration, and other challenging funding situations can be overcome.
  • Our Invoice Factoring, Purchase Order Funding, A/R Management, and Credit Protection programs are perfect for Fast-Growing Clients with B2B or B2G sales of $30,000 – $10,000,000 per month.

An alliance with Paragon allows you to turn turndowns into a systematic lead generation machine. For alliance, branding and referral opportunities, please e-mail Chris Curtin, President, or call 888-400-5931 ext 221.

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