Author Archives: Chris Lehnes

Inflation hits 2.7% Amid Stubborn Price Pressures

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The U.S. inflation rate has climbed to 2.7%, marking a slight uptick after months of gradual declines. The increase in the Consumer Price Index (CPI) signals persistent challenges in taming it, which remains above the Federal Reserve’s target of 2%. The latest data indicates that while progress has been made, some key areas continue to exert upward pressure on prices.

Factors Driving Inflation

The recent rise to 2.7% comes after the inflation rate held at 2.6% in previous months. Contributing factors include:

  • Shelter Costs: Housing-related prices remain elevated, with shelter costs increasing by 4.9% year-over-year. Shelter accounts for a significant portion of the overall CPI, making it a critical driver of inflation.
  • Energy Prices: Although energy prices had been declining earlier in the year, the recent report shows a slower decline. Gasoline prices, for example, fell by 12.2%, compared to a sharper 15.3% drop in prior months.
  • Core Services: Prices for core services, excluding food and energy, remain sticky. Transportation and medical services costs continue to rise, keeping core inflation at 3.3%.
  • Food Prices: The rate for food showed some moderation, easing to 2.1% from 2.3%. However, certain grocery staples continue to see price increases.

Federal Reserve’s Challenge

The Federal Reserve’s goal is to achieve a 2% rate, using the Personal Consumption Expenditures (PCE) deflator as its preferred measure. The PCE typically runs lower than the CPI, but with current CPI inflation at 2.7%, the Fed faces a delicate balancing act. While the central bank has paused interest rate hikes in recent months, a sustained increase in inflation may force policymakers to reconsider their stance.

Fed Chair Jerome Powell has indicated that the path to 2% inflation could be bumpy, especially with stubborn pressures in services and housing sectors. The upcoming Fed policy meeting will be closely watched to see if this latest inflation data influences any shift in interest rate policies.

inflation Outlook for Consumers

For American consumers, this inflationary environment means that the cost of living remains elevated, particularly in essential areas like housing, transportation, and healthcare. While wage growth has helped offset some inflationary pressures, purchasing power continues to be strained for many households.

Conclusion

As U.S. inflation hits 2.7%, the challenge of fully containing inflation persists. Whether this trend continues or moderates will depend on several factors, including energy markets, supply chain stability, and the housing sector. The Federal Reserve’s response in the coming months will be crucial in determining the trajectory and economic stability.

Contact Factoring Specialist, Chris Lehnes

Thanksgiving Dinner in 2024: A Little Lighter on the Wallet

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Thanksgiving Dinner in 2024: A Little Lighter on the Wallet

Thanksgiving Dinner in 2024. Good news for Americans preparing to celebrate Thanksgiving in 2024: the cost of the traditional holiday feast is expected to be slightly cheaper this year. Analysts point to several factors contributing to the cost reduction, including improved agricultural yields, lower transportation expenses, and a decrease in inflationary pressures compared to recent years

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Thanksgiving Dinner in 2024

Why Prices Are Falling

  1. Improved Harvests: This year saw strong harvests for staple crops like corn and wheat, which contribute to lower prices for items like stuffing, pies, and baked goods. Additionally, a mild growing season for produce has ensured an abundance of sweet potatoes, green beans, and cranberries.
  2. Stable Turkey Supplies: Unlike the challenges of previous years, when avian flu and supply chain disruptions drove up the price of turkeys, this year’s market has stabilized. Turkey farmers report higher inventory levels, which has helped reduce per-pound prices.
  3. Lower Fuel Costs: Decreased fuel prices have led to lower transportation costs, which benefits consumers purchasing goods that need to travel long distances, like canned pumpkin or cranberries.

How Much Can You Save?
According to preliminary estimates, a traditional Thanksgiving meal for 10 people, including turkey, stuffing, potatoes, vegetables, and dessert, is expected to cost about 4-6% less than in 2023. While savings may vary by region and retailer, savvy shoppers can look forward to even better deals through promotions and bulk buying. Thanksgiving Dinner in 2024

Tips for Stretching Your Thanksgiving Budget

  • Shop Early: Lock in deals before the holiday rush drives up demand.
  • Compare Prices: Use grocery store apps to find the best deals on key ingredients.
  • Consider Alternatives: If turkey prices rise locally, consider ham, chicken, or plant-based mains as cost-effective options.

Thanksgiving Dinner in 2024 – promises not only to be a time for gratitude and gathering but also a chance to feast without breaking the bank.

Connect with Factoring Specialist, Chris Lehnes

Non-Dilutive Growth Financing

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Non-Dilutive Growth Financing  

Versant’s accounts receivable factoring program can be the ideal source of financing for businesses which are growing, but not ready to raise equity.   Non-Dilutive Growth Financing  

Program Overview
$100,000 to $10 Million
Non-Recourse
No Audits
No Financial Covenants
No Long-Term Commitment
Most businesses with strong customers are eligible

We like challenging deals :
Start-ups
Turnarounds
Historic Losses
Customer Concentrations
Poor Personal Credit
Character Issues  

We focus on the quality of your client’s accounts receivable, ignoring their financial condition. This enables us to move quickly and fund qualified businesses including Manufacturers, Distributors and a wide variety of Service Businesses ( includes SaaS) in as few as 3-5 days.

Contact me to discover the power of factoring!    


Chris Lehnes
203-664-1535
clehnes@chrislehnes.com
Learn more about Factoring

Spirit Airlines Begins Bankruptcy Restructuring

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Spirit Airlines Begins Bankruptcy Restructuring

Spirit Airlines has initiated a Chapter 11 bankruptcy process as part of a comprehensive restructuring strategy. This step, taken under a pre-arranged Restructuring Support Agreement (RSA), aims to reduce the airline’s $3.3 billion debt burden and bolster its financial flexibility. The plan includes converting $795 million of funded debt into equity and securing $350 million in new investments from bondholders. An additional $300 million in debtor-in-possession financing will support operations during the restructuring.

Key factors contributing to Spirit’s financial difficulties include high operating costs, stiff competition, and disruptions caused by grounded planes due to engine issues. The airline was also affected by the collapse of its planned $3.8 billion merger with JetBlue, which faced regulatory roadblocks​

Airways | Home​

markets.businessinsider.com.

Despite the bankruptcy, Spirit Airlines will continue to operate normally, with flights, loyalty programs, and employee wages unaffected. The restructuring is expected to be completed by mid-2025, positioning Spirit for improved operational stability and growth,

Connect with Factoring Specialist, Chris Lehnes

Factoring Activity – Deal Alerts – Q4 2024

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Advantages of Accounts Receivable Factoring in Q4 2024

Accounts receivable factoring has long been a strategic financing tool for businesses seeking to improve cash flow and support operational growth. As we approach Q4 2024, the relevance of factoring remains strong due to economic trends, supply chain dynamics, and evolving market demands. Here are the primary advantages of factoring in the current climate:

1. Immediate Access to Cash Flow

Accounts receivable factoring allows businesses to convert outstanding invoices into cash almost immediately, bypassing the usual 30-90 day payment terms. This liquidity is particularly valuable in Q4, as companies often face increased demand, seasonal expenses, or year-end financial obligations.

2. Flexible and Accessible Financing

Unlike traditional loans, factoring does not require a lengthy approval process or stringent credit checks. Instead, funding is based on the creditworthiness of the business’s customers. This makes factoring an attractive option for small and medium-sized enterprises (SMEs) or companies with limited credit history.

3. Support for Supply Chain Stability

With supply chain challenges persisting in many industries, businesses may need to pay suppliers upfront to secure inventory. Factoring bridges the gap, ensuring companies can meet supplier demands without disrupting operations.

4. No Additional Debt

Factoring is not a loan, so businesses do not accumulate debt or face repayment schedules. This is particularly advantageous for companies aiming to maintain a clean balance sheet and optimize their creditworthiness as they plan for the year ahead.

5. Enhanced Focus on Core Operations

By outsourcing invoice management to a factoring company, businesses save time and resources on collections. This allows them to concentrate on growth-oriented activities, such as expanding customer bases, improving products, or streamlining operations.

6. Tailored to Economic Conditions

In Q4 2024, global economic uncertainty continues to shape business environments. Factoring offers an adaptable solution for companies managing fluctuating revenues, ensuring they remain agile in responding to market changes.

7. Strengthened Customer Relationships

Factoring companies often handle collections professionally, reducing tension between businesses and their customers. This preserves positive relationships and supports long-term partnerships. Factoring Activity – Deal Alerts – Q4 2024.

Why Factoring is Crucial in Q4 2024

As businesses navigate the complexities of Q4 2024, including seasonal fluctuations, economic shifts, and competitive pressures, factoring offers a reliable, scalable solution. Whether used as a short-term financing strategy or integrated into long-term financial planning, accounts receivable factoring empowers businesses to seize opportunities and close the year on a strong financial note. Factoring Activity – Deal Alerts – Q4 2024.

Press Release: Maintenance Company with State Contract

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Versant Funds Non-Recourse Factoring Transaction to Maintenance Company with State Contract

(November 12, 2024)  Versant Funding LLC is pleased to announce it has funded a non-recourse factoring transaction to a company which provides maintenance and repair services for state-owned properties.

This business has recently won a contract with a state entity which will drastically increase revenues, but also create the need for additional working capital to cover payroll and other overhead expenses.  Versant was able to quickly put a factoring facility in place to advance cash against invoices due from the state, which will provide the company with the liquidity needed to fulfill their state contract obligations.

“Versant’s factoring program was a perfect fit for this family-owned business in need of  expansion financing,“ according to Chris Lehnes, Business Development Officer for Versant Funding, and originator of this financing opportunity. “Because our approach to factoring focuses solely on the quality of accounts receivable, we were able to provide a facility with no cap which will grow automatically as the A/R balances with the state grow.”

Maintenance & Repair Co. w/State Contracts

About Versant Funding

Versant Funding’s custom Non-Recourse Factoring Facilities have been designed to fill a void in the market by focusing exclusively on the credit quality of a company’s accounts receivable. Versant Funding offers non-recourse factoring solutions to companies with B2B or B2G sales from $100,000 to $10 Million per month. All we care about is the credit quality of the A/R. To learn more contact: Chris Lehnes, 203-664-1535, clehnes@chrislehnes.com

Inflation increases to 2.60%

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Inflation increases to 2.60%

Inflation Hits 2.6% in October, Meeting Expectations

In October, the inflation rate rose to 2.6%, aligning with analysts’ forecasts. This increase reflects a steady trend as energy costs, housing prices, and some core services continued to drive up consumer prices. The 2.6% rise marks a moderate increase from previous months, where inflation had shown signs of slowing, but remains below the peaks seen earlier in the year. Inflation increases to 2.60%.

Key Drivers Behind the Inflation Rise

The primary contributors to October’s inflation increase were:

  1. Energy Costs: Fuel and utility costs climbed again, adding pressure to household budgets and affecting goods transportation.
  2. Housing Costs: The ongoing rise in rental and housing prices continued to drive inflation, as demand for housing remains robust.
  3. Core Services: Services like healthcare, insurance, and education also saw incremental price increases, contributing to the overall inflation rate.

Implications for the Economy

While the inflation rate is still within a manageable range, it remains above central banks’ typical target of 2%. This could prompt monetary policymakers to consider further adjustments to interest rates if inflation persists. For consumers, continued inflation might influence spending behaviors, especially in discretionary spending areas, as they navigate higher living costs.

Analysts are closely watching future data to see if this trend holds or if the economy will see further moderation in inflation in response to central bank policies and global economic conditions.

Federal Reserve Board

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Fed Cuts Rates Again – One Quarter Point

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Fed Cuts Rates Again – One Quarter Point

The Federal Reserve’s recent decision to reduce interest rates by 0.25% could have nuanced effects on the U.S. economy heading into 2025, impacting areas from consumer spending to business investment. The rate cut aims to ease borrowing costs, which typically stimulates economic activity by making loans and credit more affordable. This policy shift follows a period of high interest rates intended to curb post-pandemic inflation, which has now moderated near the Fed’s 2% target​. Fed Cuts Rates Again – One Quarter Point

IFA Magazine​

J.P. Morgan | Official Website.

In 2025, the lower rates are expected to encourage consumer spending and investment in sectors like housing and business expansion. Consumers may benefit from cheaper mortgage rates, which could support the housing market by making homeownership more attainable. However, savers may see reduced yields on high-interest savings accounts, as banks adjust APYs in response to the Fed’s rate cut​. Fed Cuts Rates Again – One Quarter Point

Money.

The broader economic implications hinge on how inflation behaves. Some economists caution that, if economic growth remains robust and inflationary pressures resurge, the Fed might be forced to adjust its policy, which could counteract some of the benefits of lower borrowing costs. Nonetheless, many analysts view the Fed’s cautious approach as beneficial, potentially helping maintain steady growth without risking overheating the economy

Contact Factoring Specialist Chris Lehnes

Learn more about accounts receivable factoring

Financing IT Consulting

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Financing IT Consulting

Our factoring offering can quickly meet the working capital needs of IT Consulting Companies which do not qualify for traditional lending sources but have good quality accounts receivable outstanding.

Program Overview

  • $100k to $10 Million
  • 75% Advance against AR
  • Non-Recourse
  • No Audits or Covenants
  • No Long-Term Commitments
  • Great for bank declines

Think of me for Consultants, Staffing Companies or SaaS clients which need cash to meet their immediate goals.

Contact me to learn more:

Chris Lehnes

203-664-1535

clehnes@chrislehnes.com

U.S. economy grew at 2.8% rate in third quarter

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U.S. economy grew at 2.8% rate in third quarter

The U.S. economy grew at an annual rate of 2.8% in the third quarter, reflecting moderate growth fueled by consumer spending, business investment, and an easing of inflation pressures. This pace of growth, while slightly above economists’ expectations, suggests resilience amid global economic uncertainties and recent interest rate hikes by the Federal Reserve.

A major contributor to this growth was consumer spending, which remains robust despite inflation and higher borrowing costs. Spending on both goods and services increased, with durable goods like automobiles and household furnishings leading the way. Business investment also saw a boost, particularly in equipment and intellectual property, suggesting that companies are feeling optimistic about near-term prospects despite potential headwinds.

Another encouraging sign is the slowing of inflation, which is gradually moving closer to the Fed’s 2% target. Although inflationary pressures persist in areas like housing, energy costs have been more stable, providing some relief for consumers and businesses alike. This cooling of inflation aligns with the Fed’s recent signals that it may hold off on further rate hikes, which could support continued economic stability.

However, there are lingering concerns about the sustainability of this growth, particularly with high borrowing costs and potential global economic slowdowns. The combination of elevated rates, student loan repayments resuming, and geopolitical uncertainties could weigh on consumer confidence and business investment in the coming months.

Overall, the 2.8% growth rate shows resilience and adaptability within the U.S. economy. Whether this pace of expansion can be maintained into the fourth quarter remains to be seen, as several factors, including global market conditions and Fed policies, will continue to shape the economic outlook.

Contact factoring specialist, Chris Lehnes at 203-664-1535 or clehnes@chrislehnes.com