New Century Financial

When businesses position themselves for growth, the thought of taking out one or more loan is not far behind. For the longest time, debt-based loans have been the answer for everything from overcoming cash flow issues to expanding into new markets. However, business owners spanning all industries are rethinking the traditional growth financing model.

The Limitations of Debt-Based Financing

Growth-focused businesses want to reach their fullest potential. Loans may seem like the conventional method to attain growth capital, but they can also be very limiting. Taking on debt to achieve growth usually means businesses have to walk back a few goals in order to pay off the balance of their loans without creating a severe financial strain. Debt and impacted credit ratings add to the risk of business growth when the end result does not guarantee a proportional increase in sales to offset financial liabilities. In the end, the accumulated debt can keep businesses fro

Manufacturers of all types are facing increased demands from their clients. Whether it is ductwork for HVAC installations, specialized electronics, widgets, or finished products for general consumer use, production expenses are on the rise. Manufacturers need a robust cash flow to purchase raw materials, acquire or maintain equipment, and hire employees to ensure operations run smoothly. When clients are settling accounts at intervals of 30 days or longer, this can disrupt the normal workflow for manufacturers. Fortunately, there is a simple solution.

Filling Customer Orders

Many manufacturers receive orders at a faster rate than they are paid by their customers. On the surface, this is not bad. Making a lot of sales or taking on long-term clients is very good, and can potentially position a manufacturing company for growth very quickly. The issue arises with the rate at which revenue comes into the company. The standard business practice is to issue invoice

For new and small businesses, covering overhead costs while trying to grow operations can be a challenge. Payroll, utilities, advertising, fuel for vehicle, materials and supplies – all of these things can place a strain on finances, especially when business owners are trying to court larger client accounts and act on growth opportunities.

Understanding Costs and Growth

Every business has overhead costs. Sometimes those costs are only limited to paying employees and purchasing supplies to fill customer requests as needed. When businesses are trying to position themselves for growth, the costs can increase for marketing campaigns, spots at trade shows and expositions, and rolling out new products and services. These costs can eat into revenue and stretch finances to the limit.

The Importance of a Healthy Cash Flow

In order for businesses to grow, a healthy cash flow is needed to not only cover costs, but to accumulate capital res

Cash flow issues are not that uncommon. Businesses of all sizes often find that expenses exceed the amount of revenue coming in, which can lead to business owners depleting cash reserves or taking on debt to make payroll and cover internal expenses. To sidestep the restrictions of debt-based loans and correct cash flow issues, businesses turn to invoice factoring.

Using loans to correct cash flow issues – it’s a trap!

For a long time, loans were the only answer to correcting cash flow issues. However, using loans for rightsized finances can be a trap with diminishing returns on one end and exacerbated problems on the other. Taking out a small short-term loan to fix cash flow issues can seem harmless. Sure, it slightly impacts credit ratings and puts a small amount of debt on the books, but the loan will work out in the end because cash flow will be corrected. But what is the same issue occurs a second time? Or a third? Or a fifth? Suddenly, those loans stack up and lende

Almost every business uses suppliers of some sort. Even if you are ordering toner for your printer and paper clips, odds are you are using a supplier. To get the best deals, a business must build strong relationships with suppliers, and that means shopping around.

Not All Suppliers Are the Same

If two suppliers offer the same products, you need to make a closer comparison. Are their prices the same? Do they offer financing options on larger orders? Do they offer lines of credit to their clients? How knowledgeable are their employees and do they understand your needs? A little research can go a long way so don’t be afraid to ask questions.

Lines of Credit from Suppliers

Not all financing plans and lines of credit offered by suppliers work the same way. Some suppliers keep their accounts in-house. That is, they do not report information to a credit agency. It is of the utmost importance that your suppliers submit credit reports to an agency, because it can have an