Monthly Archives: January 2021

Finding the Right Factoring Solutions for Your Business

When businesses need to smooth out uneven revenue cycles, boost cash flow, or get fast access to capital without taking on debt, factoring is the go-to solution. However, like with all financing products, the factoring industry casts a wide net, and not all factoring solutions are the same. Finding the right factoring solutions for your business has as much to do with your capital needs as it does the specifics of the factor you are using. Businesses should be looking for the following qualities if they want to find the best factoring services.

Look at factoring limits

Some factoring companies have minimum requirements for their clients. Factoring solutions for large companies typically require a base invoice amount to qualify for services. Ideally, you should look for factoring services that have low or no minimum, and no upper limits.

Is there a contract?

Many businesses enter agreements with factoring companies because they need fast access to capital to get over a rough financial patch only to find out they need to enter a long-term contract. The right factor will work with you to understand your needs and create a customized solution. Additionally, it is best to work with a factor that does not require contracts.

Are you in control of your invoices?

Many factoring services boast that they will help automate your cash flow. While this is true, some factoring companies automate any and all invoices once the agreement is signed. Businesses should look for factoring solutions that put entrepreneurs in control of which invoices, or even which parts of invoices get factored.

How soon can you access funds?

The timeframe on when businesses can access funds also varies from factor to factor. Some make funds available after 48 hours. Some can take a week or more. The business world is moving faster every year, which means companies need fast access to cash from their factored invoices. The ideal turnaround time for businesses should be within 24 hours in order to boost cash flow and build up capital reserves.

New Century Financial is a national leader in factoring services. We convert unpaid receivables to cash within 24 hours with no long-term contracts or minimums, and we let our clients choose which invoices or parts of invoices get factored. So comprehensive factoring solutions, contact the team at New Century Financial today.

Priorities for Businesses in 2021

2021 is here, and businesses are hitting the ground running, ready to overcome challenges with renewed hope and strategic thinking. The announcement of COVID-19 vaccines bolstered the marketplace, and businesses are making plans to reopen. However, there is much work to do between now and then, and some of the methods businesses used to adapt during the pandemic are now becoming mainstays as entrepreneurs work toward a more robust future.

E-Commerce is here to stay

Prior to the pandemic, e-commerce was demonstrating year-over-year growth. For obvious reasons, 2020 propelled e-commerce to the forefront. Even businesses that traditionally relied on foot traffic, such as restaurants and live entertainment venues, pivoted to the digital space to deliver products and services to customers. With vaccination and potential recovery peeking over the horizon, businesses are not eager to give up their share of the online marketplace. B2C and B2B companies are maintaining their digital presence because their clients are wary about rushing a “return to normal.” Additionally, e-commerce allows businesses to reach a wider audience and conduct transactions faster than traditional methods.

There is a greater need for working capital

As businesses make plans for the future, the need for working capital is crucial to success. While e-commerce may allow for faster sales, invoices still maintain staggered payment schedules of 30, 60, and 90 days. Even businesses that have gone completely digital still have overhead costs, and growth plans require capital. Businesses that are looking to ramp up their operations to meet the growing demand during and after recovery need to optimize cash flow and build up working capital. Unfortunately, staggered payment schedules on invoices frequently result in gaps in cash flow, and business expenditures overshadowing revenue at recurring points every month.

Making plans a reality for businesses

Boosting revenue and building up capital can be achieved easily, even for businesses that are operating in the digital space. With accounts receivable factoring from New Century Financial, businesses can exchange their unpaid invoices for cash and receive funds within 24 hours. Our factoring services do not have any hidden fees, no long-term contracts, and we give businesses control over which invoices or parts of invoices they want to factor. To get a jump start on 2021 and roll out plans for reopening and growth, contact the team at New Century Financial and ask us about our accounts receivable factoring services.

Making Payroll During Uneven Revenue Cycles

With few exceptions, businesses rely on employees to maintain productivity levels and fill client orders. However, during uneven revenue cycles, making payroll can become a challenge. If sales are high, staggered payment schedules on invoices can still cause gaps in revenue, but employees rely on their paychecks as much as businesses rely on their workers. In a period when people are relying on revenue and paychecks, how can businesses make payroll during uneven revenue cycles?

Uneven Revenue Cycles and COVID-19

If businesses ever experienced cash flow disruption, it has been during the COVID-19 pandemic. State and local restrictions limited many businesses, and their clients were slow with payments on invoices. The CARES Act provided funds to businesses to maintain operations, but gaps in revenue caused some companies to take drastic actions. Some businesses were forced to furlough staff or lower wages, which went against the provisions of the federal relief and recovery loans. Other businesses stayed open, but had to take out additional short-term loans to make payroll while they waited for clients to make payments on open invoices. Businesses needed to find another way to improve cash flow so they could make payroll during uneven revenue cycles.

Tested and True Solutions for New Situations

Instead of taking out loans, some businesses turned to a tried and true method to improve cash flow: accounts receivable factoring. By using accounts receivable factoring, businesses were able to eliminate gaps in revenue because factoring converts unpaid client invoices to cash and the funds are made available within 24 hours. Not only does factoring smooth out uneven revenue cycles, it also accelerates cash flow so businesses can build up capital reserves to make payroll, cover financial obligations, and even roll out plans for growth. Accounts receivable factoring is used by businesses across all industries that issue invoices with payment schedules of 30 days or more. Since factoring does not place debt on the balance sheet, businesses can smooth out uneven revenue cycles without relying on short-term loans.

New Century Financial provides accounts receivable factoring nationwide. There are no long-term contracts, no hidden fees, and businesses get to choose which invoices or parts of invoices we factor for them. Contact New Century Financial today and eliminate uneven revenue cycles.

Are There Viable Debt-Free Business Financing Solutions?

As the financing landscape makes it more challenging for businesses to secure adequate financing, alternative solutions are coming to the forefront. Banks are turning down applications for loans, and businesses do not want to take on extra debt. There are many alternative financing solutions out there for businesses, but are there viable debt-free options that can provide the working capital necessary to sustain and grow operations.

Merchant Cash Advances and Debt-Free Financing

Merchant cash advances are frequently advertised as debt-free financing. After all, they do not depend on credit ratings or collateral, and provide an advance in capital against future sales. That seems fairly simple, but there’s a bit more to merchant cash advances when you look beyond the shiny advertising. In order to repay the balance on a merchant cash advance, your business needs to accept credit card payments. While credit card payments are fairly ubiquitous, paying off the balance within the time frame laid out in the terms is still challenging if your invoices have staggered schedules of 30, 60, or 90 days. Additionally, when a customer pays via credit card, a small percentage is taken from the sale and automatically put towards repayment of the balance. On the surface, this looks like it gives businesses more flexibility compared to fixed monthly payments. In reality, each payment costs the business more in credit card processing fees, high interest rates, and more. For a solution that is marketed as being debt-free and flexible, a merchant cash advance can end up being very expensive.

Factoring as a Debt-Free Business Financing Solution

Factoring is a viable debt-free business financing solution that provides working capital and transparency. Factoring allows businesses to leverage unpaid receivables for fast access to working capital. There are no fixed payments, no hidden fees, and no collateral required. Invoices are submitted and funds are made available within 24 hours, less a small percentage that goes to the factoring company. The entire process is as simple as that, with no long-term agreements. New Century Financial offers fast and flexible invoice factoring for businesses nationwide. We put you in control of which invoices or parts of invoices get factored, and we provide tools so you can check on the creditworthiness of your clients before you make business decisions. Contact New Century Financial today to get access to an affordable debt-free business financing solution.