Category Archives: Factoring Benefits

Taking Your Business Online? Supercharge Your Cash Flow!

Businesses continue to evolve, most often spurred on by external influences. The COVID-19 pandemic forced many businesses to rethink operations, and many entrepreneurs took their companies online to reduce potential health risks to their employees and their customers. By moving operations online, businesses found they could reach a wider audience. Businesses that once relied on local clients were suddenly tapping into demand, statewide, nationally, and even globally. They also discovered the sales side of e-commerce moves at a much faster pace than traditional sales. However, faster sales do not always translate to improved cash flow. Fortunately, there is a way to bring parity to online businesses.

Old-Fashioned Methods and the Digital Age

Technology may have advanced tremendously over the past few years, but standard business practices have remained the same. Employees still get paid on a regular schedule, banks still keep the same hours, and invoices are still issued with staggered payment schedules. Waiting for 30 days or longer for customers to make payments on invoices can place a major strain on cash flow for online businesses. E-commerce has a much higher volume potential, so maintaining a robust cash flow is essential to cover inventory, production, payroll, and overhead. Lag in revenue due to staggered payment schedules can undermine operations.

Rectifying Cash Flow Issues for Online Businesses

Accounts receivable factoring has been helping traditional businesses in all sectors, and it works the same for online businesses. Factoring takes unpaid receivables and converts them into cash within a single day, which is a big change from waiting 30, 60, or even 90 days to receive payments from customers. Online businesses in healthcare, manufacturing, distribution, and more use factoring to supercharge cash flow so they can keep up with increased demand and improve their digital presence.

At New Century Financial, we provide comprehensive factoring services to businesses of all types. We do not lock clients into long-term contracts, and we give businesses the freedom to choose which invoices or parts of invoices get factored. Additionally, there are no hidden fees, and we offer tools to help businesses check on the creditworthiness of their customers. Contact New Century Financial today to learn how we can improve cash flow for your business.

Debtor-in-Possession Financing: Reliable Capital for Struggling Businesses

Debtor-in-Possession financing (or DIP financing) is an often overlooked solution for businesses that are facing bankruptcy or restructuring. DIP financing is an essential way to keep distressed businesses cash-fluid while they are going through the Chapter 11 process.

How DIP Financing Works

At its heart, DIP financing is extended credit designed to meet the working capital needs of businesses that are seeking bankruptcy protection. DIP financing provides businesses with immediate cash to sustain operations and maintain liquidity throughout their reorganization during bankruptcy.

Why Access to DIP Financing is Important

Debtor-in-Possession financing is nothing new, but the need for DIP financing has come to the forefront. The COVID-19 pandemic led to many businesses downsizing, and some had to put operations on hold for months. As the pandemic stretched into the second, third, and likely fourth-quarter of 2020, some businesses could not sustain themselves, even with scaled-down operations. While the CARES Act does make provisions for financing alternatives, borrowers need to be creditworthy. This can cause problems for businesses that have pushed their own credit to the limits to keep operations running through the pandemic.

Using Factoring as DIP Financing

Many businesses are using factoring as a form of DIP financing. Accounts receivable factoring is perhaps the most flexible way to get DIP financing through the restructuring process of Chapter 11. Since factoring is not based on the creditworthiness of your business, you can leverage unpaid invoices for immediate capital without placing additional debt on the books or signing over assets to a bank. Since factoring is not offered by traditional lenders, the option is frequently overlooked by struggling businesses in need of assistance.

Other Options

If your business is in need of Debtor-in-Possession financing for restructuring, contact the team at New Century Financial. We provide comprehensive factoring services, as well as DIP financing options for businesses nationwide. When the going gets rough, you want a financing partner who is on your side to help you get the outcome you want. Contact New Century Financial today to learn more.

How to Avoid Predatory Business Lending in the Pandemic

COVID-19 is an ongoing challenge facing businesses, but entrepreneurs are finding ways to adapt. Some brick-and-mortar businesses are reducing foot traffic, or moving operations completely to online platforms. Others are taking extra precautions to keep customers and employees safe. Throughout all of this, businesses still need financing, but some predatory lending practices have come to the forefront. How can businesses avoid predatory lenders during a pandemic and get the financing they need?

1. Compare lenders before applying for financing

Many lenders seem to offer similar financing programs, but there are often details that get overlooked. Interest rates, origination fees, loan amounts, and more can mean the difference between legitimate and predatory lending practices. Read reviews from other borrowers and talk to the lenders directly. Since you are looking for financing for your business, you are in control, and you should screen lenders in much the same way you would choose a doctor or a new employee.

2. Alternative financing is not always the best fit

Many businesses do not want to deal with traditional lenders because banks have been tightening their requirements, and businesses do not want to take on extra debt. There are lots of alternative lenders out there offering options for working capital, such as merchant cash advances. Merchant cash advances may seem like a good alternative to traditional loans, because they offer an injection of working capital without debt, and they have flexible payments instead of rigid installments schedules. However, merchant cash advances have hidden fees and extremely high interest, because no collateral is involved. Additionally, the balance, fees, and interest make it very difficult to repay the balance before the terms are up, leaving businesses with huge balloon payments. Many fly-by-night predatory lenders emerge and offer alternatives when the market is tight.

3. Try to finance your business from within

No one knows what curve balls will be thrown our way in the near future, so when it comes to financing your business, the advice from the experts is, “Keep it simple, fast, and safe.” Instead of taking on unnecessary debt from loans or dealing with potentially predatory business lending practices from cash advances, entrepreneurs are using factoring services. Factoring has been around for almost as long as businesses have been issuing invoices with staggered payment schedules. At New Century Financial, we offer fast factoring services to turn invoices into cash and made capital available to businesses within 24 hours. Factoring is a debt-free solution, and our services are transparent, with no hidden fees and no ongoing charges. We put you in control, so you can choose which invoices or parts of invoices get factored, so you can quickly build up capital to sustain and grow your operations. Contact New Century Financial today to get the financing your business needs.

Financing Your Business without Traditional Loans

Financing is a primary concern for businesses throughout the United States. While stimulus and relief packages have come and gone in the ongoing COVID-19 pandemic, businesses are looking for something more permanent, but with more flexibility than traditional loans. Fortunately, there is a financing solution that is a perfect fit for a wide range of businesses.

Business Financing and Loans

Loans were once the “go-to” financing plan for businesses in all industries. Over the years – and especially now – that attitude has changed. Paycheck Protection Program (PPP) loans were suspended last August, and many businesses that received them may not be able to take advantage of the loan forgiveness part of PPP loans. So with PPP loans up in the air, some businesses are looking to secure other traditional loans, only to be met with more obstacles. PPP loans were a mad rush because it wasn’t the banks’ money on the lines, it was part of a relief package from the government. Banks are tightening their loan requirements, making it more difficult for businesses to qualify for the financing they need.

The Burden of Loans

In our current economic climate, loans may not be the best course of action to finance your business. Debt and lowered credit ratings negatively impact your business, especially in a time of economic uncertainty. Loan payments, plus interest, take a large portion of revenue away from businesses and can create a strain on cash flow. At the same time, interest rates on traditional loans are subject to hikes that come down from the Federal Reserve. Usually, these increases in interest rates are done to offset inflation, but they make loans more of a gamble than anything else.

Reliable Business Financing

To get their businesses financed, entrepreneurs are finding solutions without taking on debt and high interest rates. Accounts receivable factoring is a great fit for business financing because there is no debt involved, no ongoing payments, and businesses are able to preserve their credit ratings. At its heart, accounts receivable factoring is a form of asset-based financing in which unpaid invoices are converted to cash. By using factoring services, businesses can build up internal capital reserves to maintain and grow operations without relying on debt-based financing, such as loans. New Century Financial offers accounts receivable factoring to businesses nationwide. We are able to convert invoices to cash within 24 hours. Our factoring services have no hidden fees, and we offer the flexibility that businesses demand in today’s economy. Contact New Century Financial today and start financing your business from within.

Businesses Can’t Afford Gaps in Revenue – Especially Now

Businesses in all sectors are trying to get a more stable footing in the COVID-19 economy. Regions around the country are reopening, giving businesses the opportunity to resume operations and hopefully get back to pre-pandemic production rates. Cash flow is crucial to the future success of businesses as the economy reopens, and gaps in revenue can cause major setbacks.

Why Do Gaps in Revenue Occur?

Gaps in revenue can occur for a number of reasons, but the most common cause is from unpaid receivables. Businesses issue invoices with staggered payment schedules of 30, 60, or even 90 days. This is a standard business practice designed to give clients a grace period to make payments, and the staggered schedules, in theory, provide businesses with a constant stream of revenue. More often than not, staggered payment schedules lead to gaps in revenue while businesses wait for their clients to make payments on the balances they owe. While businesses are waiting on payments – sometimes for a month or longer – there are expenses such as overhead, quarterly tax obligations, payroll, and more that need to be met. Gaps in revenue can force businesses to deplete capital reserves or go into debt by taking out short-term loans to smooth out uneven revenue cycles.

Avoiding Gaps in Revenue

To avoid uneven revenue cycles and eliminate gaps in revenue, businesses use accounts receivable factoring. Accounts receivable factoring unlocks the revenue tied up in unpaid invoices by converting them to cash. Factoring is a debt-free solution that shortens the distance between businesses and revenue, so they can continue operations and get a stronger foothold in the marketplace. In a way, accounts receivable factoring helps to automate cash flow for businesses by making funds available within 24 hours on submitted invoices. This allows businesses to meet their financial obligations, make payroll, and gain momentum in the current economic climate.

At New Century Financial, we provide comprehensive factoring services for businesses nationwide. Our accounts receivable factoring services offer flexibility, so businesses can submit invoices or parts of invoices as they desire. With New Century Financial, there are no hidden fees, no mandatory long-term contracts, and we make funds available within 24 hours to boost your cash flow. Contact New Century Financial today to get started.

cash-flow

Accelerating the Rate of Cash Flow for Your Business

We live and work in a data-driven economy where business transactions take place in the blink of an eye. Yet despite the rate at which we do business, companies in every industry are experiencing sluggish cash flow due to staggered payment schedules. Fortunately, there is a solution to accelerate the rate of cash flow for your business.

Payment Schedules and Cash Flow

As technology gets better, the rate at which we do business gets faster. However, some standard business practices remain the same. Wall Street and major banks operate on the same schedules, and businesses still issue invoices with staggered payment schedules. These schedules are designed to benefit both businesses and their clients. When businesses issue invoices with payment schedules of 30, 60, or even 90 days, clients get a grace period in which to gather the capital necessary to pay off the balance. For businesses, staggered payment schedules are supposed to create a constant flow of revenue. In reality, staggered payment schedules can create cash flow issues and even long gaps without any revenue, especially for new and small businesses. Even if a business is waiting a month or more to receive payments from clients, it still has to pay employees and cover overhead expenses. Short-term loans are not the best solutions because adding debt to the balance sheet can further impact finances, especially if lag in customer payments is a recurring issue.

Eliminate the Wait

While standard business practices are not going to change anytime soon, there is a way to boost cash flow and accelerate the rate at which revenue comes into your company. Accounts receivable factoring allows businesses to leverage unpaid client invoices for cash. This boosts cash flow for businesses and reduces the need for short-term loans. As a matter of fact, accounts receivable factoring is not a loan at all, so businesses can avoid debt and preserve their credit ratings. Why wait on staggered payment schedules when you can use factoring to turn your receivables into cash and access funds within 24 hours? New Century Financial provides businesses across all industries with factoring services to boost their cash flow and ensure long-term success. Contact our offices today to accelerate your cash flow.

factoring

Why Factoring Makes Sense for Businesses during Every Economic Climate

There are many reasons businesses use factoring services. Some want to catch up on accounting and get revenue from unpaid client invoices. Others need short-term working capital to cover expenses or take advantage of time-sensitive business opportunities. Still other businesses use factoring to build up reserves for growth projects. No matter the reasons, businesses have found that factoring is a sensible and stable form of financing whether the economy is booming, stagnant, or in a downturn.

Loans Are Unpredictable

For the past decade or so, businesses have been pivoting away from traditional loans. The requirements set by lenders keep increasing, which makes much-needed financing inaccessible to small businesses that might not have the collateral, credit ratings, or established sales history to qualify for loans. Additionally, interest rates on traditional business loans are subject to change. In 2017 and 2018, the Federal Reserve raised interest rates multiple times, placing a strain on finances for business owners everywhere. In a strong economy, increased interest rates and high requirements can prevent businesses from growing to their full potential. In an economic downturn, loans, interest, and debt can force businesses to declare bankruptcy.

Factoring Offers Secure Financing

In contrast to traditional loans, factoring remains steady in all economic conditions. The main reason for this is that factoring is structured around receivables. Receivables are hard assets with a verifiable value. Clients purchase goods and services and invoices are generated. Factoring converts those receivables into cash. The process is not a loan, so businesses do not have to worry about putting up collateral, taking on debt, or varying interest rates. In a strong economic climate, factoring allows businesses to boost cash flow, quickly build up reserves for growth, During a downturn, factoring provides fast access to working capital to cover overhead and keep operation moving.

At New Century Financial, we offer factoring services for your receivables. Whether you need working capital or if you want to ensure a strong cash flow for your business, we can help. Our factoring services put you in control of which invoices or parts of invoices get factored. If you want a financing solution that is stable and reliable in all economic conditions, contact New Century Financial today and ask about our accounts receivable factoring solutions.

loan-forgiveness

Understanding Debt Risk, Loan Forgiveness, and Business Financing

Businesses all over the United States are seeking financing to keep operations running and weather uncertain conditions amid a pandemic. Since April, business owners have seen stimulus packages and relief loans promising loan forgiveness and minimized risk to borrowers. But what exactly do these things mean and how do they impact businesses? Is there such a thing as stable and reliable business financing?

Debt Risk for Businesses

For the past decade or so, traditional lenders have been trying to minimize their risk by shifting it to borrowers. In order to qualify for loans, businesses must meet minimum credit ratings, have enough collateral to put up against the amount of financing requested, and a long financial history. Unfortunately, these requirements marginalize new and small businesses. Even alternatives to traditional debt-based loans, such as merchant cash advances, have very high interest rates to place the majority of the risk with the business borrowing capital. In order for businesses to thrive – even in adverse market conditions – they need financing solutions that minimize their risk and aren’t cost-prohibitive to access.

Loan Forgiveness

Loan forgiveness was introduced with the relief loans created by the CARES Act. In summary, businesses that take out relief loans are eligible for loan forgiveness, provided the funds are used to maintain payroll and benefits. There is a big caveat in these loans which states that if a business needs to lay off workers or reduce payroll, then loan forgiveness will similarly be reduced. So if a business is deemed “non-essential” or loses workers during the pandemic and it is unable to hire replacements, they stand a risk of not getting loan forgiveness. That in itself poses a big risk to businesses, and they need a financing solution that doesn’t hinge on uncertain future events.

Simple and Transparent Business Financing

Accounts receivable factoring offer a stable, reliable, and transparent source of business financing. The process is simple – businesses submit unpaid customer invoices for factoring services, and those receivables are converted to cash and made available within 24 hours. There is no debt, no risk, and no uncertainty, because factoring uses existing receivables. Businesses can maintain a healthy cash flow without worrying about new legislation, fluctuating interest rates, or nebulous caveats.

New Century Financial is a leader in comprehensive factoring services that give businesses more control over which invoices or parts of invoices get factored. We can also finance lines of credit up to $5 million based on receivables. Contact New Century Financial today and get the business financing you need without any of the risk or guesswork.

banks

Can Banks Handle the Needs of Business Owners?

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.

business-financing

Fast Funding for Your Business: Comparing Financing Solutions

Across the business landscape, time is of the essence. Yet while transactions are moving faster to meet the needs of clients, the one thing that seems to take much longer is approval for financing. Fast funding is almost an oxymoron in the financing arena. However, the approval rates and availability of funds do vary greatly between major financing solutions, so we’re going to take a look at the most popular forms of businesses financing and break them down for you.

Business Loans

Business loans can be used for a wide range of purposes, such as equipment, commercial real estate, and more. Business loans work exactly as you’d expect in that entrepreneurs put up collateral and take on debt in order to get the financing they need. What is rarely discussed is that interest rates on business loans can fluctuate with the mandates of the Federal Reserve, and the requirements for borrowers have been steadily increasing for the past decade, making traditional loans less accessible to small business owners. Additionally, business loans use a “chain of command” process, by which loan applications are passed from department to department, often resulting in delays. In terms of fast funding, traditional loans come in with closing that can take several weeks.

Merchant Cash Advances

In comparison to traditional business loans, merchant cash advances can be arranged in a much shorter period of time. Merchant cash advances offer discretionary capital which is provided against future sales. Merchant cash advances are structured around the sales history of a business, which can put newer or smaller organizations at a disadvantage. Merchant Cash Advances also come with hidden fees, and because most of the risk is assumed by the lender, the interest rates are much higher than even traditional business loans. While merchant cash advances provide fast funding compared to traditional lending channels, businesses usually have to wait 10 days or longer to get access to funds.

Factoring Offers Fast Funding

When businesses need fast funding, factoring offers a solution. Factoring provides capital in exchange for unpaid receivables, and funds are made available within a single day. One of the biggest reasons businesses seek additional financing is because revenue is tied up in unpaid invoices with staggered schedules, and factoring unlocks that revenue. Factoring is not a loan, so there is no debt, and businesses get to preserve their credit ratings.

New Century Financial provides fast funding by offering the most complete and comprehensive factoring services for businesses. We make funds available within 24 hours, and we let businesses control which invoices or parts of invoices are factored. There are no long-term contracts and no hidden fees. Contact New Century Financial today and get the funding you need, when you need it.