At the end of March, the CARES Act was signed into law, which provided special relief loans to businesses across the United States. Immediately, banks were inundated with loan requests, which severely slowed down the approval process. Additionally, the number of requests greatly overshadowed the amount allocated for relief loans, resulting in a total depletion of funds. This prolonged the anxiety and frustration for business owners nationwide. Even those who were approved for relief loans were kept in a holding pattern because there were no funds to be given to them. Now, with a second round of relief loans in the pipeline, can banks meet the needs of business owners?
Banks and Loans
The relief loans offered by banks were supposed to be at no immediate cost to business owners. Similarly, the major banks in the United States have stated that most of their earnings do not come from debt-based financing. However, during the period that relief loans were available, banks racked up over $10 billion in processing fees for those loans. That means banks increased their earnings even on loans for which they could not provide funds because the well had run dry. There is no hard data on the percentage of businesses that applied for loans, because many were still trying to apply when funds ran out. Likewise, there is no hard data on how many business owners are still waiting for funds after being approved. In essence, during this uncertain time, even banks seem unprepared and business owners need a more reliable source of financing without any risk or potential debt.
Reliable Financing for Business Owners
There is a source of capital available to business owners that isn’t dependent on banks, legislation, or fine print about loan forgiveness that may be reduced over time, leaving businesses with debt on the balance sheet. Many businesses have unpaid receivables that can be leveraged for immediate funds. Instead of waiting a month or longer for clients to make payments on invoices, businesses can sell those receivables and get access to capital within 24 hours through accounts receivable factoring. By using factoring, businesses can receive financing for their outstanding receivables, which allows them to boost their cash flow and maintain a source of working capital as new invoices are generated.
Get the Financing Your Business Needs
At New Century Financial, we offer comprehensive accounts receivable factoring. Factoring is not a loan, so we can get you set up quickly without impacting credit ratings or placing debt on the books. When you send your unpaid invoices to New Century Financial, we will make funds available within 24 hours. New Century Financial is well-capitalized and we are able to fund up to $5 million in lines of credit for businesses. Contact our offices today to get started.