Category Archives: Uncategorized

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.


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.


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.

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.


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.


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.


Getting a Head Start on Your 2020 Business Taxes

Business taxes may seem like the best thing to look forward to in 2020, but taking time to get organized and sorted now can save business owners a lot of headaches in the new year.

Assess Your Business Liabilities

The deadline for 2019’s quarterly tax year is on January 15, 2020. Businesses must pay 100 percent of the previous year’s liabilities and 90 percent of the current year’s income taxes to avoid heavy penalties from the IRS. Business taxes in the form of IRS liabilities are different, depending on the size and type of organization you run. Businesses making fourth-quarter tax payments in January need to calculate taxes separately, especially if capital gains benefits are involved.

Estimated Business Taxes

Making four estimated business tax payments is often easier than making one large payment. Estimated business taxes are calculated by figuring out taxable income, deductions, credits, adjusted gross income, and other items. Paying estimated business taxes can help to make things easier throughout the year, especially if your business has started handling taxes for new employees.

Keep Track of Expenses

Recent tax reforms now hold that businesses can only claim 50 percent deductions for meal and entertainment expenses. Previously, businesses could claim 100 percent deductions, so be aware of this when filing in 2020. When filing business taxes, keeping track of your deductible expenses such as meals, travel, equipment, and more makes the process much easier.

Pass-Through Status

There are a number of new deductions for business owners who pass through a sole proprietorship. Qualifying business owners will be able to deduct up to 20 percent of their qualifying business income. The pass-through status does not apply to doctors, attorneys, athletes, or dentists.

Talk with Your CPA

If you enlist the services of a CPA, they will be able to keep you apprised of the latest reforms for business taxes, and how they will impact your quarterly or yearly payments. Talking with your CPA can help you streamline the tax filing process so you can focus on running and growing your business without staying up late with a headache and a calculator.

Is Your CPA Filling Your 941 Payments on the Right Schedule?

The IRS requires businesses of all sizes to make 941 payments according to a regular schedule. 941 payments are necessary for any business that has listed employees, including the owner, so that the various employment taxes can be accounted for without repercussions. Most 941 payments include income tax withholdings, social security, and Medicare/FICA. Businesses must account for these payments for anyone on the payroll who is not a contractor or unpaid intern.

Breaking Down 941 Payments

The 941 payments form can be broken down into six basic parts for employers. The first part is relatively simple, and asks for the employer’s identification information and which quarter the form is being filed for. The second section is the most essential, because employers need to list the number of employees, the amount they earn, and the taxes owed. The numbers listed in this section will help determine if your business owes taxes or if you have overpaid, which can be applied to the next quarter. The third section lists a tax deposit schedule, so employers do not have to make a one lump payment to the IRS that can place a severe strain on finances. The fourth part is rather simple, because it just asks if you’ve closed your business or stopped paying wages to your employees. Part five gives you the option of putting the IRS in contact with a CPA, if you have a professional accountant handle your 941 payments. The last part is the easiest, just because it’s the line for the signature.

941 Payment Schedules

Filing 941 payments is fairly easy, because the schedule goes by quarters. Business owners must adhere to the following schedule, or else file for extensions:

  • Quarter 1: January to March

  • Quarter 2: April to June

  • Quarter 3: July to September

  • Quarter 4: October to December

Follow Up with Your Accountant

Whether you are taking care of the accounting side for your business, or you use a CPA, 941 forms must be filed and paid every quarter to avoid fines and fees. However, some 941 payments can easily fall by the wayside, if businesses aren’t careful. Make sure to meet with your accountant every quarter to make sure your business is on track with your 941 payments.

Financial Logistics for Small Business Owners

Congratulations on launching your own business! You probably have your sights set on making lots of sales and growing your operations. But before you turn on the “open for business” sign, you need to make sure your financial logistics are in order.


This is an integral part of any business, and the one that can cause the most headaches. Most small business owners wear multiple hats, often playing the roles of salesperson, marketer, and in-house accountant. To make things easier, spend the extra money on either hiring the services of a CPA or at the very least, getting a subscription to cloud-based accounting software to handle everything from budgeting to forecasting, payroll, and taxes. It will give you time to focus on running your business and save you countless late nights balancing the books.

Sales Policies

You sell things and your clients give you money. It can’t get more complicated than that, right? The truth is that most non-retail businesses issue invoices as a standard business procedure, and those invoices have payments schedules of at least 30 days before payments is received. This creates a staggered revenue cycle, and is common in most industries.

Cash Flow

Accounting manages cash flow, which is impacted by sales and expenses. There are common expenses, such as utilities, payroll, supplies, and other overhead costs, and then there are other liabilities, such as loans and equipment leases. With invoices on a staggered payment schedule, small business owners need to strike a delicate balance with their cash flow to ensure that more money is coming in than going out at any given time. Many businesses approach bankruptcy because expenses outpace the rate at which revenue is coming into the business.

Factoring for Small Business Owners

Factoring helps small business owners stay flush with cash, even if they issue invoices with staggered payment schedules. Factoring is a process by which receivables are converted to cash so businesses get access to revenue faster than they would by waiting 30, 60, or even 90 days. By using factoring, small business owners can easily cover expenses, take care of accounting easier, and build up growth capital.

At New Century Financial, we specialize in factoring solutions for small business owners. We help reduce the wait by turning your invoices to cash within 24 hours. Contact our offices today and let us help you streamline your financial logistics today with our accounts receivable factoring services.


5 Things You Should Look for in a Business Funding Solution

Every business can use extra capital, whether it’s to get operations off the launching pad, to grow, to take advantage of a good opportunity, or something else. When seeking a business funding solution, many can look similar on the surface, and exploring the dozens of options available can seem overwhelming. However, there are a few key qualities you should look for in a business funding solution so you don’t find yourself in over your head.

1. Find lender who listens

Many lenders are interested in the bottom line, and will only make approvals based on how much money they can make while trying to force businesses into “one size fits all” funding solutions. Every business is unique, even within the same industry. Before signing up for a funding solution, make sure your lender listens to you and understands your business, your needs, and your goals. This is your business after all, and you shouldn’t settle for a cookie-cutter solution.

2. Transparency

Every business funding solution comes with fine print of some form or another, and that’s usually where the hidden fees, charges, and binding contracts reside. A good business funding solution is completely transparent about fees, penalties, and if there are term contracts for any specified length of time.

3. A business funding solution should help entrepreneurs

To build off of the first point above, some lenders only want to make money from loans, which can lead to some fairly predatory practices. The right business funding solution should help your business and encourage you to build a long-term relationship with your lender.

4. You should have some sense of agency

Business owners should not have to accept funding based on a “love it or leave it” philosophy. Entrepreneurs, especially small business owners, often feel they are at the mercy of lenders and arbitrary terms, rates, and approvals. A good business funding solution should not only be transparent, but also flexible, so business owners can decide what funding they get, for how long, and if they need to be indentured to their financing organization.

5. Debt isn’t mandatory

We now live in an age where debt-free funding solutions are quite common. Not all financing programs impact credit ratings or place debt on the books. Explore your options and you’ll find there’s much more to business funding than loans.

New Century Financial offers accounts receivable factoring services which are tailored to your needs. Our team will listen to understand your requirements, and create a strategy tailored to your needs. Our factoring services do not have hidden fees, and businesses can choose which invoices or parts of invoices get factored. No debt. No contracts. No arbitrary terms. Contact New Century Financial today and get a business funding solution designed with you in mind.