When businesses need fast financing, they tend to look at fours metrics:
- Is debt involved?
- What are the interest rates?
- How much are the payments
- How quickly can we access funds?
In our current economic landscape, the faster a business can access financing, the better. However, some types of financing have more strings attached based on how quickly funds are disbursed.
Business Loans
Almost everyone is familiar with business loans. Whether offered by a bank or an alternative lender, business loans provide capital in exchange for lowered credit scores. Business loans are typically single-use, and single-purpose, meaning the funding is not renewable, and they must be used for a specific purpose. The processing time for business loans depends on the amount requested, the collateral offered, and the red tape involved.
- Is debt involved? Yes
- What are the interest rates? Varied
- How much are the payments? Varied
- How quickly can we access funds? Weeks to months, depending on the amount
Merchant Cash Advances
 They are not supposed to place debt on the books or impact credit ratings. Because no collateral is involved, the interest rates are much higher than regular business loans. There may not be any debt, but a balance must be repaid within a certain period, which places most of the risk on the borrower. Merchant cash advances can be arranged faster than regular business loans, but it can still take a while for the funds to clear.
- Is debt involved? Yes
- What are the interest rates? Higher than regular loans
- How much are the payments? Varied
- How quickly can we access funds? 1-3 weeks
Invoice Factoring
is not a loan, so no debt is placed on the balance sheet. There are no regular installments or interest rates. Invoice factoring is a fast and straightforward exchange of unpaid invoices for cash. Businesses that issue invoices with staggered payment schedules of 30 days or longer can take advantage of invoice factoring. The funds are discretionary, which means they can be used for anything a business wants, from marketing to covering expenses. Additionally, invoice factoring can be used as much or as little as a business needs.
- Is debt involved? No
- What are the interest rates? None, since it is not a loan. It will simply be just the Factoring Fees which are based on the industry, volume, and your customers.
- How much are the payments? None
- How quickly can we access funds? Within 24 hours
New Century Financial is a national leader in invoice factoring services. We offer full transparency and no hidden fees and make funds available within 24 hours. Contact our offices today to get started.