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Can Factoring Help to Correct Cash Flow Issues?

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 lenders don’t want to hear that expenses overshadowed revenue. Payments need to be made. Lenders, other creditors, and employees are suddenly wondering where their money is. In short, loans can quickly make a bad situation worse.

Taking a new approach without debt

The number of new, small, and growing businesses has been on the rise. While cash flow issues still arise, business owners are opting for invoice factoring as a more viable solution. One of the biggest causes for cash flow issues can be traced to unpaid receivables. Invoices with payment schedules of a month or longer can turn cash flow into an intermittent trickle. Invoice factoring converts unpaid invoices to cash which is immediately accessible for use to correct any cash flow issues. By continuing to take advantage of the fast turnaround of invoice factoring, businesses can rightsized finances and quickly build up reserves to safeguard themselves against any issues that may arise in the future. Invoice factoring is a very powerful solution for businesses of all sizes and a debt-free alternative to short-term loans.

New Century Financial provides factoring solutions for businesses to help them overcome cash flow issues and gain more stable financial footing for long-term success. Contact our team today to get started!

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How to Shop for the Perfect Suppliers

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 unseen benefit. You can make large purchases every single week and pay off the balance ahead of time, but if your supplier isn’t reporting your activity, your business credit ratings stagnate. Building a relationship with a supplier who reports information to one of the big agencies can greatly improve your credit ratings in a short period of time.

Paying Your Suppliers

Building a strong relationship with your supplier is a two-way street. They will offer discounts, lines of credit, financing options, and even take special requests, and all they ask is that you pay your balance on time. Settling your accounts on or ahead of time puts you in good standing with your suppliers, and may even open up further opportunities. If you want to really get on your supplier’s good side, refer other business associates their way and give them more sales. Reciprocity is the key.

Never Delay Payments to Your Suppliers

One way to ensure you always have the capital on hand to make large or small purchases is to factor your own customer invoices. When you make a sale, your business needs that revenue to purchase supplies and materials for orders in the pipeline. Instead of waiting a month or more, factoring can convert your receivables to cash within 24 hours, so you can purchase what you need, when you need it.

New Century Financial offers the most comprehensive factoring services nationwide. Contact our offices today to learn how we can help your business grow.

The Biggest Advantages of Using Factoring Services for Your Business

When your business uses factoring services, the advantages go well beyond fast access to capital. Factoring services can help make your business m ore financially secure, allow for rapid growth, and much more. The experts at New Century Financial have put together a list of the biggest advantages of using factoring services to give better insight into how businesses benefit in both the short and long term.

Improved Cash Flow

It’s no big secret that if you have revenue tied up in unpaid customer invoices, cash flow can seem pretty tight. Even if sales are high, waiting 30 days or longer for customers to settle accounts can threaten to flip finances upside down. Factoring converts outstanding receivables to cash in as little as 24 hours, which supercharges your cash flow.

Reducing the Need for Loans

Business owners want to avoid debt and preserve credit ratings whenever possible. By converting receivables to cash through invoice factoring, businesses can build up capital and reduce their reliance on loans.

Zero Debt and Preserved Credit Ratings

Factoring is a simple exchange of receivables for cash. Because of this, no debt is placed on the balance sheet, and business credit ratings are preserved. Financing solutions don’t get any simpler.

Meet Payroll Obligations

A company can get an extension on utilities and other bills, but one of the first rules of business is to always make sure your employees are paid on time. Cash flow strains can make meeting payroll obligations challenging. Because factoring directly improves cash flow, making payroll becomes a non-issue.

Position Your Business for Growth

Factoring promotes growth for businesses of all sizes. When cash flow is improved and the need for debt is reduced, businesses can accumulate the capital they need to position themselves for growth. Business owners can act on time-sensitive opportunities instead of pushing back timelines due to lack of funding.

Putting Control in Your Hands

Other forms of financing make businesses beholden to lenders. Factoring, by contrast, is fully customizable. Businesses can factor as much as they want, when they want. Additionally, businesses can show which invoices or even which part of invoices to factor. No hidden fees. No extra charges.

New Century Financial provides comprehensive factoring solutions tailored to your needs. To get started, contact our offices today.

The Benefits of Having a PEO Company

Business owners and decision makers understand how to make the most of every dollar to run and grow operations. However, as a business grows, the demands placed on human resources and other facets increase dramatically. To ensure that money isn’t wasted and to get the biggest return to keep things running smoothly, businesses use PEO companies.

What is a PEO company?

A professional employment organization (PEO) handles many HR functions, such as payroll and benefits. This method of contingent staffing puts HR, payroll, benefits, and compliance responsibilities in the hands of a dedicated team, so owners and managers can focus on running their business. Additionally, PEOs can save businesses lots of money compared to those that try to handle everything in-house.

Help with payroll

By working with a PEO, businesses can reduce payroll processing costs along with the accompanying accounting. PEOs can handle withholdings, garnishments, W-2, and even 941 payments. In addition to basic payroll and the related accounting functions, a good PEO can offer access to retirement savings programs, such as 401(k) plans. PEOs will typically provide the materials necessary for you and your employees, as well as the administrative services to manage retirement accounts to help employees reach their goals. This can save businesses a tremendous amount of money, while also offering benefits that increase employee retention.

Workers’ Compensation and Legal Expenses

Good PEO companies can manage insurance claims and premiums. These can often be time-consuming and costly when combined with the requisite audits, certification, compliance, and general paperwork to run these programs. As a co-employer, a PEO also shares the responsibility in legal matters. PEOs keep a team with legal expertise in work-related matters, such as wrongful termination claims and discrimination suits. With a deep understanding of the intricacies of HR, a PEO can not only save your business time and money, but also help avoid any costly legal entanglements.

Meeting payroll expenses through factoring

While not directly related to PEOs, businesses can save enormous amounts of money by optimizing cash flow and accounts receivable. Waiting on customer payments can often make operations costly, even if sales are high. Staggered payment schedules frequently force businesses to resort to short-term loans to correct cash flow issues. Invoice factoring takes unpaid receivables and converts them into cash which is immediately accessible. This boosts cash flow and helps businesses meet payroll for their employees – all without placing debt on the books.

New Century Financial offers the most comprehensive invoice factoring services. Contact our offices today and start optimizing your cash flow for long-term growth and success.

Rising Interest Rates Drive Need for Alternative Business Financing

Last month interest rates on loans were raised for the third time in 2018. As our economy gains momentum, the Fed may implement more rate hikes to guard against inflation. However, rising interest rates are also making businesses more cautious about taking out loans and looking for more flexible financing methods that don’t place debt on the books.

Avoiding Debt and Rising Interest Rates

Instead of seeking funding from traditional lending channels businesses are building capital by factoring receivables. Accounts receivable factoring provides debt-free capital by converting unpaid invoices to cash. Most businesses follow the standard practice of issuing invoices with a payment schedule of a month or longer. Instead of waiting on a staggered stream of revenue, factoring can convert invoices within a single day. The improved cash flow allows business to quickly build up a source of working capital without the need to rely on loans.

No Debt. No Installments. No Rising Interest Rates

Accounts receivable factoring offers a number of benefits that traditional loans do not. Perhaps the biggest advantage of building capital reserves through factoring services is that no debt is placed on the books. In essence, factoring is considered a sale of receivables, so no liabilities are generated. Because of this, there is no need to make regular installments on the financing, and factoring is not subject to arbitrarily rising interest rates. Additionally, accounts receivable factoring services give businesses more control over the amount of financing they receive from invoices. Businesses can choose to factor all of their receivables or only a portion, depending on their needs.

Faster Growth

Invoice factoring gives businesses the ability to achieve rapid growth with losing any potential by placing debt on the balance sheets. Businesses can use accounts receivable financing to improve cash flow to smooth out uneven revenue cycles and to build up capital to roll out large growth projects. As opposed to single-purpose, single-use loans, factoring provides the versatility, flexibility, and efficiency business owners demand.

The current economic climate is full of growth opportunities for businesses. Instead of debt-based financing and increasing interest rates on loans, accounts receivable factoring can supercharge your cash flow and help you position your business for growth. Contact New Century Financial today and learn how factoring services can give your business a competitive edge.

Carrier Fleets Use Factoring to Meet Increased Demands

Carrier fleets are in a very interesting position right now. Shippers and customers rely on carrier fleets to get materials and goods to their destinations. Simultaneously, carriers are positioning themselves for growth to recruit more drivers and put more capacity trucks on the highways to meet the demands of the current economic climate. However, carrier fleets need ample capital to jump on growth opportunities while still covering payroll and other regular expenses.

The Cash Flow Bottleneck

Hauling shipments all over the country generates a large number of receivables. The standard procedure is to issue invoices with staggered payment schedules of 30,60, and even 90 days. The delays in payments can place a severe strain on cash flow, which can force carrier fleets to put growth projects on hold, and sometimes leave them struggling to cover overhead costs. This cash flow bottleneck can have bigger repercussions outside of just the trucking industry, causing supply chains to slow down due to staggered revenue.

Factoring for Carrier Fleets

To speed up and strengthen cash flow, carrier fleets use factoring services. Factoring turns receivables into cash with 24 hours, which gives carriers faster access to capital than waiting 30 days or longer. By using accounts receivable factoring, carriers can quickly build up the cash reserves needed to cover payroll and other costs. Additionally, carrier fleets can move forward with their recruiting efforts so they can put more drivers and capacity trucks on the road to meet the demands of clients. Because invoice factoring is debt-free, trucking companies can preserve their credit ratings and reduce the need for loans. Besides, with the rising interest rates on bank loans, financing receivables through factoring presents less risk to the transportation industry.

Boost Your Cash Flow and Keep Operations Rolling

New Century Financial offers accounts receivable factoring to carriers of all sizes. Our team will work with you directly to create a factoring strategy to meet your needs and help you achieve your goals. Whether you need to unlock revenue tied up in receivables to cover overhead expenses or you are positioning your business for growth, contact the experts at New Century Financial today.

Maintenance Companies: Unlock Your Cash Flow Potential

The demand for service companies has skyrocketed over the past year. Among those, maintenance companies have seen increased orders and contracts from both residential and corporate clientele. While many maintenance companies do not have the real estate or other assets to get traditional financing, there are ways to get the funding necessary to meet the demands of a growing customer base.

Maintenance Companies Rely on Cash Flow

A healthy cash flow is the key to long-term success for all maintenance companies. But with contracts and invoices, waiting on payment from customers can place a severe strain on cash flow. If there were a way to receive payment at the rate of delivering services, maintenance companies could grow exponentially without having to take out short-term loans for extra working capital. Fortunately, there is a way to unlock the potential of your cash flow without taking on unnecessary debt.

Boosting Cash Flow

Most maintenance companies provide services based on contracts and issue invoices with staggered payment schedules of a month or longer. Waiting 30 days or more to receive payment from clients not only places a strain on cash flow, but can keep maintenance companies from buying supplies, marketing to potential clients, or even making payroll. By using factoring services, those unpaid invoices are immediately converted to capital. This supercharges your cash flow and allows you to sustain and grow operations. The maintenance industry relies on providing services instead of goods, so building up capital reserves is necessary for long-term success.

Sidestepping the Debt Trap

Most entrepreneurs in the maintenance industry feel the only way to get capital is through debt-based loans. But with higher accessibility requirements for loans and increasing interest rates, traditional financing methods are ultimately cost-prohibitive. The maintenance industry needs a solution that is flexible while not impacting credit ratings or putting debt on the books. Invoice factoring is just such a solution, and gives maintenance businesses the freedom to take advantage of growth opportunities during this economic uptick.

New Century Financial provides factoring services to businesses within the service industry. Whether you own a maintenance company, janitorial business, or any other operation that provides services, we can help to boost your cash flow to give you the capital you need, debt-free. Contact our offices and get started today!

Tech Factoring: Continuous Capital for Long-Term Success

The technology industry covers a wide range of businesses, from hardware companies to software development, independent consultants, and everything in between. Yet whether your business sells large hardware configurations, consulting services on long-term projects, or subscription-based services, working capital keeps the lights on, allows people to find solutions, and meet time-sensitive deadlines.

Invoices and the Speed of Technology

Accounting and technology move at different speeds. A fast a crucial tech solution may be delivered within hours, but the rate at which clients pay their invoices may take a month or more. This disparity can severely restrict finances. Even lean tech startups require some very high-end resources to deliver on contracts and customer requests, and the lag in payments can cause operations to grind to a halt.

Resolving the Equation

In order to keep cash flow moving faster, and to build up the amount of working capital on hand, tech companies are using factoring services. Tech factoring unlocks revenue held up in unpaid receivables. Factoring is much faster and more efficient than traditional loans, and factoring doesn’t place debt on the books. Factoring gives businesses in the tech industry access to capital which can be applied to basic overhead expenses, research and development, and alleviate the need for “crunch time.” Tech factoring also allows businesses to build up the capital necessary to take on larger clients without placing a strain on internal resources.

Building Credit

Many tech startups cannot access loans for a number of reasons. First, traditional lending channels still view the tech industry as a high-risk field. Second, many tech companies are startups operating on a lean staff with a short history of financials and low credit ratings, precluding them from loan approval. Because tech factoring is debt free and structured around an exchange of receivables for cash, businesses can preserve and build credit ratings.

Mergers and Acquisitions

Mergers and acquisitions are not uncommon among technology businesses. However, both mergers and acquisitions require a reliable source of capital, especially during the delicate transition phase. Technology factoring allows companies to boost cash flow during these crucial transactions to ensure there is ample capital to cover immediate concerns and expenses. Taking advantage of the benefits of factoring services can enable rapid growth for businesses in the tech industry.

New Century Financial is a national leader in technology factoring for all types of businesses in the industry. Contact our offices today and learn more about how we can improve your cash flow.

Invoice Factoring for the Oil & Gas Industry: Improving Your Cash Flow Pipeline

Almost every aspect of our economy depends on the oil and gas industry, right down to the supply chains that move energy resources and finished products from coast to coast, and even overseas. Oil and gas sales are on the rise, but that doesn’t mean revenue is coming in any faster.

Business is Faster Today than Just a Few Years Ago

Everyone from private homeowners to gas stations, heating companies, petroleum distributors, on up the market have the ability to monitor gas an oil, and place orders immediately. In response, oil and gas companies have had to improve supply chains and response time. However, despite advances in the oil and gas industry, the aging windows on invoices has remained the same. Customers at all levels still have up to 90 days to remit payment on open invoices. The lag in revenue is felt on the back end, and companies cannot keep up with customer demands because the capital simply isn’t there to maintain overhead expenses. If there were a way to bring the ratio of sales and orders closer to the amount of revenue coming in, oil and gas companies would be able to grow to meet customer demands at all levels.

Boosting Cash Flow with Invoice Factoring

Fortunately, businesses within the oil and gas industry have a way to bring in revenue at the rate of customer orders. Invoice factoring boosts cash flow and streamlines the accounting process. Instead of waiting between 30 and 90 days to see payments on orders, factoring converts open invoices to capital with the span of a single business day. As invoices are generated, they are submitted for factoring, and the funds are made available immediately. Invoice factoring improves cash flow, allows businesses to speed up transactions, frees up internal resources, and reduces the need for loans.

New Century Financial provides comprehensive factoring services to the oil and gas industry to allow businesses to even out cash flow, cover overhead expenses, build up growth capital, and much more. Contact our offices today and put our expertise to work for your business.

Distributors: Maintaining Inventory for Increasing Demand

Distributors are experiencing an increased demand from all industries. Being able to supply businesses ranging from the healthcare industry to the energy sector, retailers, and everyone in between is essential for success. Yet the increasing demand from customers means distributors are facing large and unexpected orders, and keeping a well-stocked inventory is a necessary part of the supply chain, and integral to economic growth.

Distributors and Staggered Payment Schedules

When distributors fill orders from clients, invoices are issued with staggered payment schedules ranging from 30 to 90 days. The staggered payment schedules reduce the rate of incoming revenue, which can place a severe strain on finances when distributors are facing an uptick in the size and volume of orders placed by customers. Some distributors resort to taking out short-term loans to bulk up their inventory. In extreme cases, distributors have to turn away potential sales because they do not have the materials and items available to complete large orders, which is frustrating to everyone involved, and pushes customers to purchase from larger competitors.

The Dangers of Loans and Cash Advances

Using short-term loans and cash advances to maintain or increase inventory can have undesired financial repercussions for distributors. Short-term loans place debt on the books. The brief and finite amount of capital can be used to replenish inventory, but once the capital is used, a distribution company has to repay the balance. If inventory runs low again, another loan can be used, which  further impacts business credit ratings and only adds to the existing debt on the balance sheet. Short-term loans can quickly add up, especially if the revenue from sales is not coming in at a rate fast enough to pay off the loans and replenish stock. Similarly, cash advances can also place a major strain on cash flow. Cash advances are often advertised as an instant injection of debt-free capital that distributors can use to replenish inventory or even grow their operations. Cash advances have very high interest rates, and they are repaid from a small percentage of customer credit card transactions. This leaves distributors with large balloon payments when the terms of the agreement end. Cash advances also do not guarantee a faster rate of revenue and they withdraw the payments automatically from your bank account.

A Smarter Solution

Factoring allows distributors to get fast access to funds from sales without debt. When a sale is made, the distribution company submits the unpaid invoice for factoring. The invoice is then converted to capital which can be accessed the very same day. This gives distributors the funds necessary to maintain inventory and supplies to fill customer orders of all sizes. If you are in the distribution market and are looking for working capital solutions to maintain or even grow operations, contact the experts at New Century Financial today.