Inflation has been taking over the headlines recently, and businesses are bracing to offset rising prices, looming interest rate hikes, and more prohibitive loan qualifications, all while trying to maintain a healthy cash flow and finding a source of working capital. Fortunately, there is a fast and convenient solution to tackle all of the aforementioned concerns.
Understanding Our Current Inflation Concerns
The inflation mentioned in the news today goes back quite a few years. Back in 2017, the Federal Reserve raised interest rates on loans quite a few times to mitigate inflation. From 2018 to 2019, things like Opportunity Zones, the threat of tariffs, various deregulations, and tax breaks for specific industries helped to increase revenue for many businesses and lower the cost of living for everyone from entrepreneurs to consumers. In 2020, the COVID pandemic started, and businesses needed relief to stay afloat. As a response, the Federal Reserve began purchasing financial assets so businesses could get PPP loans. Additionally, the Fed lowered interest rates and requirements, so new and existing businesses could access the loans they needed without high turndown rates. Starting in 2022, the Federal Reserve stopped purchasing assets, which is a major signal that the period of low interest rates is coming to an end. In short, raising interest rates will repay the spending the Fed did to keep the economy moving during the pandemic.
Businesses Still Need Working Capital
As higher interest rates come down the pipeline, businesses spanning every industry are looking for ways to mitigate the impact of inflation, maintain cash flow, and get access to working capital without taking out debt-based loans. As in previous years when banks tightened requirements and raised interest rates, businesses are solving their problems from within by using accounts receivable factoring. Instead of lowered credit ratings, placing equity value on the line, or putting debt on the balance sheet, accounts receivable factoring gives businesses a direct line to capital while improving their cash flow. Businesses submit unpaid invoices for factoring and they are converted into cash quickly. There are no fixed payments, no sudden interest rate hikes, and no debt. Businesses can use accounts receivable factoring to boost cash flow, cover expenses, and build up working capital for growth. Factoring is the fastest and most direct way to mitigate inflation while reducing – if not eliminating – the need for loans.
New Century Financial provides the most transparent and flexible accounts receivable factoring services nationwide, with no upper limits, no long-term contracts, and fast turnarounds. Our clients can access funds within 24 hours of submitting invoices. Contact our offices today to get a head start before inflation takes hold.
Review our “Entrepreneur’s Guide to Factoring” for more information and call us at 866-579-1483 or Apply Now to get started.