For a long time, business owners have turned to loans as the “go-to” financing method for everything from working capital to equipment, correcting cash flow issues, growth, and everything in between. However, over the past decade, businesses have successfully moved away from debt-based loans and similar financing structures to grow their own capital reserves.
Moving away from Traditional Loans
Since the Great Recession, banks have placed more risk on business borrowers by raising their requirements. At the same time, businesses have wanted to find a way of getting the financing they need without taking on debt or lowering their credit ratings. Since then, dozens of “alternative lending” products have come to the forefront, from lines of credit that don’t require collateral to merchant cash advances. While they claim not to place debt on the books, alternative lending still places most of the risk on businesses through extremely high-interest rates, balloon payments, short loan terms, and more. But if traditional loans are not the answer, and alternative lending is even riskier, how can businesses pivot away from debt-based loan structures and still thrive in a competitive economy?
Financing Without Debt
As newer and more convoluted alternative lending products emerge, businesses are returning to a financing method that has been used for thousands of years: invoice factoring. Instead of placing debt on the books, impacting credit ratings, or having weird payment structures, invoice factoring is the fastest, most direct, and transparent way to finance your business. If your business issues invoices with staggered schedules of 30, 60, or 90 days, you know that you could wait a month or longer before receiving payments from customers. Invoice factoring from New Century Financial eliminates staggered schedules by turning invoices into cash within 24 hours. Because invoice factoring is a simple sale of receivables, no debt is placed on the books, businesses preserve their credit ratings, and there are no ongoing payments.
By factoring invoices, businesses can accelerate cash flow, build capital reserves, cover expenses, and grow their operations. Additionally, they can reduce and even eliminate their need for debt-based financing. If you are ready to break the debt cycle and start financing your business from within, contact the team at New Century Financial or call us at 800-805-8380.