Payost vs. Paragon Financial
If you’re anything like most other storm restoration company owners, you know only too well what it’s like to return from a big job with your working capital exhausted and a 90 to 120 day wait for payment ahead of you. How will you keep the lights on? How will you pay the subcontractors you rely on? How will you conduct vehicle maintenance and equipment upgrades? And where are you going to find money to respond to the next job?
All the above are good questions. Paragon Financial has been around for 25 years and offers invoice factoring. Maybe they can help but let’s take a look and see what the facts say.
What is Paragon Financial and What do They Offer?
Paragon Financial Group has been around for some time and while they offer a variety of financial products for B2B and B2C companies, the one that’s potentially relevant to storm restoration companies is their invoice factoring.
The good news is that the company isn’t particularly harsh when it comes to who is eligible for their invoice factoring service. In fact, even if you have poor credit or have only been in business a short time, they’ll still purchase your qualifying invoices. That’s because they base their model on the likelihood that the utility holding the invoice will pay.
How Does Paragon Financial Work?
Paragon Financial works by purchasing your qualifying invoices and providing you with the cash you need to stay afloat. They’ll consider invoices from any company that has more than $30,000 in monthly revenue and verifiable invoices with utilities or other creditworthy companies.
If they decide to purchase your invoice, they typically advance between 80 to 90% of its value. Paragon features non-recourse factoring though. That means that if the invoices they buy from you go unpaid, they absorb any loss rather than expect you to purchase the non-performing invoices back from them.
Paragon Financial Qualification Requirements
Because the Paragon Financial model focuses on the creditworthiness of the company holding the invoice, the qualifications for companies who want to use the service are simple:
- You have to have at least $30,000 in monthly revenue
- You need to have invoice pending with creditworthy companies
The company also requires that you sign a contract stating you’ll sell them all your qualifying invoices for 1 year. This means if you’re simply looking for someone to pay off your large outstanding invoice from a recent natural disaster, they won’t do it. Unless you also promise to sell them every other invoice you issue during the next year.
Because Paragon Financial isn’t concerned with your credit rating, they won’t do a credit check on you that could damage your credit score. They will, however, purchase your invoices from you and that could produce blowback from the utility. More on that below.
Paragon Financial Application Process
The application process for Paragon Financial isn’t terribly complicated although it’s far more involved than the Payost invoice financing application. With Paragon, you’ll need to open an account with them through their website and then proceed to the application page. There you’ll be asked to supply:
- Your company’s articles of incorporation
- Master customer list for your company
- A sample invoice
- Access to certain parts of your books regarding accounts receivable and payable
Once you complete the application, you’ll be contacted by a company representative. They’ll go over the Paragon terms, conditions, and fees with you. They may also request additional documents and of course, they’ll answer any questions you might have regarding their service.
Paragon Financial Pros and Cons
Storm restoration companies will find that Paragon Financial isn’t without its share of both pros and cons. In some respects, it represents a much better option than that of bank loans or short term lines of credit. On the other hand, there are some aspects of their approach and what they ask of you that should definitely give you pause. Let’s look at those pros and cons now:
Paragon Financial Pros
- They don’t run a credit check
- Their application process is relatively straightforward
- Once they approve, they disburse the money quickly to you
- Their fees aren’t the worst in the industry
- They’ve been around a while and have a basically good reputation
Paragon Financial Cons
- There are a fair number of hidden fees
- They require you sign a 1-year contract
- The application process is more drawn out than Payost
- They have minimum monthly income requirements
- They purchase your unpaid invoices
About that last item: Once Paragon Financial buys your invoice, it’s incumbent upon you to inform the utility of the sale. This will raise questions at the utility about the soundness of your company and may result in you not being called next time around.
Paragon Financial Review
A quick review of Paragon Financial reveals a company that may have something to offer but shouldn’t perhaps be your first choice for advance funding.
Paragon Financial vs. Payost Comparison
What we’ve seen so far about Paragon Financial indicates that they may have something to offer companies in need of an infusion of cash. But that they’re not perhaps the best choice. Payost invoice financing on the other hand is likely just what the financial doctor ordered. If your invoices are being held by utilities, we’ll pay them for you.
Applying is easy. Just go to our “Apply Now” page and enter the following:
- The name of your company
- The name of the utility holding your invoice
- Confirmation that the utility signed off for your work
- The amount due to you
- The date of your next storm restoration work (optional)
“Innovation distinguishes a leader from a follower.” - Steve Jobs
Once you’ve filled out the simple form, submit it and we’ll take care of the rest. Someone will get back to you quickly either via email or phone. They’ll ask a few more questions related to your current situation and that’s it. Once approved, you’ll be provided access to an online dashboard where you can upload your qualifying invoice. Typically, those will be paid in less than 1 business day.
Bottom Line: Should you try Payost?
While Paragon Financial has undoubtedly helped some companies deal with cash flow issues, they’re not necessarily the best choice for storm restoration companies. If you have unpaid invoices being held by utilities or other AAA credit rated companies, don’t waste your time with:
- Invoice factoring
- Lines of credit
- Bank financing
- Or other accounts receivable options
Choose Payost instead and get those invoice paid off now. Remember: we don’t float you a loan—we pay you for the work you did. When the utility finally pays off the invoice, you reimburse us plus a modest fee. That’s it.