NS Corporation Announces Increased Deposit Rates

NS Corporation Announces Increased Deposit Rates

Sep 11th 2023

As of September 15th, 2023, NS Corporation will be increasing deposit rates on upcoming jobs to a minimum of 50%. In this high interest rate environment, it is imperative that NS maintain a better cash equilibrium to fund its increasing working capital requirements.

“More of our vendors are requiring higher deposits, with longer lead times, which unfortunately lengthens NS’s cash conversion cycle. In addition, NS is funding too much of its’ customer’s inventory risk, for longer periods, due to site readiness and other supply chain problems.Our only option is to follow our supply chain’s lead, and obtain more money up front, to ease the burden on our cash flows.Our inventory turns are down, given that lead times are still not where they were pre-pandemic, in addition many of our customers are encountering increased lead times on power connections and permitting.And with the cost of money higher, our AR has been extended as well, hampering our ability to convert cash flow. With these issues on our front burner, our only option is to get more money down to ease supply chain pressure on our business at the front end and back end.” said President Christopher G. Altschul.

Added Altschul, “We’ve just lived through a long secular downtrend in interest rates, starting in the 1980’s.That trend has now reversed, and the cost of money is much higher than it has been over the last decade. Every delivery time extended is now more costly, as is higher deposits on buyouts and longer lead times.It is imperative that small and medium sized businesses recognize this, and make the necessary adjustments to their terms of doing business.”

For additional information or questions you may have, please contact us today.