Invoice Factoring in Minnesota


Minnesota Invoice Factoring

Minnesota is a state with a very diverse industry base ranging from banking and finance to agriculture and manufacturing. While the majority of businesses center on the Twin Cities (Minneapolis/St. Paul) there are small businesses located throughout the state. The state provides a great environment for commerce. In fact, it was ranked #1 for best states for Business by financial media company CNBC in 2015.1

In CNBC’s study, Minnesota received fantastic marks for education and quality of life. But for cost of doing business, the state was below average, ranking in 35th place. Access to capital was only slightly better, coming in at 23rd.

Access to capital and cost of doing business are two of the most important factors for small businesses. One issue that sabotages many startups and small businesses is insufficient access to net working capital. In fact, most small businesses fail because of cash flow constraints.

Startups lack the operating history that many traditional lenders (such as merchant banks) require for affordable funding. Consequently, many rely on very expensive options such as merchant cash advances.

Instead of paying lofty interest rates to a merchant cash advance company or losing equity ownership in your company to a private equity source, consider invoice factoring, also known as accounts receivable factoring.

Factoring basically works this way-you submit your invoices to the factoring companies, not the customer. The invoice factoring company then makes sure the customers receive them.  Your small business then gets an advance on the invoiced amount once the factor has received the invoice (always be sure and check your contract because some factors will not accept copies of invoices, only originals).

The funding typically occurs within 24 hours and can even be deposited into a fuel card account. The transaction provides near immediate funding without incurring additional debt (since the transaction is technically an asset sale, not a loan). Minnesota invoice factoring may be your solution.

Major Invoice Factoring Industries in Minnesota:

  • Manufacturing
  • Food and Agriculture
  • Energy (Oil and Gas)
  • Health Care/Life Sciences

Minnesota is one of the largest agricultural producers in the country. As such, the food distribution and transportation services are vital. Considering Minnesota’s location in the Midwest, there is a considerable amount of trucking commerce on its roads. The manufacturing of packaging material is also provides significant economic activity in Minnesota.

Finally, Minnesota’s proximity to different shale rich areas of North America offer opportunity for a number of oilfield servicers. Unfortunately, their customers finances sometimes ebb and flow with the price of the underlying commodity so they don’t always pay quickly. Many servicers decide to turn their outstanding invoices into immediate cash through invoice factoring.

Invoice Factoring Companies in Minnesota

In Minnesota, a number of companies have emerged to meet the needs of small businesses having trouble accessing traditional financing. Many have immediate needs such as making payroll. To meet the cash flow needs of these companies, a number of invoice factoring companies, known as ‘factors’, are available to help businesses who have been turned down by banks. Below are some accounts receivable factoring companies with headquarters in Minnesota:

  • TCI Business Capital (Burnsville)
  • Commonwealth Capital (Bloomington, trucking, staffing)
  • Concept Financial Group (Blaine)
  • Great Plains Transportations Services (Fairmont, trucking, freight factoring)
  • Greenbridge Finance (Minneapolis- Colfax Ave.)
  • Marquette Commercial Finance (Bloomington, ABL)
  • MB Business Capital (Minneapolis)
  • Spectrum Commercial Services (Bloomington)
  • Transportation Funding Group (Brooklyn Park)

There are other factors with operations in Minnesota including Fleet One Factoring, Fundbox, Bluevine and Riviera Finance. When researching a factor, look for a dedicated account manager, online reporting and 24/7 customer support. In addition, the factoring company should have sufficient financial resources to offer invoice financing options such as asset based lending. Revolving lines of credit are facilities that typically commence after a history of factoring invoices with the company.

Some Minnesota factoring companies focus on the trucking industry, providing freight factoring services to owner operated companies. A few are members of prominent commercial associations including the Minnesota Trucking Association, Truckload Carriers Association, Minnesota Transport Services Association and the American Trucking Association. In addition to these associations, they should also members of the IFA, the International Factoring Association.

Additionally, you’d like to see factors have an affiliation with the Truck Writers Association.2 This may allow customers access to small business services including trucking insurance, claim services and owner operator networks.

If your small business funding is continually turned down for a bank loan or because of bad credit consider factoring receivables today.