To deliver innovative working capital solutions, through a modified factoring program.
To offer a flexible source of funding that provides available capital for growing or transitioning businesses, in various industries, often as a bridge to conventional bank financing.
Zions Bank, a division of ZB, N.A., through its affiliate division, Amegy Bank Business Credit (ABBC), is a leading provider of working capital finance throughout the U.S. The Business Credit Division of Zions Bank has offices located in Arizona, California, Colorado, Nevada, Oregon, Texas, Utah and Washington with experienced relationship managers who serve businesses nationwide.
Since 1998, The Business Credit Division of Zions Bank has operated as one of the largest business credit companies in the U.S., and has the ability to fund transactions up to $50MM. Our management team represents over 100 years of combined credit experience in the accounts receivable financing sector.
The Business Credit Division of Zions Bank is respected for its stability, strong client relationships, and high levels of customer satisfaction. We deliver a simple and easy cash flow vehicle to enhance your ability to obtain working capital financing.
What is Factoring
Factoring is working capital financing provided through the discounted purchase of qualified accounts receivable, typically offered to rapidly growing companies or businesses in financial transition. The factor purchases eligible invoices from a completed service or accepted product and essentially transfers the credit risk from the client to the client's customer.
How does the process work?
- Invoice issued by client to customer
- Invoice is sold to ABBC
- Cash is used by client for growth, payroll, and/or other expenses
- Invoice pays through client's lockbox
- ABBC receives payment
- Client receives reserve amount less fees
What if I'm already factoring?
Great, so you understand the product and basic process. Would you be interested in hearing how we may be able to offer you a better structure and price with a bank managed factoring facility?
Isn't factoring expensive?
It certainly can be more expensive than traditional bank financing but for the additional flexibility, frequently it is a trade-off that many companies are willing to make. Plus, it is viewed as bridge financing, a 6-36 month solution on average.
What if I already have an existing line of credit?
If you have an existing line of credit and you are happy with the structure and line amount, you should not look at making a change.
What if I don't want my customers to know that I'm factoring?
Much of our contact is transparent to the customer. We will need to have invoice payments sent to a Zions Bank lockbox and notification is made to the customer, usually the AP department, regarding the payment redirect. We also verify a certain percentage of outstanding invoices. This can be done via portal, email, or phone call. Every situation is different. Plus, having a Bank managed working capital facility gives a business credibility with its customers.
What if I don't want to send my checks to a lockbox?
Our customers actually prefer using our lockbox as we handle their invoice collection paperwork and all the information is available online wherever/whenever they need to see it.
Companies and Industries Serviced
- Service companies
- Wholesalers / Distributors
- Government contractors
At Zions Bank, we recognize that business challenges sometimes create non-traditional banking needs. In these situations, a more aggressive source of working capital financing may be the answer but also may be difficult to find. We look at the following challenges as opportunities to explore creative funding solutions for our customers and prospects:
- Newly formed, early stage
- New large orders
- Owners with limited net worth and/or damaged credit
- High debt or inadequate company net worth
- Leveraged or management buyouts
- Turnaround or restructure
- Unhappy with existing factoring or asset based lending relationship
- Payroll tax issues or liens
- Bankruptcy (DIP)
- Non-compliance with required loan covenants
- Inadequate existing revolving loan facility
- Loan facilities anticipating decline
- Inadequate advance rate
The Zions Bank Business Credit Advantage
- More than 100 years of combined business credit experience
- Utah and Idaho based institution, through the business credit division, providing same day funding for qualified clients
- Unlike independent Business Credit providers, your funds are federally insured
- Our low cost of capital allows for competitive client pricing
- Flexible program compared to big bank structures
- Advance rates up to 95% of the invoice amount
- No exit fees with 60 day notice and no long-term commitments
- Bridge financing that potentially leads to a traditional bank facility
Learn more about how the Zions Bank Business Credit division has provided credit financing to various industries across the country.
Success Story 1
The subject is a government contracting company, specializing in cyber security solutions and training for the Department of Defense. Due to their emphasis on R&D, they had several years of losses and negative equity.
Advance Rate: 90%
Term: No term, 60 day notice to terminate
Most of the company's funding came from private investors, but they were in need of a working capital solution flexible enough to accommodate their growth. Zions was able to provide a substantial factoring line, encouraging the company to move all of their accounts to the Bank. In March of 2016 the company asked to terminate their relationship in order to move to another alternative lender promising to offer a $1MM LOC over and above their factoring line. Once it came time to sign with the other financing company, they asked to return because the terms of the relationship were not what they had been promised. As of May, the company renewed their relationship with the Bank.
The company will utilize the factoring facility until they qualify for a more substantial conventional line, which is estimated to be in 12-18 months.
Success Story 2
Utah Business Banker identified a company that did not qualify for a traditional bank or SBA line of credit due to the amount of derogatory credit that was reported on the two active owners and a passive investor who would not guarantee the facility.
Advance Rate: 80%
Term: No term, 60 day notice to terminate
Personal Guarantees: Only active owners over 20%, passive investor of 25% waived
The company is rapidly growing and needed assistance with cash flow. The company, while profitable in 2015, lost a small amount each year in 2014 and 2013, as they started operations. They also have concentrations with a few customers who require Net 60 day terms and where payment is 90 to 120 days after the advertisement is placed. Longer terms and slow payment were impairing cash flow and hindering growth.
The new facility will accommodate these extended terms and the company will use added availability to acquire additional projects.
The company currently has their main operating accounts at another bank. With the factoring facility in place, they will move all accounts to Zions Bank.
- The capacity to fund transactions up to $50MM*
- A unique combination of business credit services and commercial banking creating an advantage with competitive pricing and relationship based bankers
- Over 100 years of combined business credit experience
- Financing a variety of business types as well as unique, non-traditional situations
- No long term contracts
- Ability to strengthen your customer relationships
- Opportunity for our correspondent bank partners to participate in the client relationship and fee income
*Loans subject to credit approval. Terms and conditions apply.
The following forms are available online:
For Conventional Working Capital Financing and to start the cash flow process, feel free to contact us.