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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.


Building Healthy Working Capital Reserves for Your Business

Working capital is at the heart of every business. Whether it’s used to maintain operations and make payroll, or for growth projects, healthy working capital reserves are essential for long-term success. But for many small businesses, building healthy working capital reserves can be a major challenge.

Expect the Unexpected

It is not enough for businesses to simply tread water. Working capital reserves ensure businesses can pay overhead expenses, but there’s much more to success than keeping the status quo. Working capital reserves ensure that when potentially lucrative opportunities arise, you don’t miss out on them because there is not enough capital on hand. Similarly, when there are unexpected expenses, such as to cover materials and personnel for large or unexpected orders, your business needs capital reserves to draw from to fill those customer requests. Working capital reserves reduce the stress and financial impact of those unexpected events.

Loans Can’t Make Up the Difference

Many business owners have the mindset that if there isn’t enough capital in the coffers that they can just make up the difference by taking out a loan. Lenders like to take deep dives into financials before approving loan requests, and that means looking at how much revenue is left over after regular expenses. Additionally, if a business is approved for a loan, debt is placed on the balance sheet, which means even more revenue is going toward not only regular overhead expenses, but paying off the balance of the funding as well. This ends up making it nearly impossible to build working capital reserves.

A Solution for Building Working Capital Reserves

Building working capital reserves starts with a healthy cash flow. Businesses that issue invoices with payment schedules ranging from 30 to 90 days often have expenses during those lag periods which can place a strain on cash flow. By using accounts receivable factoring, unpaid invoices can be turned into cash within 24 hours, resulting in a supercharged cash flow. This allows businesses to get faster access to revenue and build up healthy working capital reserves so they can take on the unexpected and achieve rapid growth.

New Century Financial is a national leader in accounts receivable factoring services, giving business owners more control over their accounts receivable than ever before. Contact our offices today to start building up your capital reserves.


3 Things to Avoid When Requesting Business Financing

From traditional loans to alternative funding, there are more types of business financing programs available today than there were but a decade ago. But no matter which type of business financing you are considering, there are some “fine print” items and terms you should look out for, because they can end up placing a strain on your business finances in the long run.

Variable Interest Loans

Loans are a big responsibility for businesses of all sizes. Taking on debt in exchange for capital has a good amount of risk to it. Usually, the terms of business loans are amenable, and are ultimately designed to help businesses stay afloat, at the very least. Variable interest rates, however, can pose a major challenge to businesses. Traditional lenders frequently offer loans with variable interest rates, which usually go up as time goes on. This means loan payments on business financing are not static, so budgeting for monthly installments is extremely difficult. Since many businesses have multiple loans, that means the total amount being paid on each can vary, turning accounting and cash flow into huge headaches.

Balloon Payments

Balloon payments are associated with types of business financing that offer flexible payment methods, such as a merchant cash advance. Flexibility is good for small businesses owners, who might not have high sales or revenue to take on loans with regularly scheduled payments. However, if the balance owed is not paid off before the specified terms are up, businesses could be facing one large payment at the end of it all. This balloon payment is the remainder of the balance, typically with fees and interest, and can often force businesses to take out an additional loan just to cover the amount owed, which places more debt on the books and lock businesses into a debt cycle.

Prepayment Fees

While prepayment fees are not too prevalent among private and alternative lenders, they are frequently attached to more traditional forms of business financing. If your business takes out a loan, and you find yourself in a position to pay off the balance early, that would seem like a wise financial decision. After all, why drag out debt when you can repay the loan ahead of schedule and start rebuilding your business credit ratings? Unfortunately, most lenders generate revenue from the interest rates when they are spread out over months and years, so paying off the balance early threatens to reduce their bottom line. To get as much money from borrowers as possible, lenders use prepayment fees, which are penalties that are triggered when a business attempts to overpay or completely zero out the balance of a loan ahead of the terms.

At New Century Financial, we specialize in accounts receivable factoring solutions for businesses. Our factoring services are designed to get you money from your unpaid invoices faster, with no balloon payments, no hidden fees, and no term contracts. Contact our offices today to learn more.


Rethinking the Traditional Growth Financing Model

When businesses position themselves for growth, the thought of taking out one or more loan is not far behind. For the longest time, debt-based loans have been the answer for everything from overcoming cash flow issues to expanding into new markets. However, business owners spanning all industries are rethinking the traditional growth financing model.

The Limitations of Debt-Based Financing

Growth-focused businesses want to reach their fullest potential. Loans may seem like the conventional method to attain growth capital, but they can also be very limiting. Taking on debt to achieve growth usually means businesses have to walk back a few goals in order to pay off the balance of their loans without creating a severe financial strain. Debt and impacted credit ratings add to the risk of business growth when the end result does not guarantee a proportional increase in sales to offset financial liabilities. In the end, the accumulated debt can keep businesses from hiring the workforce they need to carry out growth projects, or the inability to meet expanded overhead costs.

Achieving Growth Without Debt

Accounts receivable factoring helps businesses position themselves for growth without having to jump through hoops or take on debt via traditional loans. At its very heart, factoring is the simple process of exchanging unpaid customer invoices for cash. The simple transaction does not place any debt on the books, and it is a fast and efficient way for businesses to improve cash flow and quickly accumulate the capital necessary to act on growth opportunities. Accounts receivable factoring has come a long way, and has become a mainstay of business financing for everything from correcting minor cash flow issues to funding large projects without negatively impacting credit ratings or taking on debt. Businesses can now choose which invoices to submit for factoring, and even which parts of invoices, without any contracts, limits, or hidden fees. Accounts receivable factoring is used in every industry from niche startups to major corporations.

New Century Financial is recognized as a leader for providing comprehensive accounts receivable factoring services and tailoring solutions to meet the needs of business owners. Contact our offices today to learn how our factoring services can help your business achieve growth and long-term success.