Loan Turndowns: Lenders, Requirements, and Business Financing

Posted by NCF On December 24,2020

As banks raise their requirements on loans, business owners are trying ti figure out how they can get the working capital they need to cover obligations, maintain day-to-day operations, and even roll out plans for growth. Loan turndowns have been on the rise, and they are not just experienced by businesses going through a rough financial patch. Loan turndowns impact individual businesses, but have a greater impact on our economy as a whole.

What Triggers Loan Turndowns?

When a business applies for a loan, the lender will compare their requirements with the applicant’s profile. The largest portion of any loan consideration is credit score. For a business loan, lenders prefer their applicants to have credit ratings above 770, and ideally above 800. Anything below that frequently undisclosed number throws up a red flag that the business may not be able to repay the capital they borrow. Cash flow and sales are also


Relaunching Your Business without Cash Flow Concerns

Posted by NCF On December 17,2020

As cities across the country start to lift COVID-19 restrictions, businesses are gearing up to resume operations. Starting back up may be challenging but sustaining cash flow the country reopens may be a bigger obstacle. Fortunately, there is a way to ensure a smooth transition so you can ensure success.

Obstacles to Relaunching Businesses

If your business is ready to start taking customer orders, there are a few things to think about before relaunching. After the first round of sales are made, how will you sustain operations? If your business issues invoices with payment schedules of 30 days or longer, then you could be waiting upwards of a month to see revenue. During that time, overhead expenses still need to be met, employees need to get paid, inventory and materials for production must be purchase, and much more. If sales are high, but the revenue is tied up in unpaid receivables, a business can run into ser


Getting Insights to the Creditworthiness of Your Clients

Posted by NCF On December 10,2020

Every day, businesses are trying to understand their clients better. From analyzing sales and marketing metrics to running focus groups and more, businesses know that if they can get better insights into their clients, they can gain a competitive advantage. One of the key points in dealing with new and existing clients is understanding their creditworthiness.

What Is Creditworthiness?

Creditworthiness is used a lot in the financial sector. It’s a metric used to gauge how likely it is that a potential borrower will default on a loan. The term goes beyond simple credit score calculation and takes into account the timeliness of paying down obligations, business history with vendors and suppliers, other factors. Repayment history is a major point with lenders, because it counts as 35% of a company’s credit ratings. This is why a business can have a history of consistently high sales, great relationships with clie


The Post-COVID-19 Outlook for Business Financing

Posted by NCF On December 03,2020

Businesses are making preparations to reopen, but many of them are in need of working capital. Since not all businesses qualified for or received PPP loans during the pandemic, people are looking for alternative solutions to get the capital they need. However, business financing takes many forms, but the outlook for the most popular programs varies greatly.

Traditional Loans

The outlook for loans does not favor small business owners. As lenders tighten their requirements, small businesses that need extra working capital may have to improve their credit ratings and put up more collateral to qualify for loans. Even if businesses do qualify for a loan, that does not guarantee they will get the amount they need. As the economy contracts, lenders tend to decrease the amount of business financing they offer. Additionally, debt can be an unnecessary burden for a business to take on when holding onto revenue is of the utmo


4 Big Advantages of Accounts Receivable Factoring

Posted by NCF On November 12,2020

Accounts receivable factoring is often seen as an alternative to traditional loans. However, for businesses that may be unfamiliar with how factoring works, that first statement can be a bit nebulous. Accounts receivable Factoring offers a number of advantages to business owners, from improving cash flow to enabling growth, and more.

1. Factoring is not a loan

While accounts receivable factoring is frequently placed under the heading of “lending solutions,” it is not a loan. Accounts receivable factoring does not require collateral, does not impact business credit ratings, and does not place any debt on the balance sheet. Factoring is a simple exchange of receivables for immediate working capital.

2. Accounts receivable factoring improves cash flow

The success of every business relies on having a strong cash flow. When revenue is tied up in unpaid receiva

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