Monthly Archives: May 2020

cash-flow

Accelerating the Rate of Cash Flow for Your Business

We live and work in a data-driven economy where business transactions take place in the blink of an eye. Yet despite the rate at which we do business, companies in every industry are experiencing sluggish cash flow due to staggered payment schedules. Fortunately, there is a solution to accelerate the rate of cash flow for your business.

Payment Schedules and Cash Flow

As technology gets better, the rate at which we do business gets faster. However, some standard business practices remain the same. Wall Street and major banks operate on the same schedules, and businesses still issue invoices with staggered payment schedules. These schedules are designed to benefit both businesses and their clients. When businesses issue invoices with payment schedules of 30, 60, or even 90 days, clients get a grace period in which to gather the capital necessary to pay off the balance. For businesses, staggered payment schedules are supposed to create a constant flow of revenue. In reality, staggered payment schedules can create cash flow issues and even long gaps without any revenue, especially for new and small businesses. Even if a business is waiting a month or more to receive payments from clients, it still has to pay employees and cover overhead expenses. Short-term loans are not the best solutions because adding debt to the balance sheet can further impact finances, especially if lag in customer payments is a recurring issue.

Eliminate the Wait

While standard business practices are not going to change anytime soon, there is a way to boost cash flow and accelerate the rate at which revenue comes into your company. Accounts receivable factoring allows businesses to leverage unpaid client invoices for cash. This boosts cash flow for businesses and reduces the need for short-term loans. As a matter of fact, accounts receivable factoring is not a loan at all, so businesses can avoid debt and preserve their credit ratings. Why wait on staggered payment schedules when you can use factoring to turn your receivables into cash and access funds within 24 hours? New Century Financial provides businesses across all industries with factoring services to boost their cash flow and ensure long-term success. Contact our offices today to accelerate your cash flow.

factoring

Why Factoring Makes Sense for Businesses during Every Economic Climate

There are many reasons businesses use factoring services. Some want to catch up on accounting and get revenue from unpaid client invoices. Others need short-term working capital to cover expenses or take advantage of time-sensitive business opportunities. Still other businesses use factoring to build up reserves for growth projects. No matter the reasons, businesses have found that factoring is a sensible and stable form of financing whether the economy is booming, stagnant, or in a downturn.

Loans Are Unpredictable

For the past decade or so, businesses have been pivoting away from traditional loans. The requirements set by lenders keep increasing, which makes much-needed financing inaccessible to small businesses that might not have the collateral, credit ratings, or established sales history to qualify for loans. Additionally, interest rates on traditional business loans are subject to change. In 2017 and 2018, the Federal Reserve raised interest rates multiple times, placing a strain on finances for business owners everywhere. In a strong economy, increased interest rates and high requirements can prevent businesses from growing to their full potential. In an economic downturn, loans, interest, and debt can force businesses to declare bankruptcy.

Factoring Offers Secure Financing

In contrast to traditional loans, factoring remains steady in all economic conditions. The main reason for this is that factoring is structured around receivables. Receivables are hard assets with a verifiable value. Clients purchase goods and services and invoices are generated. Factoring converts those receivables into cash. The process is not a loan, so businesses do not have to worry about putting up collateral, taking on debt, or varying interest rates. In a strong economic climate, factoring allows businesses to boost cash flow, quickly build up reserves for growth, During a downturn, factoring provides fast access to working capital to cover overhead and keep operation moving.

At New Century Financial, we offer factoring services for your receivables. Whether you need working capital or if you want to ensure a strong cash flow for your business, we can help. Our factoring services put you in control of which invoices or parts of invoices get factored. If you want a financing solution that is stable and reliable in all economic conditions, contact New Century Financial today and ask about our accounts receivable factoring solutions.

loan-forgiveness

Understanding Debt Risk, Loan Forgiveness, and Business Financing

Businesses all over the United States are seeking financing to keep operations running and weather uncertain conditions amid a pandemic. Since April, business owners have seen stimulus packages and relief loans promising loan forgiveness and minimized risk to borrowers. But what exactly do these things mean and how do they impact businesses? Is there such a thing as stable and reliable business financing?

Debt Risk for Businesses

For the past decade or so, traditional lenders have been trying to minimize their risk by shifting it to borrowers. In order to qualify for loans, businesses must meet minimum credit ratings, have enough collateral to put up against the amount of financing requested, and a long financial history. Unfortunately, these requirements marginalize new and small businesses. Even alternatives to traditional debt-based loans, such as merchant cash advances, have very high interest rates to place the majority of the risk with the business borrowing capital. In order for businesses to thrive – even in adverse market conditions – they need financing solutions that minimize their risk and aren’t cost-prohibitive to access.

Loan Forgiveness

Loan forgiveness was introduced with the relief loans created by the CARES Act. In summary, businesses that take out relief loans are eligible for loan forgiveness, provided the funds are used to maintain payroll and benefits. There is a big caveat in these loans which states that if a business needs to lay off workers or reduce payroll, then loan forgiveness will similarly be reduced. So if a business is deemed “non-essential” or loses workers during the pandemic and it is unable to hire replacements, they stand a risk of not getting loan forgiveness. That in itself poses a big risk to businesses, and they need a financing solution that doesn’t hinge on uncertain future events.

Simple and Transparent Business Financing

Accounts receivable factoring offer a stable, reliable, and transparent source of business financing. The process is simple – businesses submit unpaid customer invoices for factoring services, and those receivables are converted to cash and made available within 24 hours. There is no debt, no risk, and no uncertainty, because factoring uses existing receivables. Businesses can maintain a healthy cash flow without worrying about new legislation, fluctuating interest rates, or nebulous caveats.

New Century Financial is a leader in comprehensive factoring services that give businesses more control over which invoices or parts of invoices get factored. We can also finance lines of credit up to $5 million based on receivables. Contact New Century Financial today and get the business financing you need without any of the risk or guesswork.

banks

Can Banks Handle the Needs of Business Owners?

At the end of March, the CARES Act was signed into law, which provided special relief loans to businesses across the United States. Immediately, banks were inundated with loan requests, which severely slowed down the approval process. Additionally, the number of requests greatly overshadowed the amount allocated for relief loans, resulting in a total depletion of funds. This prolonged the anxiety and frustration for business owners nationwide. Even those who were approved for relief loans were kept in a holding pattern because there were no funds to be given to them. Now, with a second round of relief loans in the pipeline, can banks meet the needs of business owners?

Banks and Loans

The relief loans offered by banks were supposed to be at no immediate cost to business owners. Similarly, the major banks in the United States have stated that most of their earnings do not come from debt-based financing. However, during the period that relief loans were available, banks racked up over $10 billion in processing fees for those loans. That means banks increased their earnings even on loans for which they could not provide funds because the well had run dry. There is no hard data on the percentage of businesses that applied for loans, because many were still trying to apply when funds ran out. Likewise, there is no hard data on how many business owners are still waiting for funds after being approved. In essence, during this uncertain time, even banks seem unprepared and business owners need a more reliable source of financing without any risk or potential debt.

Reliable Financing for Business Owners

There is a source of capital available to business owners that isn’t dependent on banks, legislation, or fine print about loan forgiveness that may be reduced over time, leaving businesses with debt on the balance sheet. Many businesses have unpaid receivables that can be leveraged for immediate funds. Instead of waiting a month or longer for clients to make payments on invoices, businesses can sell those receivables and get access to capital within 24 hours through accounts receivable factoring. By using factoring, businesses can receive financing for their outstanding receivables, which allows them to boost their cash flow and maintain a source of working capital as new invoices are generated.

Get the Financing Your Business Needs

At New Century Financial, we offer comprehensive accounts receivable factoring. Factoring is not a loan, so we can get you set up quickly without impacting credit ratings or placing debt on the books. When you send your unpaid invoices to New Century Financial, we will make funds available within 24 hours. New Century Financial is well-capitalized and we are able to fund up to $5 million in lines of credit for businesses. Contact our offices today to get started.