A business owner who doesn't solve a cash flow issue will miss out on vendor discounts, make a late payment and struggle funding payroll for your employees. Eventually, your business will run out of money for fixed expenses and growth opportunities.
A good cash flow is vital for any Durham business. Issues with cash flow arise when a company does not have enough cash to cover its basic business expenses and legal responsibilities. This situation can threaten the financial position and business operations of companies in Durham.
Everyday situations causing cash flow shortages:
Planning for cash flow problems can empower any business to have a safety net and avoid possible financial trouble. Covering expenses and paying current debt can be a struggle when the cash going out of a business exceeds the money coming in.
An alternative to solve cash flow issues is to use loans on invoices and sell your receivables to an invoice factoring company in Durham in exchange for working capital. Your business can sell the unpaid invoices to us to have fast cash in hand instead of waiting weeks or months for payments. The factoring company will advance your company a percentage of those invoices minus a factoring fee.
If you can prove you sell to creditworthy customers, cash will be available 24 hours after the application is approved. Businesses in Durham receive the remaining balance of the invoice when the customer finally pays.
Cash flow problems slow down your business's capability for growth and expansion. Without sufficient cash, business expenses can't be covered. These expenses include payments to suppliers and payroll.
1st Commercial Credit is an experienced invoice factoring company with supply chain finance solutions that can evaluate your Durham business's receivables and provide quick funding. We fund business in all industries in Durham and offer competitive financing rates of 0.69% to 1.59%.
Looking at economic trends in your industry and the world can help you see the kinds of indicators that will let you identify a recession as it is forming. The most challenging thing for new business owners is preparing and recognizing the signs that financial hard times might be on the way.
The signs of a recession are usually easy to detect, which is probably why they tend to be disregarded for a long time. Some of the signals can be seen even before major corporations begin laying off employees and small businesses have to shut down. For example, one thing to look at is when the Federal Reserve continually drops interest rates, which is usually done to stabilize the economy. When prime interest rates drop several times in a short time, it is usually a bad sign.
Keeping an eye on the banks is also a good idea to prepare for a coming recession. When an economy starts to be affected, banks will often react by reducing the amount of regular lending they provide to businesses.
Banks Become Even More Reserved When A Recession Hits
Banks will also be reluctant to provide funding to small and medium-sized businesses. For many companies, bank funding is their emergency plan to solve cash flow issues when the economy is not good. But when that struggling economy causes the banks to close their doors, those businesses are left scrambling for other solutions.
Businesses relying on banks to supply their funding in a recession will have a challenging time. Banks will usually demand collateral for financing in tough economic times. Physical collateral is not always something that small and medium-sized businesses have. The financial struggle worsens when a small business cannot secure the bank loan it needs during a recession. That business is ultimately forced to make decisions that could eventually lead to its closure.
A Bank Line Of Credit Is The Least Reliable Financial Tool In A Recession
A bank will be reluctant to extend or provide a line of credit for small and medium-sized businesses.
Banks also will raise interest rates on lines of credit during a recession, and they also become very strict about the requirements. If you make a late payment, you will have harsh late fees and expect your interest rate to increase. Missing a payment can result in having your line of credit canceled. The ideal solution in this situation is a business line of credit that does depend on a bank.
1st Commercial Credit Is The Ideal Recession Funding Solution
1st Commercial Credit is a receivable factoring company providing a flexible business line of credit based on the strength of your invoiced sales. During a recession, your company will still be taking in purchase orders and generating invoices for clients. You could solve your cash flow without having to turn to a bank for a line of credit by selling your receivables to a factoring company.
Factoring Helps You Obtain Consistent Cash Flow
Insufficient cash flow can seriously harm your business. Reliable cash flow is necessary for running your agency daily. As with any business, manufacturers have their highs and lows. Yet even when a business slows down, financial obligations still need to be covered, such as paying employees and keeping your company running.
Fast and Accessible Form of Financing
Applying for a business loan is a challenging and time-consuming process. It can take several weeks or even months to get approved and get the funds you need. On the other hand, invoice factoring is quick and straightforward. Once you're approved and submit your unpaid invoices, you will get funds deposited immediately. Banks will also limit the amount you can borrow based on specific criteria like time in business and credit score. With invoice factoring, you can receive unlimited funds based on your company receivables.
Better Terms Than with Traditional Financing
Many businesses that can't obtain a bank loan can qualify for our factoring services. Additionally, you'll find the terms and conditions to be more beneficial to your long-term financial health. For one thing, invoice factoring won't add debt to your business. It is not like taking out a loan but simply putting your unpaid invoices to work so you don't need to pledge collateral such as company real estate or equipment. Many businesses find factoring to be a more favorable and less stressful type of financing.
Factoring Companies Also Provide Extra Office Support
Factoring companies will also help you save time and run your office time more efficiently. We offer assistance with accounts receivable reporting, collections, and customer relationship management. When you work with a good factoring company, you receive valuable extra help running your back-office tasks so you can invest more time in essential tasks such as recruitment, training, and talent allocation. This is another way that lending for manufacturing companies can help your business thrive and grow.
The Research Triangle in North Carolina has always been a leading hub of creativity and genius in tech. As the home of colleges like North Carolina State University and Duke University, the Durham area has a community of up-and-coming tech-related professionals. That talent pool has given rise to an exponential growth of tech jobs and startups in the area.
Part of why Durham is an ideal location for founders includes a diverse talent, low cost of living, and the city's commitment to fostering economic, infrastructural development. Durham is home to more than 300 startups in the downtown area.
The 14 most prominent tech companies in Durham include FHI 360, Cree, Toshiba Global Commerce Solutions, Marken, Measurement Incorporated, Parata System, Cenduit, Emergys.
Durham is famous for being the home of Duke University and The University of North Carolina's flagship Chapel Hill campus. The city is also part of the Research Triangle Park, one of the nation's most prominent high-tech research and development centers. Duke's men's basketball team is a big attraction and draws many followers to the area. Another main attraction is the many different festivals in the city, including the Full Frame Documentary Film Festival and the American Dance Festival. The Nasher Museum of Art produces nationally recognized traveling exhibitions of global and contemporary art.