Invoice Factoring at Seacoast Bank
Seacoast Bank Quick Information:
- Seacoast Bank Headquarters: Stuart, FL
- In Business Since: 1926
- FDIC Insured: Yes
- Employees: 725
About Seacoast Bank
Floridians are quite familiar with Seacoast Bank. This fast-growing bank, based in beautiful Stuart, Florida (east coast) and is very recognizable with its unique turquoise blue color scheme.
The bank has been expanding rapidly in recent years as Florida is recovering from the financial crisis. In the Central Florida area, Seacoast bought the Central Florida portfolio of BMO Harris, Floridian Bank and BankFirst to expand its reach into downtown Orlando and the surrounding communities of Winter Park, Lake Mary and Apopka. Seacoast also recently entered the Tampa Bay market following other key acquisitions.
The bank serves both consumer and business customers. For consumers, they issue a variety of checking and savings accounts, home mortgages and retirement products. On the commercial side, they have a number of small business funding options available-both traditional (loans and merchant services) and alternative (asset based lending and invoice factoring).
Seacoast Bank Invoice Factoring
Too many businesses must wait for outstanding invoices to be paid before taking on new orders or even making payroll. This lack of cash flow can hamper growth and even put a company out of business.
Seacoast Bank offers its business clients are a number of funding options, including invoice factoring and asset based lending. These are two powerful ways to unlock the liquidity in assets and provide flexible funding options.
Seacoast Bank provides businesses funding against eligible, outstanding invoices with a built-in revolving line of credit. The line of credit is based off a percentage of assets such as accounts receivable or inventory.
This type of funding is crucial especially for businesses that experience major swings in seasonal activity. They also handle the collection duties and provide back office support. This allows your business to focus on business, not be a collection agency!
Seacoast Bank Factoring Industries Served
- Staffing
- Wholesalers
- Manufacturing
- Food and Beverage Distributors
- Telecom
Here’s how it works. Seacoast Bank buys the outstanding invoices at a discount to their face value and provides funding to your business in as little as 24 hours (Seacoast can actually buy the invoices as soon as you bill the customer). Your customer, known as the account debtor, is often notified that a factor is collecting the invoice’s balance due. This takes the pressure off of your relationship with the customer and you can avoid the awkward phone calls regarding non-payment.
Seacoast handles the collection duties from your customer from now on. When the customer does pay the outstanding invoice (directly to Seacoast) returns the remainder they held in reserve, less their factoring fee. Then, the process can begin again the next month, providing a steady stream of cash flow to improve your net working capital.
Seacoast Bank Invoice Factoring Guidelines
- Funding Received: Same Day
- Advance Amount: Up to 95% (balance held in reserve)
- Receivables Factoring and Funding facilities start at $250,000 and up
- Asset Based Credit Facilities start at $1,000,000 and up
They also take care of the credit management responsibilities. Remember, when receiving funding from a factoring transaction it’s not the credit of your business that matters, it’s the credit of your customers who have been invoiced. No one can conduct credit checks as quickly as a bank so this saves you the future hassle of guessing at a new client’s creditworthiness (or learning what it is the hard way).
Seacoast Bank Invoice Factoring Company Review
While the Business Funding division of Seacoast Bank typically deals with middle market companies, companies with revenue of between $1 million and $200 million, they will provide accounts receivables factoring for smaller businesses. They recently provided a janitorial staffing company $250,000 in short term funding.
Staffing companies are typically in need of short term funding since they must wait for payment until after their staffers has worked and been paid. Seacoast also funds a variety of industries that often have short-term cash flow concerns such as oil field services, logistic management and food and beverage distributors.
Of course, they also serve large customers as well-Seacoast Bank provided $20 million in funding for a call center staffing client and $17 million for a temp agency.
Seacoast Bank has a wide range of funding options at their fingertips-which we like. They also conducted purchase order funding for a U.S. manufacturer of security equipment, allowing them to fill two large orders for national retail chains.
Seacoast Bank has Deep Reserves
Seacoast is a subsidiary Seacoast Banking Corporation of Florida, which is a publicly traded company on the NASDAQ (symbol: SBCF). As of year end 2016, Seacoast had the financial backing of $2.8 billion in deposits.3
In addition to its deposit base, Seacoast Bank has access to capital markets funding from its parent company, who takes advantage of the opportunity. Back in February, SBCF issued nearly 2.4 million of company shares to the public at $22.25, raising a little over $52 million for the company.
Many factoring companies offer a free quote to see how much funding your business qualifies for with their factoring facility. You simply enter some quick information (typically the company’s name and average monthly sales). Seacoast Bank’s actual application is a bit longer, including asking for the business’ tax ID number, corporate structure, your last 2 years debt charge-off totals and information on returns and allowances.
For ABL, you will need to provide more details on other assets such as inventory or equipment. These are used as collateral for small business funding and the bank will provide a percentage of their market value (often 50% but that varies from case to case).
On Seacoast’s credit side, we would like to see a little less exposure to the Florida real estate market in Seacoast’s loan portfolio, but we don’t think this would adversely affect their factoring service. In fact, in an economic downturn, as credit dries up the demand for invoice factoring should actually increase. Remember, factoring is not a loan, rather an asset sale so no additional debt is incurred.
Should I be Factoring Receivables with Seacoast Bank?
We do endorse factoring receivables with Seacoast Bank. The nice thing about working with a traditional bank that also offers factoring services is that they can provide more traditional funding options as your business matures. From invoice factoring, you may move onto asset based lending options, then a small business line of credit and eventually a traditional business loan.
Be sure and read the entire contract/factoring agreement which will outline all the fees, terms and conditions. It’s never a bad idea to review this with an attorney. There are sure to be a good amount of fees (it is a bank after all) but you don’t have to worry about the company not being on the up and up (the factoring company may have a spotty reputation).
See how much your business qualifies for today!