NYC Businesses Unlock Cash Flow Potential with Factoring
In the current economic climate, NYC businesses are positioning themselves for growth. While traditional loans can be risky, even in a strong economy, businesses in New York City have found a debt-free alternative which boosts cash flow and enables companies to rapidly accumulate growth capital.
Traditional Loans Are Risky
A strong economy does not reduce the risk posed to businesses when using traditional loans. First, debt diminishes growth potential. Traditional lending channels offer financing which places debt on the books. Since growth does not always guarantee an immediate increase in revenue, the debt from loans can place a severe strain on cash flow, forcing businesses to scale back their plans. Second, traditional loans take time to process, which can cause businesses to miss windows of opportunity. Third, and something we have seen multiple times this year alone, traditional loans are subject to arbitrary hikes in interest rates, which make it harder for NYC businesses to pay off the balance within the agreed upon terms.
Invoice Factoring is a Powerful Alternative to Loans
NYC businesses are using accounts receivable financing, or invoice factoring, as an alternative to traditional loans for growth. Since many businesses in New York City issue invoices with staggered payment schedules of a month or more, a good portion of their revenue is tied up in unpaid receivables. By using invoice factoring, businesses can convert receivables to working capital within a single business day, thereby eliminating the wait on staggered schedules. Invoice factoring also greatly improves cash flow, thereby allowing NYC businesses to rack up working capital and take advantage of growth opportunities without relying on traditional loans and the debt they entail. Because invoice factoring is considered an immediate transaction where receivables are “sold” for cash, debt doesn’t even enter the picture.
NYC Businesses that Use Invoice Factoring
The basic rule is that is a business in New York City issues invoices with payment schedules of a month or more, they can take advantage of invoice factoring services. Freight carriers, law firms, medical practices, manufacturers, and more use invoice factoring to get a competitive edge and gain momentum, especially in this robust economy. At Growth Lending Group, we specialize in working capital solutions for NYC businesses. Our team will work with your directly to create a factoring strategy to help you reach your goals and ensure long-term success. Contact our offices today to get started.