When businesses need capital, the default response is to take out a loan. However, more companies are discovering the advantages of invoice factoring instead of traditional loans, which gives them much more freedom and financial stability than debt-based loans.
1. Invoice factoring is debt-free
This does not place any debt on the balance sheet. Short-term loans and other debt-based financing provide capital, but the balance owed significantly strains cash flow and forces some businesses to take out even more loans if the need for money is recurring. Invoice factoring is not debt-based, which helps companies to preserve credit ratings and move forward without obligations.
2. Faster processing times
The long processing time is one of the biggest hang-ups about getting a loan. Businesses can wait weeks or even months to access their funds between deep credit pulls, interdepartmental reviews, and closing windows. Invoice factoring from New Century Financial is fast. When invoices are submitted, our clients can access funds from their receivables within 24 hours. In addition to having shorter processing times than debt-based loans, invoice factoring also eliminates staggered payment periods on invoices, typically as long as 30, 60, or even 90 days.
3. No ongoing fixed payments
A business borrows money, and the balance is paid off in increments with interest tacked on. It is a transaction, not a loan. Invoices are submitted, a small percentage of the total amount is paid as a processing fee, and then the money is made available. Simple as that. No lingering balance that is whittled down over time. No need to refinance to engage in debt consolidation. Invoice factoring is fast, simple, and transparent.
4. More accessible than traditional loans
Loans have a high bar of entry. Banks and other lenders keep raising their collateral and credit requirements, often pushing small businesses to the sidelines before they even get a chance to apply. Invoices are structured around receivables. If your business issues invoices with payment schedules of 30, 60, or 90 days, you have cleared the biggest hurdle to implement invoice factoring.
New Century Financial is a national leader in invoice factoring with fast turnarounds and no hidden fees. Contact our offices today and stop jumping through hoops to get your needed funding.