Finance your business, Improve your cash flow

Improve your cash flow and grow your business with accounts receivable factoringOne of the most difficult challenges for startups or young businesses is obtaining proper financing so that your business has the cash flow it needs to grow. Often time small or new businesses don’t qualify for a traditional SBA loan, and if they do often times the amount they qualify for isn’t enough to sustain growth.

With accounts receivable factoring, not only does your small business qualify, but there is unlimited potential for how much funding you receive. Even better, with accounts receivable factoring you are selling your outstanding receivables, so you aren’t taking on any new debt. You also no longer need to worry about performing credit checks or making collection calls, plus you can rest assured that all of your receivables are insured.

At DSA Factors we have been providing accounts receivable factoring to small businesses and young startups for over 30 years. We make credit decisions in minutes, not months, so that you can grow your business now, not later. Best of all, we are a family owned company, so whenever you call you can ask for Ben, Max, or Howard and one of us will be available to speak with you.

If you are ready to start growing your business, give DSA Factors a call today at 773-248-9000.

How To Factor An Invoice

Turn your invoices into cash with accounts receivable factoringSo you’ve heard about accounts receivable factoring. You know with factoring you can improve your cash flow without taking on any new debt. However, you’ve never factored an invoice before and you aren’t sure how to do it. Luckily for you, factoring an invoice is incredibly simple and shouldn’t take you much more time than a minute or two. Here is a step by step walk through of how to factor an invoice.

Request an Approval

Once you receive a purchase order, simply logon to DSA’s web site and request an approval. If it is a customer that you have factored with us before requesting an approval is very easy, all you need is their account number and the value of the purchase order. For a new account that we have not factored for you before, we just need some basic information about your customer. Just provide us with your customer’s name, address, phone number, and the amount of the order. If you have a fax, e-mail, and contact name we appreciate that as well. For existing accounts, you may receive an automatic approval directly on the web page, but if you don’t we will do our best to respond to your request within half an hour. There is no need to ask your customer to apply for credit or provide credit references, we will take care of everything for you.

Ship and Invoice

Once you have received an approval it is time to ship the merchandise to your customer and invoice them for it. We will provide you with a stamp to stamp the invoice with which states that the invoice is payable to DSA Factors. Alternatively, if you do everything electronically and don’t wish to stamp and scan invoices, you can type the wording of our stamp directly onto your invoices.

Send DSA a Copy of the Invoice and Shipping Documents

The same day that you ship and invoice your customers you can e-mail copies of the invoice along with the shipping documents (bill of lading or FedEx / UPS tracking number) to DSA. If we receive everything before our banking deadline we will process the invoices and fund you that same day. If it arrives after our banking deadline then you will be funded the following business day.

Let Us Manage Your Accounts Receivable

At this point there is nothing left for you to do.  We will manage your accounts receivable for you. That means that we will send out account statements to your customers, forward them copies of invoices upon request, and make collection calls should an account become past due.

Sign Up for Invoice Factoring with DSA

If factoring an invoice sounds simple enough, signing up with DSA Factors is just as simple. Just give us a call at 773-248-9000 and either Ben, Max, or Howard will be able to answer any questions you may have and get you signed up for accounts receivable factoring. You can start receiving funding in as little as 24 hours.

Grow Your Small Business With Accounts Receivable Factoring

Funding available to help grow your small business.Give your small business the financial momentum it needs to grow with accounts receivable factoring. No need to wait around 30 days or more to get paid for merchandise or services you have already provided. With accounts receivable factoring you get funded the same day you invoice your customers, giving you the cash flow you need to grow your business. To learn more about accounts receivable factoring give DSA Factors a call today at 773-248-9000.

Financing a Startup Business with Accounts Receivable Factoring

Finance your startup business with accounts receivable factoringOften times for a new startup business, it can be difficult to obtain financing. SBA loans are usually out of the question as banks will want to see a track record and will require collateral that a startup business most likely wouldn’t have. Venture capital is an option, but is usually reserved for tech companies that have a huge potential for growth, plus often times it requires you to give up ownership of your business. However, accounts receivable factoring is a great way for a startup to finance their business without having to give up any ownership or taking on new debt.

What is Accounts Receivable Factoring?

Accounts receivable factoring is a type of financing where you sell your receivables to a factoring company for a discount. For startups the main benefit is that you get funded the same day you invoice your customers rather than having to wait 30 days or longer for them to pay you for goods or services that you have already provided them. As a result you have healthy cash flow so that you can take on more orders as well as larger orders without having to worry about how you will pay your suppliers. Since you are selling your receivables to your factoring company, the funds they provide you with are yours to keep, there is no need to repay your factoring company as your customers will be paying them once their invoices become due. As a result accounts receivable factoring is one of the few financing options available that doesn’t require you to take on any new debt.

Additional Benefits of Accounts Receivable Factoring

While improved cash flow may be the main reason a startup business would use accounts receivable factoring, it isn’t the only one. Since your factoring company is relying on your customers to pay their invoices in order to get repaid, your factoring company will also handle all of the credit checking for you. For a startup business the last thing you want to do is spend several thousand dollars subscribing to a credit agency so that you can determine whether or not an order you receive is from a credit worthy company. Your factoring company will also handle all of your collection work so there is no need for you to spend time making collection calls and no need to purchase accounts receivable management software. Finally, with non-recourse factoring, your receivables are insured against non-payment for financial reasons. So if one of your customers goes bankrupt or out-of-business you still get to keep the funds that your factoring company gave you.

How Does My Startup Business Qualify for Accounts Receivable Factoring?

Unlike a traditional bank loan, accounts receivable factoring is not a loan, your factoring is instead extending a line of credit to your customers. As a result, your factoring company isn’t too concerned with your company’s credit or your personal credit, but rather with your customer’s good credit. So as long as you are selling to reputable businesses you qualify for accounts receivable factoring.

How Much Funding Can My Startup Business Receive with Accounts Receivable Factoring?

With accounts receivable factoring there is no limit to how much funding you can receive. The amount you are funded is tied directly to how much you have in receivables. So as your receivables grow so does the amount of funding you receive. While your factoring company will assign credit limits to your customers, since you are not receiving a line of credit there is no limit to how much you can get funded.

So What’s the Catch?

Obviously there are fees associated with accounts receivable factoring and these fees can vary based on which factoring company you choose to factor with. At DSA Factors we offer a flat rate factoring fee, meaning that we do not charge you interest if your customers do not pay their invoices on time. The factoring fee we charge is very similar to a payment processing fee that you would pay to take a credit card. So if you can afford to take a credit card, you can afford to offer your customers net 30 payment terms with accounts receivable factoring. While every factoring company charges a factoring fee on each invoice they purchase, these rates do vary and you may be subject to other fees as well. At DSA Factors we do not have any annual fees, there are no fees for setting up new accounts, we have no minimum volume requirements, and we have no long term commitment. Please read our article on how to find the lowest rate for accounts receivable factoring to learn more about what types of fees you can expect to pay for factoring.

What if I Need Additional Help Financing a Large Purchase Order?

Sometimes waiting until you invoice to get funded isn’t enough, especially if you need to pay your factory for a container before they will release it. In situations like this your factoring company may offer you purchase order financing. Purchase order financing is a short term loan that allows you to pay for a container in order to fulfill a large order. Even though you may not qualify for a business loan, since you have developed a relationship with your factoring company, and you will be factoring an invoice as a result of the purchase order, your factoring company may be willing to give you a short term loan to finance the purchase order.

So How Do I Get Started With Accounts Receivable Factoring?

Factoring is a fast and easy process where credit decisions are made in minutes, not months. Getting started is easy, give DSA Factors a call today at 773-248-9000. With just one call you can be well on your way to getting the financing your startup business needs to succeed. We can be funding you for your invoices in as little as 24 hours.

Accounts Receivable Financing – Cash Flow for Start Ups

Accounts Receivable Factoring - Cash Flow for Startup BusinessesFor every new start up, it doesn’t matter how great your product is, but how well your business is funded. Without healthy cash flow it can be very difficult to grow your small business. With factoring, also known as accounts receivable financing, you can speed up your cash flow so that you can take on larger orders and grow your business. To learn more about factoring and start growing your business call DSA Factors today at 773-248-9000.

Micro Factoring for Your Small Business

Micro Factoring - Funding Your Small BusinessMicro factoring is just like normal accounts receivable factoring, only it is on a smaller scale. If you are self employed, it can be very hard to find financing in order to grow your business. Even worse, as your business begins to grow, you are bound to experience a number of growing pains. While the most obvious growing expense may be rent as you outgrow your small office, basement, or garage, other expenses may include book keeping software, subscribing to expensive credit agencies, and you may even need to hire some employees to help you keep the business running. While micro factoring can’t help you cut your rent expenses, it can help you with cutting all those other expenses, while making paying the rent a little bit easier as well.

What is Accounts Receivable Factoring?

Factoring is simply selling your accounts receivable, or invoices, to a factoring company. So rather than needing to wait 30 days to get paid for a product or service you have already provided your customer with, when you factor your receivables you get funded the same day you invoice. The improved cash flow you receive can be used however you want since the funds you receive from factoring are not a loan.

Are There Additional Benefits of Accounts Receivable Factoring?

Besides the improved cash flow, factoring offers several other very important benefits. Your factoring company will handle all of your credit checking for you, eliminating the need for you to subscribe to expensive credit reporting agencies. You factoring company also handles all of your collection work, meaning that you don’t need to spend all of your free time making phone calls to customers who haven’t paid their bills yet. Plus, since your factoring company has a large client base, they most likely have several other vendors who sell to your customers meaning that they have more leverage in receiving prompt payment for your invoices. Finally, with non-recourse factoring, you also receive insurance on your receivables. That means that if one of your customers is unable to pay due to financial problems, you still get to keep the funds your factoring company gave you.

Who Can Benefit From Micro Factoring?

Micro factoring is great for new start ups and single employee businesses. With micro factoring you are able to receive the cash flow you need to grow your business without having to borrow the money or spend your own personal savings. It is also great for businesses that are growing as the improved cash flow can be used to pay your suppliers, rent, attend trade shows, or anything else.

Why Do I Need Micro Factoring?

For small businesses it can be very difficult to work with most factoring companies as they may require long term commitments and have minimum volume requirements. If your factoring company has a minimum volume requirement of half a million dollars, and you only factor a quarter of million dollars or less in any given year, then your factoring company will still charge you fees based on half a million dollars. With micro factoring you do not need to worry about meeting minimum volume requirements each year. Even if you only have $20,000 in annual sales, you only pay factoring fees on the invoices you factor. At DSA Factors we are proud to offer our factoring services to companies of all sizes and never have any minimum volume requirements. Furthermore, at DSA Factors we have no long term commitment, so you can stop factoring at any time and there is never any penalty for doing so.

What About Funding for a Large Purchase Order?

While factoring provides you with funds for merchandise that you have already shipped to your customers, sometimes it isn’t enough to help you taken on larger orders. Rather than turn down large orders from large retailers, with purchase order financing you can get a loan based on a purchase order so that you can produce the merchandise required for a large order. With purchase order financing you will receive a portion of the future invoice’s value up front so that you can produce the merchandise, and then when you actually ship the merchandise to your customer and invoice them, you will receive the balance of the invoice’s value. Even if you don’t have any large orders yet, it is important to factor your existing customers so that you have already established a relationship with your factoring company for when you do get that first large order.

Why Choose DSA Factors?

At DSA Factors we realize that we aren’t the only factoring company out there, but we offer exceptional service at very competitive rates. As on of the few family owned and operated factoring companies out there, you can always speak with one of our principals anytime you call, you will never just be handed over to an account manager. We have been factoring for over 30 years and understand the industry and what it takes to help our clients grow their businesses. We can handle any size client, we have clients who do as little as $30,000 in sales each year to clients who do millions in sales each year. Plus, we have no long term commitment so you can always stop factoring at any time if you decide that factoring isn’t right for your business. So give DSA Factors a call today at 773-248-9000 and learn just how easy it is to receive the funds you need to grow your business.

Invoice Factoring – Improve Your Cash Flow and Grow Your Business

Invoice Factoring - Improve Your Cash Flow and Grow Your BusinessInvoice factoring is the perfect way to improve your cash flow so that you can grow your business. Rather than waiting around 30 days to get paid for a product or service you have already provided, you can get funded the same day you invoice with invoice factoring. Factoring is not a loan, the funds you receive are your to keep. If you have accounts receivable, give DSA Factors a call today at 773-248-9000 and we can be funding you in as little as 24 hours.

Whether you are manufacturing, importing, or providing a service, with invoice factoring you can improve your cash flow. Allowing you to expand your customer base, and give you the confidence to soar your business to new heights. All it takes is one phone call and you can be on your way to growing your business!

What are you waiting for? Give DSA Factors a call today and start watching your business grow!

Cash Flow Problems? Try Accounts Receivable Factoring.

Improve your cash flow with accounts receivable factoringIf your small business is struggling because of cash flow problems, accounts receivable factoring may be the solution you need. Rather than having your money tied up in receivables for 30 or more days, with accounts receivable factoring you get funded the same day you invoice your customers.

If your business can benefit from improved cash flow give DSA Factors a call today at 773-248-9000 and we can be funding you in as little as 24 hours.

2016 Furniture and Bedding Sales Top $100 Billion for Second Straight Year

Furniture and bedding sales up 2.7% in 20162016 saw furniture and bedding sales climb to $104.8 billion, a 2.7% increase over 2015’s $102 billion. This is not just the second straight year that furniture and bedding have reached the $100 billion mark, but it is also the second straight year that they have been above pre-recession levels. Furniture sales had been at $100.8 billion in 2007 before dropping to $83.2 billion by 2009.

While furniture sales have been gradually increasing every year since 2009, 2016 only experienced modest growth. The 2.7% increase is the second lowest during this time period, only 2013 saw slower growth at 1.8%. All other years have experienced over 3% growth, with 2012 experiencing 4.5% growth.

This increase in furniture spending correlates well with other economic data. Last year median household incomes had risen by 5.2% and was at $56,516 in 2015. However this is still below pre-recession levels; median household income was at $57,423 in 2007. Home sales have also gone up with September 2016 experiencing nearly 30% more sales than September 2015.

As for distribution channels, nothing much had changed in 2016. In fact the only change came from online sales, which accounted for 10% of furniture and bedding sales in 2015, now accounted for 11% of sales in 2016, which is $11.5 billion. Wayfair accounted for most of this growth with an amazing 70% increase in sales that brought their totals to $1.26 billion.

When it comes to different segments, area rugs are by far the fastest growing segment. 2016 sales increased to $5 billion, a 4.2% increase over 2015’s $4.8 billion. Casual furniture also did well growing from $4.4 billion in 2015 to $4.53 billion in 2016, a 3.1% increase. Entertainment furniture did similarly well growing from $6.66 billion in 2015 to $6.86 billion in 2016, also a 3.1% increase. Bedding however isn’t growing quite as quickly as the rest of the furniture industry. Bedding, which accounts for 15% of all furniture sales grew from $15.09 billion in 2015 to $15.41 in 2016, only a 2.1% increase. All other furniture segments showed growth similar to the industry average.

According to economic projections by Furniture Today, assuming no major changes occur to the economy, furniture and bedding sales are expected to rise to $127 billion dollars by 2021, a 21% increase over the next five years. As the furniture and bedding industries continue to grow, if you are having trouble keeping up then accounts receivable factoring may be the solution you are looking for. With accounts receivable factoring you get funded for your invoices the same day the merchandise ships, giving you the cash flow you need to grow your business. DSA Factors has been providing accounts receivable factoring for the furniture and bedding industries for over 30 years. During that time we have provided hundreds of companies with the cash flow that they need to grow their business. So what are you waiting for, give us a call at 773-248-9000 and start getting funded tomorrow for your invoices.

Fixed Rate vs Adjustable Rate Accounts Receivable Factoring

fixed rate vs adjustable rate accounts receivable factoringThere are two different types of rates that most factoring companies quote potential clients these days, fixed rate and adjustable rate. These terms should sound familiar to anyone with a mortgage, and surprisingly they aren’t all that different in the world of factoring. In the world of mortgages, a fixed rate remains the same for the entire 30 year life of the mortgage, while with adjustable rate mortgages you get a teaser rate for the first 3, 5, or 7 years and then the rate goes up on you. In the factoring world, a fixed rate means that the rate you are quoted is the rate you pay for the life of the invoice, you don’t pay any interest, even if your customers pay their invoices late. With adjustable rate factoring, you are offered a low teaser rate, but you wind up paying interest for as long as it takes your customers to pay back your factoring company. Just like with mortgages, getting a fixed rate costs more than an adjustable rate, but in the long run it will save you money. At DSA Factors we have had a number of companies ask us about adjustable rate factoring over the last few years, but upon doing the math, all of them have chosen to go with fixed rate factoring, which we have been offering to our clients for over 30 years.

How does adjustable rate factoring work?

Adjustable rate factoring offers you a very low base fee for factoring invoices, often times it can be less than even 1%, but like most things in life, if it’s too good to be true it probably is. Once your factoring company funds you for the invoice the clock starts ticking and you start getting charged interest from that time until payment is received for the invoice by your factoring company. They will also add another 5-10 days worth of interest as they wait for the check to clear the bank.

What are the advantages to adjustable rate factoring?

Adjustable rate factoring can be beneficial if your customers pay like clock work and pay early. It also can be beneficial if you don’t need immediate cash flow. If you can hold onto your invoices for a few weeks before submitting them to your factoring company to get paid, you can potentially save quite a bit of money as your factoring company won’t have the invoices for very long before they get paid. Of course in both these situations you are missing out on one of the primary benefits of factoring, improved cash flow.

What are the disadvantages to adjustable rate factoring?

Besides the fact that you can face some pretty steep interest charges on your slow paying customers. Your factoring company has little motivation to collect payments for invoices in a timely fashion. If a good customer misses an invoice, which we all know happens from time to time, your factoring company may not bother to notify them until the invoice becomes 30 or even 60 days past due since they can charge you more interest during this time.

How does fixed rate factoring work?

Fixed rate factoring is very simple, you are given a rate based on the payment terms of the invoice, and that is the fee you pay regardless of how long it takes your customers to pay for your invoice. While it is true that it will cost more to factor a net 60 day invoice than a net 30 day invoice, you will not be charged any additional fees if it takes a customer 60 days to pay a net 30 day invoice. At DSA Factors we have always offered fixed rate factoring, and while it may be harder to sell the higher rate to prospective clients, we find that it is a much more honest and cheaper option. As a result we have clients who have been factoring with us for over 20 years.

What are the advantages to fixed rate factoring?

Besides the fact that you aren’t being charged interest for slow paying customers, with fixed rate factoring it makes your accounting much simpler as you always know what factoring will cost you and you can easily build the cost into your prices. Plus, since your factoring company does not benefit from late payments, they have more reason to collect in a timely fashion. As a result, they are less likely to turn down reorders due to an account being past due.

What are the disadvantages to fixed rate factoring?

If your customers pay early you still pay the same factoring fee. However, if you have customers who consistently pay early, DSA Factors would be willing to work with you to put together an early pay discount program for these customers.

How do I choose which factoring rate is right for me?

A good way of thinking about adjustable rate factoring is that it is a lot like taking a cab, you have a small flag fall but the meter keeps running until your factoring company gets paid. With fixed rate factoring, it is a lot like taking a limo, you know the price going in, and the service is usually better as well. But don’t worry, whichever route you choose, you don’t need to give your factoring company a tip!

At DSA Factors we have run reports for our clients showing them what their fee would be with adjustable rate factoring, and while it typically is very similar, flat rate factoring has always proven to be the cheaper option. If you would like to learn more about adjustable vs flat rate factoring please give DSA Factors a call at 773-248-9000 and we would be happy to talk to you about it. We would even be happy to run an analysis on your payment data to see which option would work best for you.