Factoring Your Receivables at a High Advance Rate

High Advance RateWhen you are looking for a factor, one of the most important things to consider is how much you get advanced.  Many factoring companies will advertise 70% or even 80% advance on your receivables.  At DSA Factors we offer you 90%-100% advance on your receivables.

Of course, if you are new factoring, you might ask why not advance at 100%?  It’s simple, all factoring companies take reserve, this protects them against credits your accounts may take for damaged merchandise or any other problems they may have.  It is very common for factoring companies to take 20% or more in reserves.  In fact, there are some factoring companies that won’t even pay you until they get paid from your accounts.

At DSA Factors we know that it is important for you to get all of your money as soon as possible.  For that reason we only take 10% in reserves when you first start factoring with us.  So lets say your first batch of invoices is worth $5000, we advance you $4500 and hold onto $500.  We then receive payments of $3000 and you submit your next batch of invoices for $5000.  At this point your overall balance is $7000, so we will need to keep $700 in reserve.  That means that we will advance you $4800 and only hold back $200, that’s a 96% advance on your invoices!  If you continue with a similar pattern, soon we will be advancing you 100% on your invoices.  See the table below for a clearer picture of how this works:

DateInvoices SubmittedPayments ReceivedOverall BalanceAdvanceHold BackReserveAdvance Rate
June 1$5,000.00$0.00$5,000.00$4,500.00$500.00$500.0090%
June 15$5,000.00$3,000.00$7,000.00$4,800.00$200.00$700.0096%
June 25$3,000.00$4,000.00$6,000.00$3,000.00$0.00$700.00100%
July 5$6,000.00$5,000.00$7,000.00$6,000.00$0.00$700.00100%

 

As you can see, it doesn’t take very long to build up your reserves to a level where you can get advanced 100% on your receivables.  Furthermore, those reserves belong to you, so should business ever slow down you could request we send your reserves back to you, and then build them back up once business starts to pick up again.
It is important when selecting a factoring company you pay close attention to how much money they will advance you.  After all, one of the benefits of factoring is improving your cash flow, and if your factoring company is holding back more than they should be, then they aren’t doing their jobs.
If your factoring company is advancing you at anything less than 90-100%, give DSA Factors a call today at 773-248-9000.  Its time start getting PAID for your receivables!