Category Archives: Factoring Benefits

Make 2020 the Year to Grow Your Business

Happy New Year! With 2019 behind us, many businesses are looking to make progress towards growth. However, to grow your business, there are a few things you need to do to ensure smooth sailing.

Start with the Simple Stuff

If you want to grow your business, you need to make sure there is nothing holding you back. That means making sure your quarterly IRS tax liabilities are in order. As it is January, businesses will be filing for the quarter of October to December of 2019. Next, it is time to take a look at your business credit report. See where your business stands and if there are any red flags that would stand out to lenders. To grow your business, you want to be in the best position possible, which means paying down outstanding balances and making sure there are no lingering marks on your credit report. Ideally, you should be checking your business credit report quarterly, at minimum. Removing those red flags will be reflected the following month. With taxes and credit history out of the way, the next move is to get a better handle on revenue.

Grow Your Business with Better Cash Flow

Many businesses are kicking off the new year by waiting on payments from invoices issued in the previous quarter. If you want to grow your business, you need access to as much working capital as possible without taking on additional debt. Unfortunately, waiting on payments from sales made a month ago or longer can pose a challenge. To accelerate the rate of capital coming in, businesses turn to accounts receivable factoring. By using accounts receivable factoring, unpaid invoices are turned into cash within a single day. This allows your business to catch up on revenue and improve cash flow. Additionally, with a greater influx of capital, you can build up reserves so you can act on opportunities to grow your business instead of putting off plans because of unpaid client invoices.

Take the Next Big Leap

By taking care of liabilities and credit, along with improving cash flow through accounts receivable factoring, you can create a sound strategy to grow your business. At New Century Financial, we provide the most comprehensive factoring services to help businesses improve cash flow and achieve rapid growth. Make this year even more successful, and grow your business with fast, flexible, and efficient factoring from New Century Financial.

The Difference between AR Financing and AR Factoring

While the rate at which everyone does business has increased tremendously from even a few years ago, one thing remains constant – invoices are issues with payment schedules of 30 days or longer. This forces businesses to wait up to a month or more for revenue to trickle in. When businesses want to boost cash flow and access revenue faster, they can choose between AR financing and AR factoring. While both methods may seem similar, they function in very different ways.

AR Financing at a Glance

Accounts receivable financing – or AR financing – is a form of asset-based lending. Receivables are used as collateral to create a line of credit that businesses can borrow against. Often, true AR financing involved term contracts, and the amount of financing available can go up or down depending on the number of receivables in a given review period. Some AR financing providers also impose upkeep fees on these asset-based lines of credit. Other forms of AR financing offer loans against the receivables, which could impact credit ratings.

AR Factoring at a Glance

AR factoring is a different approach to leveraging receivables for capital. AR factoring is a fast and transparent procedure that delivers money for receivables, often within a single business day. AR factoring is structured around the actual receivables and the “creditworthiness” of the clients who were issued the invoices. AR factoring provides capital for receivables, so there is no line of credit. Additionally, true AR factoring services do not charge maintenance fees or lock clients into long-term contracts. AR factoring is also versatile, allowing businesses to choose which invoices or parts of invoices get factored.

Pay Attention to the Details

AR financing and AR factoring are often conflated, so it helps to pay attention to which services you are actually getting from your provider. Do not hesitate to ask questions to make sure you are not getting into a contract when you only need funding for your receivables right then and there. Also, check to see if there are maintenance fees and other charges.

At New Century Financial, we provide true AR factoring services, so businesses can access capital for their unpaid invoices within 24 hours. There are no contracts or extra fees, and businesses are able to choose which receivables or parts of receivables get factored. When you want fast cash for your receivables without any strings attached, contact the experts at New Century Financial.

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Creditworthiness: What You Need to Know About Your Clients

Creditworthiness is a term often used by financial institutions to gauge their ability to secure loans or other types of financing. It would stand to reason that business owners are concerned about their own creditworthiness, which is why many are focused on building credit ratings for their organizations. But should you be concerned about the creditworthiness of your clients?

Credit Worthiness and Cash Flow

The creditworthiness can give you insight into your clients. You can take a quick glance and see if they are relatively new, have a robust and established track record, or if they are going through a rough patch. Additionally, the creditworthiness of your clients can be an indicator of how quickly you will be paid for the invoices your issue after sales are made. A client with a high credit record is likely to provide timely payments on goods and services. A client with a lower score may take longer, or even ask for an extension. Others may be more troublesome, and receivables could age out of the payment schedule and end up going to collections – a situation no business owners wants to deal with.

Accounts Receivable Factoring and Creditworthiness

Businesses use accounts receivable factoring to get access to revenue faster than waiting on staggered payment schedules. Receivables are converted to cash within 24 hours, resulting in a stronger cash flow and the ability to build up reserves for growth. New Century Financial goes a step further, and provides business owners with the ability to check on the creditworthiness of their clients. Having this insight gives business owners an idea of which clients might become a risk with payments in the future, or which ones are in good standing and might be worth perusing for long-term accounts and larger sales.

New Century Financial is a national leader in accounts receivable factoring services. Our process is fast, transparent, and we allow business owners to decide which receivables or parts of receivables get factored. There are no long-term contracts, and we provide the tools necessary to check up on the creditworthiness of your clients and plan for long-term success. Contact New Century Financial today to get started.

2020

Make “Reducing Business Debt” One of Your New Year’s Resolutions

Many businesses are closing out 2019 with debt and other liabilities on the books. Reducing business debt is a great and realistic resolution that entrepreneurs can set for themselves in 2020. Reducing business debt helps to improve credit ratings, widen financing options, and removes strains on cash flow. Creating a plan for reducing business debt is not as insurmountable as it may initially seem.

Step 1: Reducing Debt through Consolidation

Some new and small business owners are entering 2020 with debt and liabilities centered around loans. In many cases, those small business owners are balancing payments on multiple loans, each with it’s own installment amount and interest rate. Debt consolidation is a way to combine those loans into one singular loan with manageable installments and interest rates. By having business debt under one loan, entrepreneurs can pay off multiple creditors quickly and efficiently.

Step 2: Stay on Top of IRS Liabilities

It is of the utmost importance to stay on top of IRS liabilities, such as 941 payments. Letting IRS liabilities to slip can impact business credit ratings, lead to tax liens, revenue garnishment, and more. Owing the IRS money is not something to be taken lightly, and paying attention to those quarterly 941 payments will help your business stay in good standing with the IRS. If you cannot make IRS tax payments on time, let them know. The IRS has forms for delays or to work out a resolution on owed taxes.

Step 3: CPA Services

Many small business owners find themselves wearing multiple hats, including the one for in-house accountant. Hiring a CPA or even accounting software can reduce the headaches caused by balancing the books. CPA services can help guide entrepreneurs who are focused on reducing debt and create budgeting strategies.

Step 4: Improving Cash Flow

Boosting cash flow is a great way to ensure there is capital on hand to cover overhead, liabilities, and reduce debt. Accounts receivable factoring is a debt-free method of converting unpaid invoices to capital. Since many small businesses issue invoices with staggered schedules, waiting on payments can cause lag in revenue, which can lead to liabilities and debt. Factoring gives businesses faster access to revenue and the ability to build up capital reserves, which can correct strains on finances.

New Century Financial is a national leader in accounts receivable factoring services for businesses of all sizes. If you are focused on reducing business debt, accounts receivable factoring is a fast and efficient way to build up the capital you need to make payments on loans and IRS liabilities. Contact New Century Financial today to get started.

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Improve Cash Flow and Achieve Growth for the New Year

As 2019 winds to a close, many businesses are trying to position themselves for a robust start to the new year. Some want to improve cash flow to reduce gaps in revenue from customer payments. Others want to achieve growth and reach their projected goals without relying on debt-based loans. All of these are attainable, and there’s no better time like the present to start.

Improve Cash Flow for 2020

Many businesses that make sales at the end of 2019 will not see revenue from their customers until 2020. Invoices with staggered payment schedules of 30, 60, or even 90 days could find themselves waiting until January, February, or March to see revenue for their sales. This could force businesses to put plans on hold or enter the new year in a financial position that is less than ideal. The best way to improve cash flow is to use invoice factoring. Invoice factoring converts unpaid receivables to cash within 24 hours, so businesses can stop waiting on staggered payment schedules and greatly increase the amount of revenue coming into their accounts.

Achieve Growth

When your clients are making payments on invoices according to staggered payment schedules, accumulating the capital necessary to roll out growth projects can be challenging. Businesses are forced to move internal goal posts, stalling what would otherwise be rapid expansion. As shown above, invoice factoring can improve cash flow, but it can also help businesses achieve growth. As the rate of cash flow improves, businesses can build up capital reserves to take advantage of growth opportunities without relying on debt-based loans to reach the next big milestone.

Make 2020 a Lucrative New Year

Invoice factoring can help your business start off 2020 with a big advantage. At New Century Financial, we specialize in invoice factoring solutions to help businesses improve cash flow and achieve growth. Our comprehensive invoice factoring services are fast and transparent, with no contracts or hidden fees. We also place control in your hands, so you can choose which invoices or parts of invoices get factored. Contact New Century Financial today and make the upcoming year a prosperous one.

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Rethinking Standard Business Procedures for Receivables

For the longest time, businesses of all types have been issuing invoices with staggered payment schedules. This courtesy gives clients a period of 30, 60, or even 90 days to pay for goods and services received from businesses so as not to place a strain on finances, especially for large orders. However, the business landscape has changed over the decades, and commerce takes place at a much faster rate than ever before. Apart from banking, weekends mean less and less in the business world, and our constant connection via the internet and mobile devices have us closing deals and making sales with the swipe of a finger. So why should your business still have to wait a month or longer to receive payments on aging receivables?

Unpaid Receivables Place a Strain on Businesses

While the standard business procedure of issuing invoices with staggered payment schedules works out great for customers, it can create a major strain for businesses. Waiting a month or longer for payments causes gaps in cash flow. During that time, businesses have to make payroll, cover regular overhead expenses, pay for materials and inventory to fill customer orders, maintain marketing campaigns, and more. This means that at any given time, businesses are spending more money than they are receiving, and it makes it nearly impossible to achieve successful growth.

Rethinking Receivables

Businesses need access to working capital to cover all the expenses listed above, and to take advantage of growth opportunities. For these reasons and more, businesses are taking advantage of the benefit of accounts receivable factoring. While factoring is not a new concept, it is the one form of financing that has kept pace with the business world so companies can get money quickly and efficiently. By factoring receivables, businesses can get their unpaid invoices converted to cash which is made available within 24 hours. There are no contracts or hidden fees, and businesses can choose which receivables or parts of receivables get factored. Factoring provides a fast turnaround and the flexibility that today’s business owners demand.

New Century Financial provides the most comprehensive accounts receivable factoring services and solutions. Contact our offices today and stop letting standard procedures slow down your cash flow.

The Fastest Business Financing Approvals

No one likes to wait for anything, especially in the realm of business. Customers want their goods and services delivered promptly. Businesses expect to receive payments from their clients. Yet when it comes to business financing approvals, the wait can seem like an eternity.

Traditional Financing Approvals

Traditional business financing approvals can be an ordeal from start to finish. First, there are a number of requirements from lenders, which can include a business plan, a preferred credit score, a minimum amount of collateral, and more. Then the loan application goes up the chain of command, bouncing from department to department while an in-depth credit history check is performed. Finally, if all the boxes are checked, the financing still needs an approval from the lender’s loan board, after which there is an additional processing period before funds are made available. From start to finish, the loan process can take weeks, during which time businesses can miss out on opportunities or come under financial duress because of the financing they need.

Cash Advance Approvals

Cash advances do not take as long as traditional loans. Funds can be made available over the course of one or two business weeks. While the requirements are lower for cash advances than traditional loans, the amount of financing and how quickly it’s processed depends on financial records. Cash advances are structured around your company’s sales history, so uneven cycles or long periods of low sales can raise questions. To lower the risk placed on the lender, a cash advance comes with high interest rates and fees which businesses must pay for the term of the agreement.

Invoice Factoring Approvals

Invoice factoring has the fastest business financing approvals across the board. Financing is structured around unpaid receivables which are converted to cash, and funds are made available within 24 hours. Applying for invoice factoring takes only a few minutes and there are no hidden fees or interest payments. Factoring is simple and transparent with no red tape and no strings attached.

New Century Financial provides the best invoice factoring solutions so businesses can get the fastest approvals and quick access to the capital they need for everything from smoothing over uneven revenue cycles to taking advantage of time-sensitive opportunities, building up reserves for growth, and much more. Contact our offices today to get started.

Need Fast Cash for Your Business? Not All Financing Is the Same

Our economic landscape is moving at a faster pace than ever before, which means businesses need access to capital to keep operations moving and to achieve successful growth. Yet in the realm of business financing, not all programs that offer fast cash are created equal.

Short-Term Business Loans

When businesses need working capital to smooth out finances or to take advantage of time-sensitive business opportunities, many opt for short-term business loans. After all, loans are easy to understand and have been around for centuries. However, the process for traditional loans is changing. Lenders are raising their requirements, so businesses may not receive the funding they need, even if they meet the credit and collateral qualifications. Similarly, small businesses may not have the established credit history or collateral to qualify, so short-term loan requirements end up pushing entrepreneurs to the sidelines. Because lenders have so many checks and balances in the approval process, funds may not be made available for weeks. And to top it all off, a short-term loan places debt on the books, and making those regularly scheduled payments can place a severe strain on cash flow and finances further down the line.

MCA

A merchant cash advance, or MCA, is often advertised as a way for businesses to get fast cash without debt. Digging a little deeper, while it’s true that MCAs do not place debt on the books or impact credit ratings, they still create a liability. Businesses can only access merchant cash advances if they accept credit card payments from customers at a point of sale. A small percentage of that sale is applied electronically to the balance owed. Because no collateral is required, interest rates are typically higher than with traditional loans, and there are extra fees attached for processing payments. At the end of the agreement, if the balance is not repaid in full, businesses must pay off the remainder in one lump sum. While MCAs may seem like a way to get fast cash, there are a lot of strings attached.

Invoice Factoring

Businesses across all industries use invoice factoring to get fast cash without debt, long processing times, or high requirements. There are no hidden fees, no contracts, and no liabilities. Invoice factoring is a simple process where businesses submit unpaid invoices so they can be turned into fast cash within 24 hours. This improves cash flow instead of waiting 30, 60, or 90 days to receive payment from clients. By using invoice factoring, businesses can boost cash flow and achieve rapid growth. The approval process is simple, and invoice factoring is an ideal fit in our fast-paced economy.

New Century Financial is a leader in factoring services. Contact our offices today to learn why businesses prefer our factoring services when they need fast cash.

MCA vs. Factoring: Comparing Working Capital Solutions

Business owners are always seeking reliable sources of working capital and new ways to improve cash flow. Accounts receivable factoring and merchant cash advance (MCA) programs provide working capital, but how they provide capital and how it impacts your business are completely different. We’re going to take a look at how both funding methods work from the perspective of a business owner to show the benefits and disadvantages.

Access to Capital

Access to capital is essential to every business. No one wants to wait weeks or months to get the funding they need. A merchant cash advance can take upwards of 10 business days for approval and funding. Accounts receivable factoring provides cash within 24 hours on submitted invoices.

Repayments

Most financing solutions create a balance that your business must repay within a certain timeframe. MCAs do not have fixed payments, and are instead repaid from a small percentage of sales. If there is a remaining balance, your business will owe a balloon payment to cover the principal, interest, and any remaining fees. Accounts receivable factoring does not have any payment schedules. A small amount is deducted from the total amount of the invoices submitted.

Fees and Transparency

The world of business financing is shifting and entrepreneurs are demanding more transparency. A merchant cash advance has fees tacked onto the initial funding, which means it can be very challenging to pay off the balance within the agreed upon terms. Accounts receivable factoring from New Century Financial is completely transparent. There are no hidden fees or contracts. Businesses can select which invoices or parts of invoices get factored.

Working Capital

Both MCAs and factoring services provide working capital. A merchant cash advance is an infusion of capital that creates a liability which must be repaid. Accounts receivable factoring leverages unpaid invoices and converts them to working capital immediately. There is no balance, no liabilities, and businesses can use the supercharged cash flow to position themselves for growth, as well as handle overhead expenses.

Get Started Today

At New Century Financial, we provide the most efficient, transparent, and flexible accounts receivable factoring services. If you want to improve the cash flow of your business and get access to funds quickly, contact the team at New Century Financial and learn why businesses prefer factoring services over MCAs.

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Understand Accounts Payable, Accounts Receivable, and Liabilities

In order to run a successful business, a lot has to happen on the back end. Accounting, which is usually performed by the business owner in the beginning, is the place where revenue and expenses meet, and hopefully result in a positive number. While business accounting can become very complex, do-it-yourself business owners can make things easier by understanding the differences between accounts payable, accounts receivable, and liabilities.

Accounts Payable

Accounts payable are fairly simple. They consist mostly of bills to your business that you need to pay. Typical accounts payable include invoices from suppliers, payroll expenses, lease payments on the office or facilities, company lines of credit, and other short-term debt and overhead costs. Think of accounts payable as an inbox, of sorts. Your goal as a business owner is to keep that inbox empty by paying off any amounts due to other people or businesses.

Accounts Receivable

For many business owners, accounts receivable is the enjoyable part of accounting. In short, accounts receivable is the money owed to your business from sales, consultations, and other services. Within accounts receivable, there is money that has been received from customers, and outstanding balances that have yet to be settled. Since most invoices are issued with a window of at least 30 days, revenue is often staggered. If a client’s account goes unsettled for longer than the schedule on the invoice, your business may have to perform a collection to get the money you are owed from the sale.

Liabilities

Liabilities are similar to accounts payable, with the exception that liabilities include both short and long-term debts, as well as obligations to outside parties. Bills, loan payments, expenses, services and products that have yet to be delivered, and more fall under liabilities. Future pay-outs on legal matters, warranties, insurance, and more are also considered liabilities.

By looking at your organization’s accounts payable, total liabilities and accounts receivable, you can get a clear picture of your cash flow. One of the best ways to improve your cash flow is through factoring services, which quickly convert outstanding customer invoices to cash, so your business has ample capital to cover your liabilities, and plan for growth projects.

At New Century Financial, we help businesses achieve an improved cash flow with our factoring services. If you need a boost in cash flow, or are tired of the lag in customer payments, contact the experts at New Century Financial today.