New Century Financial

In late January, the United States government brought the Defense Production Act to the table as a means of tackling the pandemic and accelerating supply chains for vaccines, medical equipment, and more. This means that manufacturers, distributors, suppliers, and businesses across all industries will be taking on government contracts to keep up with this new initiative. But how can these businesses keep up with demands if cash flow is already tight?

What is the Defense Production Act?

The Defense Production Act (DPA) was first deployed in the 1950s to shore up goods and materials to aid the United States military in overseas conflicts. Now, the DPA is being invoked to ensure we can fight COVID-19 and get the country back on track. This act opens up a number of opportunities for businesses who want to dedicate operations to assist in this purpose. Businesses that enter produc

With the announcement of multiple vaccines for COVID-19, people were able to set their sights on the future, while still juggling day-to-day challenges. Businesses in particular need to form a plan to ensure they are in the best financial position possible once we start to enter the post-COVID era.

The Need for Immediate Capital

For the past year, businesses have had to adjust to pandemic guidelines. Reduced or high focused operations have forced businesses to worry about maintaining cash flow for immediate expenses, such as payroll, overhead, inventory, and supplies. Business owners are focused on maintaining cash flow for the here and now. The advent of vaccines has changed all that. Businesses now need to maintain cash flow to handle daily, weekly, and monthly expenses, as well as planning for six months or a year from now when the country isn’t facing such restrictions.<

Asset-based financing – sometimes referred to as asset-based lending or ABL - has come to the forefront as a popular funding solutions for small businesses across all industries. However, there is quite a bit of confusion over exactly how assets-based financing solutions work and how businesses can use them.

Defining Asset-Based Financing

Asset-based financing is a catch-all for funding solutions structured around items owned by a business. Equipment, property, and other assets can be used to create financing in place of traditional debt-based loans. Sometimes, asset-based financing is a line of credit, but by far one of the most robust, efficient, and versatile forms of asset-based financing is accounts receivable factoring, which is structured around invoices. Receivables are assets owned by a business. Once a sale is made, an invoice is generated, which acts as a note f

The health and strength of any business centers around cash flow and the amount of working capital on hand at any given point. Now more than ever, businesses need working capital to maintain operations and make plans for growth as the economy enters the early stages of recovery. However, not all working capital solutions are the same.

Loans are no longer the go-to solution

Loans were one of the main method for businesses to secure the working capital they needed. Over the past decade, and especially in the last year, businesses have been moving away from loans. PPP loans were very helpful, but neither banks nor businesses really took on any risk. Traditional loans place debt on the books for businesses. At the same time, both banks and businesses assume risk with loans. Banks that approve loans for businesses are at risk if entrepreneurs default. Similarly, businesses are at

When businesses need to smooth out uneven revenue cycles, boost cash flow, or get fast access to capital without taking on debt, factoring is the go-to solution. However, like with all financing products, the factoring industry casts a wide net, and not all factoring solutions are the same. Finding the right factoring solutions for your business has as much to do with your capital needs as it does the specifics of the factor you are using. Businesses should be looking for the following qualities if they want to find the best factoring services.

Look at factoring limits

Some factoring companies have minimum requirements for their clients. Factoring solutions for large companies typically require a base invoice amount to qualify for services. Ideally, you should look for factoring services that have low or no minimum, and no upper limits.

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