Category Archives: Factoring Benefits

accounting

Streamlining Your Accounting Process: A Guide for Small Business Owners

New and small business owners often wear many hats at once, including sales, marketing, HR, and more. The one role that consumes a good portion of time, and can lead to a lot of late nights is accounting. For business owners who might not have a background in accounting, the process can be challenging, and a small mistake can have big consequences. Fortunately, there are a few tools that small business owners can use to streamline the accounting process.

Hire a CPA

A lot of small business owners spend late nights and experience many headaches trying to get through the accounting process. However, a CPA is trained in accounting, and they are aware of both federal and state tax guidelines to help your business stay on track and save money. Most small business owners meet with their CPAs weekly, once a month, or once per quarter. Hiring a CPA may seem like an extra business expense, but with a professional going through the accounting process, your business can save lots of money in the long run, and avoid accounting errors that could end up costing a lot.

Cloud-Based Accounting

Cloud-based services have helped revolutionize the way we do business. Having a safe and secure place to store information is great in case of local computer failures. Cloud-based accounting offers a wide range of options to small business owners, and can be linked to payroll, taxes, and other functions. Cloud-based accounting helps to create budgets, projections, and more to give business owners more insight into how to steer their operations. Cloud-based accounting can also be scaled to your business, and subscriptions for services are much more affordable than they were just a few years ago.

The Accounting Process and Receivables

One of the big hold-ups in the accounting process is the lag in payment on receivables. Business plans and budgets often get put on hold due to outstanding client invoices. Factoring offers fast turnaround on unpaid invoices to improve cash flow, so business owners can streamline the accounting process and achieve a better ratio between sales and revenue. Factoring is quick, simple, and transparent, with no contracts or hidden fees. Small business owners use factoring services in conjunction with a CPA or cloud-based accounting to get a better handle on finances and long-term plans.

If you want to learn more about factoring services, contact the team at New Century Financial today.

distributors

How Distributors Can Keep Supply Chains Moving and Grow Their Client Base

Distributors in every sector play a crucial role to businesses across all industries. From inventory to supplies, raw materials, medical equipment, and more, distributors are part of the foundation of our economy. However, to fill the regular influx of orders, keep supply chains moving, and to tap new markets, distributors need to maintain a healthy cash flow.

Cash Flow for Distributors

In a fast-paced economy where distributors are constantly receiving orders from clients, they rely on revenue to purchase the items needed to fill those requests. Standard business practices have invoices issued to clients with staggered payment schedules of 30, 60, and even 90 days. This means that at any given point – or especially during a peak business cycle – a distributor can experience a period where they are spending more to fulfill orders compared to the payments they are receiving from clients. Many times, distributors will turn to short-term loans to smooth out uneven revenue cycles and stay on top of client orders. Unfortunately, the debt from short-term loans can add up, especially if the disparity between expenses and revenue is a recurring issue.

Achieving Parity for Long-Term Success

One way to achieve a closer ratio to invoices generated and revenue received is through accounts receivable factoring. Accounts receivable factoring is a method by which distributors can leverage unpaid invoices for immediate access to funds, often within 24 hours. A distributor can submit an invoice for factoring as soon as a sale is generated. This improves cash flow and removes gaps in revenue caused by staggered payment schedules. Factoring services are debt-free, so businesses can stop using short-term loans to smooth out uneven revenue cycles. Additionally, accounts receivable factoring helps distributors to build up reserves for marketing and to expand into new regions or markets.

Get Started Today

New Century Financial is a national leader in accounts receivable factoring services. We offer flexible factoring with no long-term contracts or hidden fees, and we let businesses choose which invoices or parts of invoices get factored. If you own a distribution business and want to improve cash flow for long-term success, contact the team at New Century Financial today.

small businesses

3 Financing Challenges Facing Small Businesses

Running a successful small business is hard work. Finding the right financing to thrive and grow in today’s economy can be challenging. However, the current economic landscape poses a few extra challenges for new and existing small businesses, but there are solutions for entrepreneurs to get access to working capital.

1. Tightening Credit Requirements

One of the biggest hurdles facing small businesses is qualifying for financing. Traditional lending channels have been raising their requirements on loans. In addition to arbitrary loan board decisions, lenders are basing approvals for financing on revenue, the amount already borrowed, and credit ratings. Now, lenders are focusing on tightening credit requirements for small businesses, due to pending trade agreements on international commerce and possible interest rate hikes from the Fed. This poses a problem, because many businesses already have debt on their credit reports due to previous loans. Additionally, new businesses may not have the credit ratings to qualify for loans, even if they do not have any red marks on their credit reports.

2. The Election Cycle

Believe it or not, the four-year election cycle influences business financing. Small businesses are hesitant to take on debt from loans during an election year, because they are unsure how the next four years will impact the economy, taxes, interest rates, and more. For similar reasons, lenders are hesitant to approve loans for entrepreneurs because they are unsure of the risk level for investing in small businesses. In short, the election cycle makes both lenders and small businesses hesitant.

3. Growth Opportunities

Business growth ties into the above two points. This year presents a number of growth opportunities for businesses. If a business can get a stronger foothold this year, then it can weather whatever the next four years bring. At the same time, business growth hinges on getting the right financing, which is becoming more prohibitive with the way traditional lenders are raising their requirements. Fortunately, there is a solution that allows small businesses to sidestep all three challenges.

A Financing Solution for Small Businesses

Entrepreneurs can build up finances from within by using invoice factoring. Invoice factoring is a debt-free working capital solution that converts unpaid invoices to cash. This allows entrepreneurs to boost cash flow and build up capital reserves for growth, take care of overhead, pay down existing debt, or anything else their businesses need. To learn more about using factoring as an alternative to traditional loans, contact New Century Financial today.

workforce

Expanding Your Workforce as Your Business Grows

Your business is getting more orders than ever before. Your salespeople are taking on new accounts. You want to fill client requests and bring in more revenue, but your workforce is stretched to its limit. How can you find the capital to hire more employees while your business is going through growing pains?

The Revenue and Payroll Conundrum

Hiring new employees is essential to growing a business. Expanding your workforce is a necessary cost that adds to quarterly taxes. Additionally, payroll needs to be met, and that’s a recurring expense every week or every other week. The plan seems fairly straightforward on paper, but even the best hiring strategy can come into direct conflict with cash flow. Sales may be through the roof, but if your business issues invoices on staggered payment schedules of 30 days or longer, you may not have the capital reserves to expand your workforce at the rate you need to achieve growth. Fortunately, there is a way to get the capital you need to hire more employees without taking out short-term loans to cover strains on cash flow until revenue starts coming in.

Boost Cash Flow and Expand Your Workforce

Waiting on revenue – especially during a period of growth – can be stressful. The lag in revenue can force growth plans to take a backseat, and prevent businesses from hiring the employees they need. Businesses that want to expand their workforce without waiting on staggered client payments use factoring services. Factoring speeds up the rate of revenue for your business by converting unpaid invoices to cash, typically within a single day. This helps to remove strains on cash flow and allows your business to build up the capital reserves necessary to cover the cost of expanding your workforce. Factoring is used by businesses in almost every sector that want to jump on growth opportunities and reduce the need for short term loans to handle the transition.

New Century Financial offers factoring services to businesses looking to position themselves for growth, as well as those looking to boost cash flow and build capital reserves. If your business is experiencing growing pains, and you need access to capital to hire more employees, contact the professionals at New Century Financial today.

The Market Outlook for Business Financing in 2020

Business financing has seen a number of trends over the past year, including a decrease in interest rate hikes on business loans and an uncertain situation with imported goods and materials used by almost every industry. However, there were a number of positives as well, which makes forecasting the outlook on business financing a mixed bag, depending on where you stand.

First, the Good News

Business financing has been bolstered by two major points. First, consumer confidence is still high, as shown by increased overall purchases in 2019, exceeding 2018’s fourth-quarter results. Additionally, almost every industry experienced growth, with increased production from manufacturers, more clients entering contracts with businesses for physical goods and services, and higher job availability. More businesses are trying to position themselves for growth and more entrepreneurs plan on launching businesses this year.

Uncertainty for the Business Financing Outlook

The current status with tariffs has caused some uncertainty in the retail and freight sectors. While 2018 saw freight demand reach new heights, last year things snapped back to normal, creating the perception of a drop, which caused lenders to tighten credit requirements for certain businesses. 2019 saw fewer hikes in interest rates on business loans, but the unpredictability has business owners wary about taking on new debt. Also, as we start 2020, it is an election year, which causes general speculation and uncertainty for all businesses.

The Safest Plan Moving Forward

Regardless of the positive points and the uncertainty, businesses still need access to capital to thrive and grow. While lenders are tightening credit requirements, taking on debt with business loans may not be the answer. While the market waits for speculation to give way to a clearer picture, businesses can build up capital reserves so they can expand or roll our new projects. One way to do that is through factoring. Factoring allows businesses to speed up cash flow and avoid experiencing gaps in revenue from unpaid client invoices. Factoring is fast and can be tailored to the cash flow needs of businesses so they can be in a strong financial position no matter what happens.

At New Century Financial, we offer comprehensive factoring services without any red tape, hidden fees, or long-term contracts. Factoring helps businesses reduce the need for debt-based loans by providing fast turnaround on invoices. Get an edge on business financing this year with factoring services from New Century Financial. Contact our offices today to get started.

Building Capital Quickly and Effectively without Debt

A lot of small business owners feel like they are in a holding pattern. Building capital can seem like a challenge between expenses, payroll, and the built-in lag between client payments due to staggered invoice schedules. Fortunately, there is a fast and effective way to build capital without resorting to short-term loans or other debt-based financing programs.

Ongoing Financial Obligations

Every business has financial obligations, such as making payroll, paying utilities, installments on existing loans, and similar recurring expenses. Some expenses fluctuate, especially for businesses that rely on inventory and production, or simply client demands. Revenue from sales should exceed ongoing financial obligations, but if revenue is staggered due to the payment schedules on invoices, the amount of outgoing capital could exceed revenue during crucial cycles. Sometimes businesses feel the need to take out loans to temporarily get ahead of those financial obligations. In reality, those payment schedules can cause recurring gaps in revenue, which leads to more loans. Taking out loans places more debt on the books, which increases the amount of capital going out from your business to pay down financial obligations. This cycle can keep businesses from truly getting ahead and building up capital.

Building Capital Effectively

Wouldn’t it be nice to eliminate the gaps caused by invoice schedules and pivot away from debt-based programs to get ahead? Factoring allows business to build capital effectively without debt. Factoring converts unpaid invoices into cash within 24 hours, which eliminates gaps in revenue cycles. The fast turnaround from factoring accelerated cash flow so businesses can meet ongoing financial obligations. Even better, the faster and healthier cash flow means building capital reserves is much easier, because the rate of revenue can finally exceed capital going to cover expenses. Build capital gives your business the ability to grow and take on larger client accounts, which translates to even more revenue at a faster rate. Factoring gives businesses the ability to break out of the holding pattern.

New Century Financial is a national leader in factoring services. Our factoring solutions have no hidden fees, a 24-hour turnaround time, no contracts, and the flexibility for you to customize how and when you factor invoices. Contact New Century Financial today and start building capital for long-term success.

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.

credit

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.