Monthly Archives: April 2020

business-financing

Fast Funding for Your Business: Comparing Financing Solutions

Across the business landscape, time is of the essence. Yet while transactions are moving faster to meet the needs of clients, the one thing that seems to take much longer is approval for financing. Fast funding is almost an oxymoron in the financing arena. However, the approval rates and availability of funds do vary greatly between major financing solutions, so we’re going to take a look at the most popular forms of businesses financing and break them down for you.

Business Loans

Business loans can be used for a wide range of purposes, such as equipment, commercial real estate, and more. Business loans work exactly as you’d expect in that entrepreneurs put up collateral and take on debt in order to get the financing they need. What is rarely discussed is that interest rates on business loans can fluctuate with the mandates of the Federal Reserve, and the requirements for borrowers have been steadily increasing for the past decade, making traditional loans less accessible to small business owners. Additionally, business loans use a “chain of command” process, by which loan applications are passed from department to department, often resulting in delays. In terms of fast funding, traditional loans come in with closing that can take several weeks.

Merchant Cash Advances

In comparison to traditional business loans, merchant cash advances can be arranged in a much shorter period of time. Merchant cash advances offer discretionary capital which is provided against future sales. Merchant cash advances are structured around the sales history of a business, which can put newer or smaller organizations at a disadvantage. Merchant Cash Advances also come with hidden fees, and because most of the risk is assumed by the lender, the interest rates are much higher than even traditional business loans. While merchant cash advances provide fast funding compared to traditional lending channels, businesses usually have to wait 10 days or longer to get access to funds.

Factoring Offers Fast Funding

When businesses need fast funding, factoring offers a solution. Factoring provides capital in exchange for unpaid receivables, and funds are made available within a single day. One of the biggest reasons businesses seek additional financing is because revenue is tied up in unpaid invoices with staggered schedules, and factoring unlocks that revenue. Factoring is not a loan, so there is no debt, and businesses get to preserve their credit ratings.

New Century Financial provides fast funding by offering the most complete and comprehensive factoring services for businesses. We make funds available within 24 hours, and we let businesses control which invoices or parts of invoices are factored. There are no long-term contracts and no hidden fees. Contact New Century Financial today and get the funding you need, when you need it.

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Sustainable Financing for Small Businesses

Small businesses are looking for sustainable financing. Sustainable financing is a solution that is reusable, does not impact credit ratings, and does not place debt on the books. Many people think such a thing does not exist, but the truth is that sustainable financing is very easy to find, and it is available to businesses in almost every industry.

Not All Financing is Sustainable

Business owners understand that traditional loans are not sustainable. After all, traditional loans are single-use, require collateral, lower business credit ratings, and put debt on the balance sheet. While alternative lending products exist, not all feature sustainable financing. Merchant cash advances, for example, are marketed to businesses as offering debt-free financing. While this is true, merchant cash advances also come with hidden fees and high interest rates, making them nearly impossible to repay in-full before the terms of the agreement have come to a close. This leaves businesses with large balloon payments. Other alternative lending products have similar structures, and it is wise for business owners to thoroughly research the fine print before applying for funding that can adversely affect finances.

Sustainable Financing Exists

For a sustainable financing solution, businesses use factoring services. Factoring is not a loan, therefore businesses can preserve credit ratings and avoid taking on necessary debt. Factoring is reusable. So long as there are unpaid invoices, businesses can use factoring to turn those invoices to immediate cash in as little as 24 hours. Unlike merchant cash advances, factoring has no hidden fees or high interest rates. Factoring services are used by businesses across all industries to boost cash flow and maintain a reserve of working capital. Also, by using factoring services and building capital reserves, businesses can reduce the need for other forms of financing to cover expenses and roll out plans for growth.

At New Century Financial, we provide sustainable financing solutions to businesses throughout the United States. We offer the most comprehensive factoring services with no long-term contracts or hidden fees. If you want fast access to working capital without debt, contact the team at New Century Financial today.

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Preventing Gaps in Business Finances

When businesses experience short-term gaps in finances, the effects can be felt for a long time. Gaps in business finances can take a number of forms. Productivity slows because the capital is not available to cover materials and supplies needed to fill customer orders. Payroll may get delayed. Existing loan payments and other liability may not be covered because the capital necessary is locked up in receivables that clients have yet to pay. Strong cash flow is the key to preventing gaps in business finances, regardless of the economic climate.

Receivables and Business Finances

Outside of point-of-sale operations, businesses issue invoices with payment schedules of 30 days or longer. Payment schedules are a standard business practice, but they create gaps in business finances. A business that makes a sale on any given day will have to wait up to a month or more before seeing revenue from that particular transaction. During that month, businesses still need to make payroll, cover production and delivery of client requests, run advertisements, and pay regular expenses. During the waiting period on receivables, businesses can experience more money going out than coming in, which can place any organization in dire straits.

Closing the Gap

One way to remove gaps in business finances is to use factoring services. Instead of waiting a month or more for payments from clients, factoring can turn unpaid invoices into cash and make funds available within 24 hours. Factoring services are debt-free, and allow businesses to not only cover expenses and make payroll, but to also build up capital for growth during economic upswings or to thrive during downturns. Factoring is a perfect fit for any business that issues invoices with staggered payment schedules so they can maintain a strong cash flow.

Eliminate Gaps in Business Finances Today

New Century Financial is a leader in factoring services. We convert unpaid receivables to cash quickly, and let businesses choose which invoices or parts of invoices we factor. We do not lock clients into long-term contracts, and there are no hidden fees. If you want to eliminate gaps in business finances, contact the team at New Century Financial today.

Maintaining Cash Flow Amid COVID-19 Concerns

Businesses throughout the United States have been impacted by COVID-19. From service companies to staffing agencies, manufacturers to logistics companies, all sectors have been affected. In order to weather the current condition, it is of the utmost importance that businesses maintain a strong cash flow.

How COVID-19 Impacts Cash Flow

As cities place restrictions on which businesses can remain open, limiting hours of operation, and more, business owners need a way to access revenue quickly. There is no doubt that some invoices will age out to collections. Restricting operations will restrict cash flow, but there is no reason why businesses should have to wait 30 days or longer to get paid for sales made prior to the outbreak. After all, businesses still need to pay bills, make payroll, and formulate a strategy to make it through this bout of COVID-19 so they can resume operations once this is all over. Businesses that can speed up cash flow now can build up working capital to offset the disruption caused by COVID-19 and the measures being taken to limit its impact.

Fast Access to Revenue

In order to unlock the capital tied up in unpaid invoices, businesses are turning to accounts receivable factoring. Factoring converts all unpaid receivables to cash, which is made available within 24 hours. This allows businesses to get immediate access to capital in order to cover expenses, make payroll, and make plans so they can successfully come out of the COVID-19 epidemic and continue operations in the future. Unlike business loans, accounts receivable factoring does not place any debt on the books, so businesses get to preserve their credit ratings and collateral, without worrying about interest rate fluctuations from the Federal Reserve. Almost any business that issues invoices with payment schedules of 30, 60, or even 90s days can access factoring services.

At New Century Financial we provide comprehensive accounts receivable factoring services nationwide. If you want fast access to money from outstanding invoices so your business can make it through the restrictions imposed by COVID-19, contact the experts at New Century Financial today.