The U.S. economy is on the path to recovery. According to a recent report by the Bureau of Labor Statistics, employment increased in 33 states last month and jobless rates fell in 29. California was among the top three states with the highest level of job growth, as over 300,000 new jobs were created over the past year.

It’s important to note that this overall job creation is correlated with growth in two sectors of the U.S. economy: business and manufacturing. The U.S. Department of Labor, Bureau of Labor Statistics (BLS) reports that in manufacturing,  productivity “increased 1.3 percent in the fourth quarter of 2013, as output increased 5.0 percent and hours worked increased 3.6 percent. Productivity increased 3.0 percent in the durable goods sector and decreased 0.1 percent in the nondurable goods sector.” Meanwhile, in the case of the nonfarm business sector productivity increased, “at a 1.8 percent annual rate during the fourth quarter…The increase in productivity reflects increases of 3.4 percent in output and 1.6 percent in hours worked.”

Productivity, according to the BLS, “reflect[s] the joint effects of many influences, including changes in technology; capital investment; level of output; utilization of capacity, energy, and materials. ” among other factors. An increase in productivity means more goods produced and sold and more employees hired; as such it’s clear that productivity is influential both with expanding entire sectors of industry and ensuring that businesses continue to expand.

One of the biggest challenges that businesses face, regardless of the industry, is possessing the capital necessary to make investments in new technology, facilities, or equipment. The solution lies with factoring.

Factoring is the process whereby an invoice or purchase order is submitted to the factor for credit approval. First the product is shipped or the service is performed. The invoice and related support is submitted to the factor.

The invoice is typically used to draw eighty to ninety percent (80-90%) as a cash advance from the factor prior to payment by the customer. The remaining ten to twenty percent (10-20%) is held in reserve with the factor. When the payment is received, the factor releases the reserve less the charges incurred back to the company.

Capital Solutions plays an invaluable role in serving the business and manufacturing sectors. From looking into processes and whether finished goods are purchased from a single supplier produced on-site or a combination of both in the case of the manufacturing industry to catering to the seasonality of the apparel industry and assisting service-oriented businesses and wholesalers, Capital Solutions recognizes that business and manufacturing are playing an important role in economic growth.