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.
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.
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.