Category Archives: Factoring Benefits

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.

business-loans

Sustainable Financing for Small Businesses

Small businesses are looking for sustainable financing. Sustainable financing is a solution that is reusable, does not impact credit ratings, and does not place debt on the books. Many people think such a thing does not exist, but the truth is that sustainable financing is very easy to find, and it is available to businesses in almost every industry.

Not All Financing is Sustainable

Business owners understand that traditional loans are not sustainable. After all, traditional loans are single-use, require collateral, lower business credit ratings, and put debt on the balance sheet. While alternative lending products exist, not all feature sustainable financing. Merchant cash advances, for example, are marketed to businesses as offering debt-free financing. While this is true, merchant cash advances also come with hidden fees and high interest rates, making them nearly impossible to repay in-full before the terms of the agreement have come to a close. This leaves businesses with large balloon payments. Other alternative lending products have similar structures, and it is wise for business owners to thoroughly research the fine print before applying for funding that can adversely affect finances.

Sustainable Financing Exists

For a sustainable financing solution, businesses use factoring services. Factoring is not a loan, therefore businesses can preserve credit ratings and avoid taking on necessary debt. Factoring is reusable. So long as there are unpaid invoices, businesses can use factoring to turn those invoices to immediate cash in as little as 24 hours. Unlike merchant cash advances, factoring has no hidden fees or high interest rates. Factoring services are used by businesses across all industries to boost cash flow and maintain a reserve of working capital. Also, by using factoring services and building capital reserves, businesses can reduce the need for other forms of financing to cover expenses and roll out plans for growth.

At New Century Financial, we provide sustainable financing solutions to businesses throughout the United States. We offer the most comprehensive factoring services with no long-term contracts or hidden fees. If you want fast access to working capital without debt, contact the team at New Century Financial today.

business-finances

Preventing Gaps in Business Finances

When businesses experience short-term gaps in finances, the effects can be felt for a long time. Gaps in business finances can take a number of forms. Productivity slows because the capital is not available to cover materials and supplies needed to fill customer orders. Payroll may get delayed. Existing loan payments and other liability may not be covered because the capital necessary is locked up in receivables that clients have yet to pay. Strong cash flow is the key to preventing gaps in business finances, regardless of the economic climate.

Receivables and Business Finances

Outside of point-of-sale operations, businesses issue invoices with payment schedules of 30 days or longer. Payment schedules are a standard business practice, but they create gaps in business finances. A business that makes a sale on any given day will have to wait up to a month or more before seeing revenue from that particular transaction. During that month, businesses still need to make payroll, cover production and delivery of client requests, run advertisements, and pay regular expenses. During the waiting period on receivables, businesses can experience more money going out than coming in, which can place any organization in dire straits.

Closing the Gap

One way to remove gaps in business finances is to use factoring services. Instead of waiting a month or more for payments from clients, factoring can turn unpaid invoices into cash and make funds available within 24 hours. Factoring services are debt-free, and allow businesses to not only cover expenses and make payroll, but to also build up capital for growth during economic upswings or to thrive during downturns. Factoring is a perfect fit for any business that issues invoices with staggered payment schedules so they can maintain a strong cash flow.

Eliminate Gaps in Business Finances Today

New Century Financial is a leader in factoring services. We convert unpaid receivables to cash quickly, and let businesses choose which invoices or parts of invoices we factor. We do not lock clients into long-term contracts, and there are no hidden fees. If you want to eliminate gaps in business finances, contact the team at New Century Financial today.

Maintaining Cash Flow Amid COVID-19 Concerns

Businesses throughout the United States have been impacted by COVID-19. From service companies to staffing agencies, manufacturers to logistics companies, all sectors have been affected. In order to weather the current condition, it is of the utmost importance that businesses maintain a strong cash flow.

How COVID-19 Impacts Cash Flow

As cities place restrictions on which businesses can remain open, limiting hours of operation, and more, business owners need a way to access revenue quickly. There is no doubt that some invoices will age out to collections. Restricting operations will restrict cash flow, but there is no reason why businesses should have to wait 30 days or longer to get paid for sales made prior to the outbreak. After all, businesses still need to pay bills, make payroll, and formulate a strategy to make it through this bout of COVID-19 so they can resume operations once this is all over. Businesses that can speed up cash flow now can build up working capital to offset the disruption caused by COVID-19 and the measures being taken to limit its impact.

Fast Access to Revenue

In order to unlock the capital tied up in unpaid invoices, businesses are turning to accounts receivable factoring. Factoring converts all unpaid receivables to cash, which is made available within 24 hours. This allows businesses to get immediate access to capital in order to cover expenses, make payroll, and make plans so they can successfully come out of the COVID-19 epidemic and continue operations in the future. Unlike business loans, accounts receivable factoring does not place any debt on the books, so businesses get to preserve their credit ratings and collateral, without worrying about interest rate fluctuations from the Federal Reserve. Almost any business that issues invoices with payment schedules of 30, 60, or even 90s days can access factoring services.

At New Century Financial we provide comprehensive accounts receivable factoring services nationwide. If you want fast access to money from outstanding invoices so your business can make it through the restrictions imposed by COVID-19, contact the experts at New Century Financial today.

manufacturing

Service Companies: Financing Challenges and Solutions

Service companies play a very necessary but unique role in our economy. Service companies can be found in every industry, but they do not provide tangible goods, like traditional product-based businesses. The services these companies provide are invaluable, but finding adequate financing to maintain and grow their operations can be challenging.

Financing Challenges

Securing traditional loans can be difficult for any small business. Lenders set requirements for credit ratings and collateral to qualify for loans, but since service companies do not have physical goods, real estate, or other large assets, they might not meet the requirements for most loan programs. Even non-traditional lending, such as a merchant advance, requires a point-of-sale system to repay the balance. Alternative lending places the majority of the risk on the applicant, so there are usually additional fees and high interest rates, as well. Since service companies operate on a lean business model, taking on debt and high interest rates can severely impact finances and prevent growth.

Solutions for Service Companies

The tangible assets that service companies all have in common are receivables. Many service companies either have contracts with clients, or perform on a per-job basis. The invoices issued have payment schedules of 30 days or longer. During that period, a service company still needs to cover expenses, make payroll, and cover the cost of services rendered to other clients. In short, the lag caused by staggered payment schedules can create a situation where a service company is spending more than it is making. To prevent this and build up capital for growth, service companies take advantage of factoring services. Invoice factoring services are designed to accelerate cash flow and eliminate the lag between payments. Factoring is a simple exchange of receivables for cash. Since factoring is a simple transaction instead of a loan, a service company can preserve its credit ratings, avoid debt, and remove the need for traditional and alternative lending.

At New Century Financial, we provide a comprehensive factoring program for service companies. Our team will work with you to create a tailored solution to help you reach your goals. We give service companies the power to choose which invoices – or parts of invoices – get factored, and provide funding within 24 hours without any hidden fees or long-term contracts. Contact New Century Financial today to get started.

business-loans

Running Your Small Business without Breaking the Bank

Businesses of all sizes have expenses. Payroll, supplies, equipment, bills, and more can really eat into a budget before any revenue gets to the bank account. For smaller businesses trying to manage finances, there are ways to run and grow operations without decimating your budget or taking on a ton of debt.

1. Purchasing equipment isn’t necessary

While every business uses equipment, the large cash outlay to purchase machinery, vehicles, and tools can deplete capital reserves or force business owners to take out loans. If you run a small business, or simply want to reduce expenses, try leasing equipment instead. Leasing agreements are flexible and the payments are manageable, so businesses can get the exact equipment they need. Leasing companies also handle maintenance and repairs, which also eliminates extra expenses for your small business.

2. Use Contractors or Staffing Agencies

If you run a small business, you may want to staff your operation with contractors or use a staffing agency. While contractors may get paid more per hour than regular full-time employees, you also will not have to include them when filing your quarterly IRS taxes. The cost of contractors and temps can actually end up saving your small business money when it comes to employee taxes and liabilities.

3. Loans shouldn’t be your first answer to financing

Small business owners are staying away from debt-based financing because of how it impacts cash flow and internal finances. Additionally, loan requirements have tightened over the years, and newer businesses may not have the credit ratings or collateral to qualify for the financing they really need. Loans can place a strain on finances because revenue needs to be portioned out to make those monthly payments. A short-term loan now can end up placing a strain on finances later.

4. Speed up revenue for your small business

The wait between sales and revenue can sometimes seem like an eternity, especially if your small business issues invoices with payment schedules of 30, 60, or even 90 days. While you are waiting for payments from your clients, you still need to make payroll, cover the bills, and pay any other expenses that arise. To speed up the rate at which revenue comes into your small business, use invoice factoring. By using factoring, unpaid invoices will be converted into cash which will be made available within 24 hours. This allows your business to stay on top of finances, cover expenses, and plan for growth projects without relying on debt-based financing.

New Century Financial is a national leader in invoice factoring services. We offer fast and transparent services and allow you to choose which invoices get factored without any long-term contracts or hidden charges. Contact our offices today to speed up your revenue.