Business financing has seen a number of trends over the past year, including a decrease in interest rate hikes on business loans and an uncertain situation with imported goods and materials used by almost every industry. However, there were a number of positives as well, which makes forecasting the outlook on business financing a mixed bag, depending on where you stand.
First, the Good News
Business financing has been bolstered by two major points. First, consumer confidence is still high, as shown by increased overall purchases in 2019, exceeding 2018’s fourth-quarter results. Additionally, almost every industry experienced growth, with increased production from manufacturers, more clients entering contracts with businesses for physical goods and services, and higher job availability. More businesses are trying to position themselves for growth and more entrepreneurs plan on launching businesses this year.
Uncertainty for the Business Financing Outlook
The current status with tariffs has caused some uncertainty in the retail and freight sectors. While 2018 saw freight demand reach new heights, last year things snapped back to normal, creating the perception of a drop, which caused lenders to tighten credit requirements for certain businesses. 2019 saw fewer hikes in interest rates on business loans, but the unpredictability has business owners wary about taking on new debt. Also, as we start 2020, it is an election year, which causes general speculation and uncertainty for all businesses.
The Safest Plan Moving Forward
Regardless of the positive points and the uncertainty, businesses still need access to capital to thrive and grow. While lenders are tightening credit requirements, taking on debt with business loans may not be the answer. While the market waits for speculation to give way to a clearer picture, businesses can build up capital reserves so they can expand or roll our new projects. One way to do that is through factoring. Factoring allows businesses to speed up cash flow and avoid experiencing gaps in revenue from unpaid client invoices. Factoring is fast and can be tailored to the cash flow needs of businesses so they can be in a strong financial position no matter what happens.
At New Century Financial, we offer comprehensive factoring services without any red tape, hidden fees, or long-term contracts. Factoring helps businesses reduce the need for debt-based loans by providing fast turnaround on invoices. Get an edge on business financing this year with factoring services from New Century Financial. Contact our offices today to get started.